Tokens are one of the most essential creations of blockchain technology and cryptocurrencies, enclosing unique features and opening doors for applications that we have yet to discover.
Ehe concept of token is perhaps one of the most common in the sector of cryptocurrencies, .
A simple definition and what is a token could be:
Tokens are objects similar to coins, although they have no value on their own. This is because the tokens are issued by a private entity for a specific use and low-value materials are normally used in their preparation.
This means that, in most cases, the creation of a token stems from a private need and therefore has little value. However, their value can be very high within the community that makes use of them. This is precisely what happens in cryptocurrencies, where tokens like the Bitcoin they are widely accepted and represent high value.
In fact, the launch and presentation of the tokens has become very popular, being an elemental piece of the Initial Coin Offering (ICO).
Origin of the Tokens
We can say that the origin of the tokens were the tokens, pseudo-currencies or vouchers that were used as a replacement for fiduciary money. or as a representation of a good or service.
These had a certain value within an ecosystem in which everyone agreed with their use and exchange. A good example of tokens today are casino chips. Another could be the coins that were given to miners in the late XNUMXth and early XNUMXth centuries, a very common practice in the United States, as it allowed miners to buy items in the company commissary.
However, these ancient tokens were easily counterfeitable and controlled by an entity that he could issue as many as he wanted. This means that these first tokens were not very transparent and fair.
Token technology remained largely unchanged until the advent of the blockchain, when tokens inherited some of the characteristics of cryptocurrencies. Among them the traceability, security and the impossibility of counterfeiting.
In this way, the possibility of create tokens that were highly secure and trusted, allowing companies and private individuals to generate them for different uses. Currently, the generation of cryptographic tokens or blockchain tokens is in full expansion, thanks to the security and flexibility that they provide.
Cryptographic tokens
A peculiarity of these cryptographic tokens is that they are all based on the blockchain of a third party. The first cryptographic tokens were developed on the Bitcoin blockchain and were called colored coins. Being one of the best known creation platforms Counterparty.
Currently there are many blockchains that allow the creation of tokens in a simple way. For example, Waves, TRON, NEM u omni.
Although Ethereum is the platform par excellence, since it allows the development of a Smart Contract to create a token quickly and easily. Ethereum is perhaps the most widely used blockchain for the development of new tokens.
This situation was driven by the creation of standards ERC-20 y ERC-721. Both allow the rapid creation of tokens on the Ethereum blockchain by associating smart contracts for it.
Ethereum has more than 450 thousand ERC-20 tokens different, and more than 1.300 ERC-721 tokens.
Types and Standards of Cryptographic Tokens
Token types
- Security Token. These are similar to any other known token, but tied to traditional security (values) and their characteristics.
- utility token. They are application or user "tokens". They allow future access to the products or services offered by a company. Therefore, they are not created to be an investment.
- Equity token. They are a very special type of token closely related to security. These work like a traditional stock asset. They represent ownership of some third-party asset or company. In addition, its value is associated with the success or failure of said property.
The three types mentioned above allow those who use them a series of financing tools tailored to their needs. In fact, thanks to this flexibility and its high integration with blockchain technology, some projects choose to launch tokens for financing and then change them to their own blockchain. This would be the case Ethereum, NEM o TRON.
token standards
- CKD-20: it is the most popular standard. They are fungible tokens (that is, they can be exchanged between them) and they implement an API for their development through smart contracts. This standard allows the interaction of smart contracts and DApps, facilitating the creation of an interoperable ecosystem.
- CKD-721: It is the most widely used standard for creating NFT. This standard allows to implement unique characteristics to each unit, making them unique and cannot be changed by another.
- CKD-1155: It is a type of token that can mix the characteristics of ERC-20 and ERC-721 tokens.
- SLP: the native standard of the Solana ecosystem. This has a unique feature and that is that they are usually compatible with the ERC-20 and ERC-721 standards.
- BEP-20: This is the Binance Smart Chain (BSC) standard and offers a flexible framework for the development of utility tokens, stablecoins and even NFTs.
- TRC-10 and TRC-20: This is the native standard of the Tron network, with multi-smart contract capability and some unique features such as low gas rates or interoperability.
- ERC-20 Waves: It is a version of the Ethereum standard developed by Waves for the development of enterprise-level decentralized applications. It offers interoperability capabilities with different protocols and exchanges.
- NEP-5: this is the standard of the native tokens of the NEO blockchain. This standard has a particularity and that is that all tokens contribute in some way to the development and expansion of the NEO ecosystem.
Of course, you have to be very careful. The ease of launching tokens has also meant the appearance of many projects without any value or with the sole purpose of defrauding.
Like cryptocurrencies, cryptographic tokens can be listed on exchange houses. So its price can go up or down depending on supply and demand. Which is influenced of course by the expectations and real evolution of the project to which they are linked.
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