What is a token?

A token is a physical or digital object with value in a certain context or for a certain community. Casino chips, for example, are just pieces of plastic of different colors, but they represent amounts of money. What is the meaning of its creation? There are many reasons: comfort, security, ease of transport or transfer. In the crypto world, tokens are generated from pieces of programming code, in the form of intelligent contracts that run on the blockchain.

Tokens and crypto-currencies

In 2009, when it was created by Satoshi Nakamoto, Bitcoin became the first cryptomoney. Other tokens immediately emerged.

Today, token and crypto currency are used synonymously, but not all tokens are crypto currencies.

Types of tokens

Currency Token

While Bitcoin (in capital letters) refers to the network, bitcoin (in lowercase) is the currency of that network. And those bitcoins no longer have a use restricted to the Bitcoin network: they can be used for any everyday transaction, as a replacement for traditional money.

Utility Token

They are the unit of account of a network or blockchain, that is the symbol used to measure a certain amount of an asset. They can be fungible, i.e. each unit represents the same value, non fungible tokens, each unit is of unique value, for example collection tokens.

Safety token

The most popular security tokens are those known as OTP Tokens (One-Time Password).

Some of them generate keys that are renewed from time to time: we have, for example, a number that we can only use once because after 30 seconds it changes

Asset Token

It is designed to represent real world objects, to facilitate the purchase and sale of physical items without the need to move them from one side to another. With an asset token we could buy and sell gold, for example, without the need to transport it.

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₿itcoin

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₳da (Cardano)

addr1qxdlld4mux6gl38860w297lse59m0646v68x6sraw0asp85ml7mthcd53lzw057u5talpngtkl4t5e5wd4q86ulmqz0qskgn43

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Li₿εʁLiøη

Li₿εʁLiøη

Researcher — ϚʁyptøWriter — Content Creator | Twitter @liberlion17 website: liberlion.com