What is a Token?. A token is a digital asset issued on top of a blockchain. It can represent currency, access, governance, claims on reserves, or unique items depending on its contract design.
How it works
Smart contracts define supply, transfer rules, and special roles. Wallets track balances by reading contract state, not by storing coins themselves.
Why it matters
Tokens let projects launch assets without running a separate blockchain, enabling rapid experimentation and interoperability.
Common pitfalls
- Assuming every token share equals equity
- Approving malicious spenders that can drain balances
- Confusing network fees with token transfer rules
Quick example
A music platform issues a token that grants discounted access and community voting on feature priorities.
See also
- Coin vs. Token
- Governance Token
- NFT
TL;DR: What is a Token? defined in plain English with practical next steps.
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