Token vs coin: whose network keeps the ledger and who is responsible for the issue

A coin is a blockchain's own native asset, the one that blockchain serves: the reward for maintaining the network is counted in it, and the fee for a transfer is paid in it too. A token is an entry on someone else's network, created by a program (a smart contract) running on top of a ledger that is already in operation; the fee for transferring a token is still charged in the coin of the network the token lives on. Every other difference grows out of this one: who the issuer is, what happens when something breaks, whom to ask when the asset stops moving, and which regulation it falls under in Russia.

Whose network, whose ledger

A coin has a ledger of its own. The rules of issuance are written into the protocol and can change only with the consent of those who run that protocol: developers, validators or miners, and node operators. The emission schedule cannot be changed without that consent, and an attempt to split the community ends in a fork, a divergence of the chain.

A token has no ledger of its own. What it has is a contract on a host network: code that maintains an "address — balance" table and can modify it according to set rules. Those rules are written by the issuer, and the scope of the issuer's power is defined by what the issuer built into the code. The contract may allow new units to be minted, individual addresses to be frozen, and the logic to be upgraded through an admin key — or it may allow none of this. The difference between two tokens on the same network can be greater than the difference between a token and a coin.

Who pays for the transaction, and in what

The practical consequence that newcomers run into most often: to send a token, you need the host network's coin on the same address. A wallet holding tokens and a zero (or rather, empty) balance of the base coin is stuck — there is nothing to pay the fee with. A coin needs no such second asset: it is itself the means of paying fees on its own network.

The second consequence is dependence. Congestion on the host network, rising fees, a halt or a rollback affect every token on it, regardless of the quality of any particular project. A coin depends only on its own network.

The issuer: protocol versus team

When you hold a coin, you have no counterparty in the legal sense: there is no organisation that owes you anything. When you hold a token, there usually is a counterparty — the team, foundation or company that deployed the contract. This is neither better nor worse; it is a different type of risk. For a coin the risk is technological and network-related; for a token, issuer risk is added on top: the promises the issuer made and the keys the issuer still holds.

A separate class consists of tokens that represent a claim on something external: an equity stake, a debt, a metal, a square metre of floor space. The mechanics of such backing are covered in the entry on tokenisation; its central question is what backs the ledger entry and who is obliged to honour it. If there is no answer, the token is backed only by the belief people have in it.

"Coin" in the Russian sense: metal, not blockchain

In Russia, searches for "coin" also come from a different subject altogether: an investment coin is physical metal struck by a state mint, with its own tax treatment and its own premium over the metal price. Nothing links it to a cryptocurrency coin except the word. If you were looking for metal, what you need is the glossary, not this article.

What this changes for a Russian investor

Russian law does not use the coin/token distinction. The law on digital financial assets, in force since 2021, introduces a category of its own — DFAs, digital rights issued in an information system run by an operator listed in the Bank of Russia's register. In its mechanics a DFA is close to a token: there is an issuer, there is an obligation, there is an operator platform. Cryptocurrency without an issuer does not fit this framework; it is recognised as property, but not as a means of payment inside the country.

Hence a simple rule: the legal form matters more than the vocabulary. A token on someone else's network and a DFA at a Russian operator have similar names, yet different parties are liable for them and different courts hear the disputes.

How to analyse a specific asset

Step 1. Find out whether the asset has its own network. If it lives at a contract address on another network, it is a token, whatever the marketing calls it.

Step 2. Read the contract's permissions: who can mint new units, freeze balances or change the logic.

Step 3. Identify the issuer and the issuer's obligation. No obligation means no backing.

Step 4. Understand which coin you pay fees in and what happens when the host network is congested.

The logic of "work out who the issuer is and whose ledger it is" applies beyond crypto. Where the distinction comes down to legal form rather than the name, it helps to compare with a familiar market: the differences between share classes are covered separately, as are the discrepancies between RAS and IFRS in financial reporting — there, too, the same object is described under different rules.