A token is a digital asset that is created, managed, and transferred on a blockchain. Unlike cryptocurrencies like Bitcoin or Ether, which function primarily as forms of digital money, tokens can represent a wide range of assets and utilities within a specific blockchain-based platform or ecosystem. Tokens are typically issued through smart contracts on existing blockchain platforms, such as Ethereum, and can serve various purposes including representing ownership rights, access to specific services, participation in governance, or acting as incentives within a decentralized application (DApp). Tokens are classified into several types, such as utility tokens, which provide access to a product or service; security tokens, which represent investment assets; and governance tokens, which grant voting rights within a project's decision-making process. The versatility and programmability of tokens make them integral to the functioning of decentralized finance (DeFi), non-fungible tokens (NFTs), and other innovative blockchain applications.
