The term "Token" in the world of digital currencies refers to a unit of value that is often issued on an already existing blockchain network, such as the Ethereum network or BNB Smart Chain. Here is a simplified explanation that can be used as content:
What is a Token in digital currencies?
A Token is a digital asset created on a blockchain network, representing different things such as:
- Digital currency
- Right to use a service
- Ownership of a product or project
- Or even ownership of a non-fungible token (NFT)
The difference between a Coin and a Token:
A Coin like Bitcoin or Ethereum has its own blockchain.
A Token like USDT or SHIBA is built on an existing blockchain such as Ethereum.
Types of tokens:
1. Utility Tokens – Used to access specific services in a project.
2. Security Tokens – Represent ownership in an asset or project and may be subject to legal regulation.
3. Governance Tokens – Give the holder the right to vote on project decisions.
4. Stablecoins – Tokens pegged to the value of a real currency like the dollar (such as USDT)