Token, What does it mean?

Token is a term used in the cryptocurrencies field. It is key to understand it in order to fully understand this world

Definition of Token

Tokens are digital assets built on top of an existing blockchain. Most crypto tokens today are built on Ethereum’s ERC-20 standard and come in different flavors, including: Utility tokens, Security tokens, Meme coins, NFTs. Technically, “token” is just another word for “cryptocurrency” or “cryptoasset.” But increasingly it has taken on a couple of more specific meanings depending on context. The first is to describe all cryptocurrencies besides Bitcoin and Ethereum (even though they are technically also tokens). The second is to describe certain digital assets that run on top of another cryptocurrencies’ blockchain, as many decentralized finance (or DeFi) tokens do. Tokens have a huge range of potential functions, from helping make decentralized exchanges possible to selling rare items in video games. But they can all be traded or held like any other cryptocurrency. Generally crypto that is built on top of another cryptocurrency is a token, for example many tokens raise money through an ICO and are built on the Ethereum network and recently some are being built on EOS.

Token is related to

CoinUtility tokenSecurity tokenMeme coinBlockchain

See more: Cryptonyms glossary