A coin is a digital asset that serves as the native unit of a particular blockchain. A coin exists directly within the protocol of its own network and is commonly used to transfer value, pay transaction fees, and provide economic incentives.

For example, BTC is the native coin of Bitcoin, while ETH is the native coin of Ethereum. The rules governing these assets are defined by their respective blockchain protocols.

Uses of a coin

  • transferring value between addresses;
  • paying network fees;
  • rewarding miners or validators;
  • participating in the network economy;
  • in some networks, participating in governance or network security.

In networks using Proof-of-Work, new coins may enter circulation through block rewards. In Proof-of-Stake networks, issuance and distribution may be connected to validators and staking.

Coin vs. token

The key distinction is how the asset is created. A coin is the native unit of its own blockchain. A token is generally created on top of an existing blockchain using its standards and programmable infrastructure.

The word coin is sometimes used informally for any cryptoasset, but this usage can be technically imprecise.