Having a basic understanding of what a cryptocurrency is would help to know how they differ. The primary distinctions among the various cryptocurrencies include the methods of coin production and their usage.

The production of some coins, like Bitcoin, Dash, and Monero, is a process known as "mining," which entails employing potent computers to solve challenging cryptographic problems. The mechanism gives coins to the successful "miner" after a problem is solved (bitcoins, dash coins, etc.). The miner can later market the coins for sale.

Some coins, like NEM (XEM), use different kinds of algorithms that don't need a lot of processing power. Then there are currencies that are produced by an entity that backs the money, such as ripple and IOTA, which cannot be mined.

When it comes to spending, Bitcoin is the cryptocurrency that is most widely accepted by retailers and service providers . Others, such Litecoin and Dash, are aiming to expand the range of transactions available to their owners. However, some currencies' main purpose is not to be used for daily purchases like buying coffee or clothes. For instance, ether is intended to be used as payment for the blockchain-based Ethereum platform's services, as well as to build and use applications on it. Other important differences are the privacy and transaction speed that a cryptocurrency offers.

Lastly, As units of cryptocurrency, “coin” and “token” mean exactly the same thing, the difference is technical. Coins are the native cryptocurrencies of the blockchain they run on. Bitcoin is a coin because it runs on the Bitcoin blockchain. Ether is a coin because it runs on the Ethereum blockchain. Tether is a token. The token maker created it to run on Ethereum, not on its own blockchain. Cardano is a coin because it runs on its own blockchain, while Uniswap is a token that runs on Ethereum.

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