What is token and what is it for?

[Olatoolz]

After bitcoin and blockchain, it is now time to get acquainted with another novel concept brought about by the digital economy: The ‘token’. What is this concept that is leading some people to speak about new discipline, ‘tokenomics’?

In the digital world, minting currencies is an activity that doesn’t seem to be restricted to central banks anymore.  Bitcoin is the best example of how, from a private environment, a blockchain-based virtual currency can be rolled out in the market, albeit subject to many limitations due to the lack of a legal framework to regulate it. But bitcoin was just the beginning of a fully-fledged revolution, the second step of which might very well be the tokens.

A token is actually nothing more than a new term to make reference to a unit of value issued by a private entity.   Although tokens bear many similarities with bitcoins (they have a value attached to them which is accepted by a community and are blockchain-based), they serve a much broader purpose. Tokens are more than a currency because they can be used in a broader range of applications. Also, virtually all tokens rely on Ethereum’s blockchain protocol, which, according to experts, is more complete than bitcoin’s blockchain.