Ethereum token
A representation of almost anything on the Ethereum blockchain. Managed by a smart contract, a token can represent a cryptocurrency other than Ethereum's own Ether (ETH), a physical item in the real world, an IOU, access rights, an identity, a certification or a collectible (see non-fungible token).ERC-20
ERC-20 (Ethereum Request for Comments-20) are the rules for developing Ethereum tokens. Ethereum-based initial coin offerings (ICOs) are generally ERC-20 compliant because most digital wallets support ERC-20 tokens. Crypto creators naturally want as many wallets as possible to handle their tokens so they can make a fortune sooner than later. See wrapped token.
Ethereum's native crypto was created before ERC-20 and is therefore not ERC-20 compliant. However, ETH can be "wrapped" in a token for compatibility (see wETH). See Ethereum.
Token Types
Following is a summary of token types, which applies equally to Ethereum and non-Ethereum blockchains.
Currency Token
A cryptocurrency with value determined via private trade.
Resource Token
A resource earned or produced such as a storage or CPU token representing resources in a network.
Asset Token
A representation of an asset such as gold, real estate, a car or amount of energy.
Access Token
Grant access to a digital or physical property, such as a forum, website or hotel room.
Equity Token
Shareholder equity in a digital organization; for example, a DAO or corporation. See DAO.
Voting Token
Voting rights in a digital or legal system.
Collectible Token
A digital collectible. See non-fungible token.
Identity Token
An avatar or legal identity such as a national ID.
Attestation Token
Certification by an authority such as a birth certificate or college degree.
Utility Token
Access or pay for a service.
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| Excerpted from This Excellent Book |
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| The token explanations above were taken from this book and abbreviated. "Mastering Ethereum" is a must-read for every future Ethereum developer. As blockchains are a dynamic subject, terms are used interchangeably, and any particular type of token may be called by several names as well as represent several of these functions. |
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