What are tokens? Digital tokens? What are they used for and what do they represent?

In the crypto-economy sphere, there are over 6,000 crypto-assets. Some are coins, others are tokens. There are also "stable coins". But what is a crypto-currency?

There are so many different terms... Let's sum them up!

There are two main asset classes: coins and digital tokens.

Corners" (parts digital) :

Digital coins are digital units used as native currency in their own right. blockchain. The Bitcoin digital coin operates on the bitcoin blockchain, while the Ether digital coin operates on the ethereum blockchain. Digital coins are used as a currency, (so-called: crypto-currency) because they are intended to be used only according to these three characteristics:

-> For the transfer of value, (sending and receiving money peer-to-peer).

-> As a store of value (retaining value for future use).

-> As a unit of account (you can associate the price of a good or service with this numerical part).

It's exactly the same as the fiat money we're already familiar with: euros (€), dollars ($), etc. To date, there are around 1,000 different coins.

Tokens:

Digital tokens are digital units used for the functionalities of an application for which they have been designed. These digital tokens do not have their own blockchain; they are encoded on a parent blockchain that hosts them. Very often they are hosted on the ethereum blockchain and are referred to as ERC-20 tokens.

For example: the OCEAN token is designed by the ocean protocol project to open a marketplace for data in a totally private, secure and reliable way. Many tokens are used for decentralized projects.

Creating a token is quicker and easier, as all you need to do is use an existing parent blockchain. Each token is used in the economy of the project of which it is native, and has no use outside the project. Like currencies in video games, for example, they enable players to buy armor and upgrades, but they only have value within the video game in question. To date, there are around 5,000 different tokens, each associated with a specific project.

Once we've understood the two main families of crypto-assets, let's talk about a slightly more special asset.

They're part of the token family, but misleadingly referred to as "stablecoins". They are tokens specially created to represent the value of a fiat currency (euro, dollars). In other words, 1 token (USDT, for example) has the value of 1 dollar. Stablecoins make it possible to send dollar-backed value around the world very quickly and at very low cost.

In future articles, we'll be talking about the different types of token that exist. We'll go into more detail. If you have any questions, please don't hesitate to ask.