Tokens 101: How do they Function and What is their Value
By Luke Flowers – Cryptocurrency Broker
If you want to grasp the vast plains of blockchain Cryptocurrencies, then it is imperative to know how to distinguish between fungible and non-fungible tokens. Cryptocurrencies and cryptographic tokens are widely known in the market now. Even though they rose to fame in a short time, there's a few out there who know the correct way to use these interchangeably where many are buying and selling Bitcoin and other crypto for speculation.
Cryptocurrency is digitally encrypted currency meant for exchanging purposes. Most users will buy cryptocurrency for this purpose. In most scenarios, transactions are verified by the means of cryptography, which also works to maintain the formation of newly ‘minted’ coins on a specific cryptocurrency network. Regarding Bitcoin, this is referred to as mining and many others use this term.
What do they do?
However, when it comes to Tokens, they themselves are a unique kind of digital currency. They can stand for many different assets and elements. An example would be a token on the Ethereum network that has a specific purpose.
The concept is that the entire platform is the field where these tokens can be used, they don’t need other channels or blocks. They can be used for utilities because they act as money, value or purpose, however, this function is only possible within that specific platform. You wouldn’t buy cryptocurrency native to a platform you weren’t planning to use.
There is an undeniable connection to stocks and debts as well. Recently, the Ethereum chain created the most tokens and maintain the ERC20 standard. Some of these tokens are still in early stages of development but could provide invaluable functionality.
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