Overview
In the blockchain context, a token is a digital unit of value issued by a project on top of an existing blockchain network (like Ethereum or BNB Chain). Unlike a 'coin' (like Bitcoin or Ether), which is the native asset of its own blockchain, tokens rely on smart contracts to function.
Key Types
- Fungible Tokens: Identical and interchangeable (e.g., ERC-20 tokens).
- Non-Fungible Tokens (NFTs): Unique and non-interchangeable (e.g., ERC-721 tokens).
Use Cases
Tokens can represent anything from a share in a company to a loyalty point, a digital collectible, or even a right to access a specific service.