If you have spent any time reading about cryptocurrency, you have probably seen the words “coin” and “token” used interchangeably. They are not the same thing. The difference is worth understanding because it affects how these assets work and what they are used for.
A coin is a cryptocurrency that has its own blockchain. It is the native currency of that network, used to pay for transactions and reward the people who keep the network running.
The most well-known examples are:
When you send a transaction on the Ethereum network, you pay a fee in ETH. When validators secure the Bitcoin network, they are rewarded in BTC. The coin is fundamental to how the network operates.
A token is a cryptocurrency that is built on top of an existing blockchain rather than having its own. Tokens use another blockchain’s infrastructure and follow a standard set of rules to work within that ecosystem.
The vast majority of tokens are built on Ethereum, using a standard called ERC-20. Examples include:
Tokens can represent many different things: a share in a project, voting rights in a protocol, access to a service, or simply a unit of value.
For a beginner just buying and holding crypto, the distinction does not make a huge difference day to day. You can buy both coins and tokens on major exchanges in exactly the same way.
The key practical point is fees. If you want to send an ERC-20 token on the Ethereum network, you still pay the fee in ETH, not in the token itself. So if you hold a token built on Ethereum, you also need some ETH in your wallet to cover transaction fees. This catches many beginners off guard.
NFTs (Non-Fungible Tokens) are also tokens, but with one key difference: they are unique. A standard token like USDC is fungible, meaning every unit is identical and interchangeable. An NFT is one of a kind. It represents ownership of a specific digital item rather than a quantity of something.
Altcoin is a broader term that simply means any cryptocurrency that is not Bitcoin. It includes both coins and tokens. So Ethereum is both a coin and an altcoin. USDC is both a token and an altcoin.
If you want a quick rule of thumb:
Both can be bought and sold on exchanges, can go up or down in value and carry risk. The technical distinction matters more as you get deeper into the space, but for now, the above is all you need to know.