What is coin? We have often heard this term in the cryptocurrency field. A coin is defined as a cryptocurrency or digital cash that is independent of any other blockchain or platform. A coin’s key feature is that it is basically a currency of the blockchain that it operates on.
Coins are different from typical cryptocurrency tokens as they are not intended to serve utility functions - such as to represent votes within a community or to denote storage capacity on a decentralized cloud storage. Instead, a coin operates on its own independent blockchain and acts like a native currency within a specific financial system. Accordingly, a coin is basically used as a medium of exchange or store of value within a digital economic network. Most blockchains work as a decentralized, distributed ledger that tracks and verifies each transaction, and their native coins can only be transacted between participants of this particular network.
A coin, as a single unit of currency, can be traded based on a value that is agreed upon by the market. Occasionally it can be exchanged for a different coin or token that belongs to another blockchain, either through a cryptocurrency exchange or through private transfers (like peer-to-peer and OTC trades). Furthermore, decentralized exchanges and atomic swaps are legitimate alternatives for coin and token trading.
Many companies and startups in the blockchain industry choose to conduct fundraising prior to building their own blockchain, and this is often done through an Initial Coin Offering (ICO) crowdsale. This means that rather than issuing their native coin, these companies create a digital token that is issued on top of an existing blockchain network.
In Conclusion
What is coin? It is essentially a token in cryptocurrency that is used purely for financial purposes like trading for other currency (such as fiat money and other crypto coins).
