Definition
A token is a digitally represented unit of value, access, ownership, or another defined interest tracked under a protocol's rules. In common cryptocurrency usage, tokens are often distinguished from coins native to a blockchain: BTC is native to Bitcoin, while an ERC-20 asset is tracked by a contract on its host network. However, terminology varies, and not every token system uses a general-purpose smart contract. Bitcoin-based conventions can rely on separate indexing rules that interpret underlying transactions. A token's name or ticker does not uniquely identify it; the network, contract or protocol identifier, and issuance rules are more precise. Tokens can be fungible or non-fungible and can represent very different rights. Creating a token does not by itself create reserves, enforce off-chain promises, establish market demand, or guarantee that the issuer cannot change important controls. Those properties require separate examination.
Source references
References accompanying this glossary entry:
- https://ethereum.org/developers/docs/standards/tokens/
- https://docs.ordinals.com/runes/specification.html
Educational reference, not financial advice. See our financial disclaimer and editorial policy.