A token is an asset based on a blockchain, but it is independent of the functioning of the blockchain itself. This is where it differs from a cryptocurrency. The creation of a cryptocurrency is built into the process of continuing its native blockchain, like Bitcoin the cryptocurrency of the Bitcoin blockchain, or Ether on Ethereum. Tokens sit on top: they are, in fact, really a form of smart contract that updates the blockchain with credit/debit instructions.
Articles in this section
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- What is minting, is it the same as mining?
- What is an NFT?
- What is an oracle?
- What is tokenization?
- What is an ERC-20 contract, token, and wallet?
- What is a token? How does it differ from a cryptocurrency?
- What is a smart contract?
- Open, permissionless, decentralized – what does it all mean?
- What is a blockchain?