Tokens can be described as digital units of value representing specific assets or utilities that rely on existing blockchain technology.

In a tokenization, an asset or contract is linked to a digital representation – the token – on a blockchain. A (blockchain) token is thus a digital asset that represents an object of ownership. The ownership of tokens is regulated via a blockchain.

There are different types of tokens for different application purposes. The most common are security tokens, utility tokens, non-fungible tokens and payment tokens. In addition, there are a number of other tokens, such as social tokens or ERC tokens.

Similar terms

Payment Token

As the name suggests, payment tokens are classic cryptocurrencies that can be used as a means of payment.

Utility Token

Utility tokens provide access to a product/service and/or represent the right to use a product/service or function of a project.

Personal Token

Personal tokens (also known as social tokens) are a special form of token that allow for investors to share in the issuer's (personal) earnings.

Security Token

A security token (also "equity token" or "investment token") is a cryptographic token that is tied to a value or security.