If you’re new to cryptocurrency, the difference between coins and tokens can be confusing. This article explains how they differ and how to interact with both.
Coins are digital assets that run on their own blockchain. They serve as a medium of exchange, store of value, and unit of account within their network.
Examples include Bitcoin (BTC) on the Bitcoin blockchain and Ether (ETH) on Ethereum.
Tokens are digital assets created on top of an existing blockchain. Unlike coins, tokens do not have their own blockchain; they rely on an underlying network for security and transactions.
The first cryptocurrency tokens were issued on the Bitcoin blockchain using the Omni protocol. Token adoption grew significantly with Ethereum’s ERC-20 standard, which became the most widely used format. More recently, Solana’s SPL and Token-2022 standards have gained popularity due to their low costs and ease of token creation.
Tokens require a blockchain’s native coin to process transactions. For example, when sending USDC (a token on Ethereum), the transaction fee is paid in ETH, not USDC.
When transacting with tokens on a certain network, tokens will be sent to and from the same addresses that hold the base cryptocurrency.
For example, USDC is a token which is designed to hold a value of $1. When you want to get paid in USDC on the Ethereum network, you would simply provide your Ethereum address and ask the tokens to be sent there.
USDC is an ERC-20 token, which is the most common token type on the Ethereum network. For more information about ERC-20 tokens, please read our article called Managing Ethereum & ERC-20 Tokens in Trezor Suite.
Tokens can have many different uses depending on the project. Here, we’ll discuss the most common token types.
Utility tokens are used within a blockchain ecosystem to access specific features or pay for services. Some utility tokens can also be staked, meaning they are locked up to help secure the network in exchange for potential rewards.
Some examples of Utility tokens are LINK, FIL & BAT.
Governance tokens allow holders to vote on decisions in blockchain protocols. This type of setup is often called a Decentralized Autonomous Organization (DAO) and has been explored across most modern blockchains that support smart contracts.
Some examples of governance tokens are UNI, SUSHI and MKR.
A stablecoin is a token designed to maintain a stable value, typically by being pegged to a real-world asset like the US dollar or gold. Unlike other cryptocurrencies, which can be highly volatile, stablecoins aim to provide price stability. They exist on blockchains such as Ethereum, BNB Smart Chain, and Solana and are commonly used for payments, trading, and value storage.
Popular stablecoins include USDT and USDC.
Memecoins are often the first crypto asset someone will buy. While the first memecoin, Dogecoin, started as its own blockchain in 2013, modern memecoins launch on existing networks for a quicker and easier setup, often featuring an animal mascot as part of their branding. However, memecoins can have any name, and are not exclusively tied to being animal related.
Today, memecoins are typically created on low-cost blockchains like Solana or BNB Smart Chain, though they originally gained popularity on the Ethereum network. Examples of popular modern memecoins include SHIB, BONK, and PENGU.
An NFT (Non-Fungible Token) is a unique token type that represents ownership of a specific item, such as art, music, or virtual collectibles, stored on a blockchain. Unlike cryptocurrencies, NFTs are not interchangeable because each one has distinct properties and value.
For more information about NFTs, please read our article called What is an NFT?
Altcoins refer to any coin that is not Bitcoin. By this definition, all tokens are altcoins, but not all altcoins are tokens. Coins like Ethereum (ETH) and Solana (SOL) are considered altcoins that run on their own blockchains, and tokens are built on top of existing blockchains.
Yes, a token can become a coin if it moves from an existing blockchain to its own independent blockchain, a process called a mainnet launch. Projects like BNB, TRX, and EOS started as tokens on Ethereum before migrating to their own networks. Once migrated, the token is replaced by a native coin that operates independently.
Yes, a token can exist on multiple blockchains through multi-chain deployment or bridging mechanisms. Some tokens, like USDC and USDT, have native versions on different blockchains (e.g., Ethereum, Solana, and BNB Smart Chain), while others use cross-chain bridges to transfer assets between networks. However, these versions are not always interchangeable unless a bridge or conversion mechanism is available.
Wrapped tokens, like WBTC (Wrapped Bitcoin), are versions of cryptocurrencies designed to work on a different blockchain. Unlike regular coins and tokens, which are created natively on a blockchain, wrapped tokens are backed 1:1 by the original asset and issued through a system that locks the original and mints an equivalent token on a new blockchain. This allows assets like Bitcoin to be used on Ethereum while keeping the same value.
Yes, you can mistakenly send EVM-based tokens (like ERC-20 tokens) to the wrong blockchain, especially between Ethereum (ETH) and Ethereum Classic (ETC) or other EVM-compatible networks (e.g., BNB Smart Chain, Polygon, and Arbitrum).
Since these blockchains share the same address format, a wallet may accept the transaction even though the token is not supported on the receiving network. In such cases, recovering the funds often requires importing your wallet backup into a wallet that supports both blockchains or using a cross-chain recovery tool.
To learn more, please read our article called How to choose the right network?
Before sending a token, you can check if it is supported on a specific blockchain by:
Looking up the token on a block explorer – Use blockchain explorers like Etherscan (Ethereum), BscScan (BNB Smart Chain), or Polygonscan (Polygon) to verify if the token exists on that network.
Checking your wallet’s supported networks – Make sure your wallet (Trezor Suite or your third-party wallet of choice) supports the blockchain where you’re sending the token.
Reviewing the token’s official documentation – Many tokens are issued on multiple blockchains (e.g., USDC exists on Ethereum, Solana, and BNB Smart Chain), and the official website will list supported networks.