Token is a currency that is issued by borrowing the system of an existing cryptocurrency platform (Bitcoin or Ethereum). It is a currency that does not have its own blockchain.
Because it uses existing blockchain technology, it facilitates the issuance of cryptocurrency by individuals and companies.
It is especially used for ICOs (token-based fundraising) or as an internal currency that can only be used within a project or application.
Differences between existing cryptocurrency platforms and tokens
- Bitcoin, Ethereum, etc. are currency-type cryptocurrencies
- A token is an asset-type cryptocurrency
The most important feature of the currency type is that the total amount and supply of the currency is predetermined and cannot be increased or decreased by human will.
Tokens are cryptocurrencies belonging to the “asset type,” which are centralized and the number of tokens issued can be freely decided. Tokens are like stocks.