All this may sound very complex but in short, a token represents a utility or a digital asset that can have very diverse purposes, while a cryptocurrency is a currency whose main purpose is to serve as a decentralized means of payment for products and services in the virtual environment, as well as a store of value and unit of account.

Currently, token and cryptocurrency are used as synonyms. In short, ETH is Ethereum's token, BTC is Bitcoin's and DAI is MakerDAO's token. However, in the distinction he points out that cryptocurrencies have their own blockchain, while tokens are issued on another blockchain, such as Ethereum.

Generally, a cryptocurrency runs on its own blockchain, while a token adheres to the blockchain of another cryptocurrency.

When we say it adheres we simply mean that it uses the blockchain of another cryptocurrency to function e.g. chainlink is a token that provides a service and has been developed using the Ethereum blockchain.

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In addition, it should be noted that there are other types of crypto tokens that are not cryptocurrencies. The most obvious example is NFTs, literally "non-fungible tokens", a format that allows you to obtain everything from collectibles to digital art or video game characters.

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To learn more about what a token is click here.

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