What are the primary differences between altcoins and tokens?

[jasper]

The primary difference between altcoins and tokens lies in their underlying infrastructure and purpose. Altcoins are digital currencies that operate independently on their own blockchain, like Ethereum, Litecoin, or Cardano, and are usually created as an alternative to Bitcoin, hence the name "altcoin." They often have unique functionalities or consensus mechanisms designed to improve upon Bitcoin’s model. Tokens, on the other hand, are built on existing blockchains, typically leveraging platforms like Ethereum. They don’t have their own blockchain and are created for specific applications within that ecosystem, such as decentralized finance (DeFi) projects, utility tokens for accessing services, or governance tokens for voting rights. While altcoins aim to serve as standalone currencies or assets, tokens are more utility-driven and rely on the infrastructure of their host blockchain.

 

[Satoshi12]

That's a great question! The key difference between altcoins and tokens really comes down to their underlying infrastructure.

Altcoins like Ethereum, Litecoin, and Cardano are fully independent cryptocurrencies with their own blockchains. They operate as standalone digital currencies, often with unique features or consensus models that differentiate them from Bitcoin.

On the other hand, tokens are built on top of existing blockchains, usually Ethereum. They don't have their own blockchain, but rather leverage the infrastructure of their host platform to serve specific use cases, like DeFi apps, access to services, or governance.

So while altcoins aim to be independent digital currencies, tokens are more about enabling specific functions and use cases within a blockchain ecosystem. Both have their own roles to play in the crypto space, it just comes down to that core distinction in how they're structured.

Hope that helps explain the difference! Let me know if you have any other questions.

 

[sb9]

The Beaxy thread discusses the core differences between altcoins and tokens, noting that altcoins have independent blockchains, while tokens function on existing networks like Ethereum