The Tragic Tokens 😳

Behind cryptocurrency is a huge technical base, and hence it includes complex terms such as Tokens. Let’s take a shot and clarify what is a Crypto Token.

What is a token?

In fact, the name “Token” speaks for itself. It is just a conventional functionality unit created according to the existing blockchain standards, like ERC20. In other words, the company issues a contract on an external Blockchain (like Ethereum) that serves as fuel for in-platform operations.

Types of Tokens:

• Commodity tokens (Digix, El Petro). These tokens are backed by real-world commodities, whether it is gold, silver or oil. The rate of these tokens depends on the rate of commodity backing.

• Protocol tokens (Gnosis, Stellar). These are cryptographic pieces of code required for access to protocols that a certain service utilities, like building DApps or Decentralised Exchanges for Ethereum.

• Security tokens (Tezos, Polymath). These tokens act as a company’s share. Basically, with these tokens, you may own a part of the company, like in a stock market.

• Collectible tokens (Cryptokitties, RarePepe). These tokens represent a virtual collectible unit, like baseball cards, adorable kitties or memes but on the blockchain.

That's it for the day, Web3Shala Signing Off ✌🏻

Have a nice day :)Keep Learning 🙏🏻