Token is a cryptographic digital proof of ownership that can be circulated on the blockchain, representing various proofs of ownership, from identity cards to academic diplomas, from currency to bills, from keys, tickets to points, coupons, from stocks to bonds, all proofs of ownership in human society can be represented by tokens, not limited to currency.
Usually, tokens are issued and managed by smart contracts on the blockchain, which define the issuance quantity, circulation rules, and other attributes of the tokens.
Currently, on the Ethereum blockchain, there are mainly two types of tokens that represent value:
- "Interchangeable ERC20 standard tokens", interchangeable tokens can be likened to various digital cryptocurrencies, such as Ether, Tether, and so on.
- "Non-interchangeable ERC721 standard tokens". Non-interchangeable tokens can be likened to deeds, which are commonly known as NFTs.