DeFi 10124 August 2021

What are Tokens in the crypto world?

Cryptocurrency Tokens

Summary

  • Crypto tokens are a type of cryptocurrency
  • Tokens represent an asset or specific use and reside on their blockchain
  • Tokens can be used to make purchases, for investment purposes, or to store value

Tokens in cryptocurrency is a term used to refer to specialized digital currency tokens that represent tradable or fungible utilities or assets residing in a blockchain. Tokens are used mostly for fundraising purposes in crypto, even though they can be substituted for other needs.

The creation, distribution, selling, and circulation of tokens is done through a standard ICO (initial coin offering) process involving crowd-funding for project development. Just like cryptocurrencies, tokens can be held or exchanged at value.

Tokens can also represent utility, service, or a physical asset. For instance, cryptocurrency tokens are used as representations for digital art or real estate.

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