What are tokens? How many types of tokens exist?
A token is the digital representation of information: this information can be a good or a function. It can be whatever the creator wants it to be. The token, in this sense, is nothing but the form: its content is variable and does not affect the objective configuration of the token.
We can see a token as the digital version of what we are used to seeing in paper form: shares, money, bills, bonds, property certificates, discount coupons, entrance tickets, gift cards, etc.
Therefore, each token has, from time to time, a very specific meaning.
The concept is not new; it is indeed very common for those who dabble a bit of computer language: token is the gadget that authorizes a user to perform a specific action or a fixed array of symbols that identifies a user. In this sense, the basic property of the token is its transferability between different owners.
How many types of tokens exist?
Several times, we tried to classify tokens, but it’s not easy as you may think: one token can mix different characteristics, that is, some that seem to make it belong to one category and others to another.
In general, a token can serve one of these functions:
• A currency, that is, a payment system between users
• A unit of account
• Payment to access a service
• A digital resource, such as a digital right, for example, a certificate of ownership, or such as a share (stake) in a specific start-up.
All these functions, as anticipated, have been subject to a classification that mostly considers:
• A utility token, necessary for accessing a service, an online service for the most;
• Payment token used as alternative coinage;
• A security token, as an asset digital container.
Utility tokens are the most hybrid: a utility token is used as an internal payment system and has value only within the ecosystem that created it, but there are two cases (limitations in their issue or increase in demand) in which its value can be greatly appreciated. This double functionality makes it sometimes difficult to determine a utility token exact definition.
How do I create a token?
Generally, a token is generated by writing the lines of code: we must, therefore, know the syntax and semantics of an ERC20, the protocol of smart contracts generated by Ethereum.
However, for those who have no coding skills, there is finally a service that allows creating tokens in a few minutes.
Thanks to Noku Custom Token, simply by accessing a simplified interface, entering the required information (name, ticker, logo, total supply of the token) and by clicking “Create”, everyone can make their own token, regardless of the asset or function they want to represent.
Noku Custom Token allows you to tokenize your business idea, connecting the blockchain world to the real one.
You are now able to try and create their own Custom Token service for free, only paying for Ethereum Fees.