UHY Ross Brooke Chartered Accountants

In the crypto world, what’s the difference between a coin and token?

AI, crypto and technology specialist accountants

Increasing numbers of people will be aware of cryptoassets, but do you know the difference between a coin and a token?

A cryptocurrency can be either a coin or a token.

A crypto coin is a standalone currency that operates independently of other platforms, with its own blockchain and infrastructure. Examples of crypto coins are Bitcoin, Litecoin, and Bitcoin Cash.

A crypto token, on the other hand, is a digital asset that is built on top of an existing blockchain infrastructure, such as Ethereum. Tokens can represent various assets such as a currency, an asset, a utility, or a security, and they are typically created through an Initial Coin Offering (ICO). An example of a crypto token is an ERC-20 token on the Ethereum blockchain.

In short, a crypto coin is its own blockchain, while a token is built on an existing blockchain.

If you’re a cryptoinvestor and need help sorting out your tax liabilities on your cryptotrading, please get in touch. We have a specialist team of crypto accountants who are passionate about helping investors keep on top of their taxes and not letting them spiral out of control.

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