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Token
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A token is a digital asset created on an existing blockchain, representing value, ownership, or access rights.
Simple Explanation
Tokens are like game coins or gift cards that exist on a blockchain. Just as arcade tokens let you play games, blockchain tokens can represent anything from currency to membership rights to digital art.
Types of Tokens
Fungible Tokens
- Interchangeable (like dollars)
- Examples: ERC-20 tokens, stablecoins
- Used for: Currency, rewards, governance
Non-Fungible Tokens (NFTs)
- Unique and not interchangeable
- Examples: Digital art, collectibles
- Used for: Ownership proof, unique assets
Common Standards
- ERC-20: Fungible tokens on Ethereum
- ERC-721: NFTs on Ethereum
- ERC-1155: Multi-token standard
Example
USDC is a token on Ethereum that represents 1 US dollar. Each USDC token is identical and can be exchanged for any other USDC token.