Tokens and cryptocurrencies are the two most popular blockchain-based digital assets. The most significant difference between the two is that cryptocurrencies have their own blockchains, while crypto tokens are created on top of an existing blockchain.
It is important to understand the distinctions between digital assets, cryptocurrencies, and tokens. While these terms are often used interchangeably, they differ in a number of other ways. In general, a digital asset is a non-tangible asset that is created, exchanged, and stored digitally. Digital assets in the context of blockchain include cryptocurrencies and crypto tokens.
Tokens and cryptocurrency are separate subclasses of digital assets that use cryptography, an advanced encryption technology that ensures the legitimacy of crypto assets by preventing the possibility of counterfeiting or double-spending.
The major distinction between the two types of digital assets is that cryptocurrencies, such as BTC or ETH, are native assets of a blockchain, while tokens are created as part of a platform built on an existing blockchain, such as the various ERC-20 tokens that form the Ethereum ecosystem.
