What is Token?

Cointral Marketing Manager
What is Token?

Token is one of the terms we constantly hear in the digital money universe. People mostly associate it with ICO / IEO process. The difference between Coin and Token is often a matter of curiosity. In short, token is a digital entity; and coin is a digital money. If you would like to find out more about this topic, please see our article  “What is the difference between coins and token?”

What is Token?

Token is a digital asset built on a platform or application basis that allows you to take advantage of all aspects of the platform. Tokens can be produced in order to maintain the continuity of the platform and increase the quality. Tokens have a blockchain system just like digital coins and are in transferable form.

When creating a token, Ethereum Blockchain is generally preferable because of its smart contract feature. ERC-20 or ERC-721 standards may be better depending on the nature of the buckle to be formed. What are the ERC-20 and ERC-721 standards?

What do the ERC-20 and ERC-721 standards mean?

The ERC-20 and ERC-721 are both token standards. Both standards are relevant with token production on the Ethereum blockchain. Token standards provide guidance to people who want to produce tokens. This minimizes the difficulty of the token production process. However, the token generated is subject to certain protocols on Blockchain.

There are some points where ERC-20 and ERC-721 standards are different from each other. Because it is easy to create unique tokens with the ERC-721and they are different. To summarize, the tokens created with ERC-20 are exchangeable among themselves by dividing into small units, the ones built with ERC-721 are unique and formed by a single unit.


To put it briefly, ICO can be called a process of capital creation for a project. A token is created based on the ICO and distributed to the investors interested in the project for crypto money. Investors try to profit by involvement in an ICO process. After the completion of the ICO process, you can choose to keep the tokens for the services supported by the platform, or you can take back the amount you paid in digital currency.

Token Swap

Another important definition to know about tokens is token swap. Token swap allows token to be moved to a new blockchain or smart contract. It is also known as token transport. Since tokens are usually created in the Ethereum Blockchain system, developers then carry out token swap transaction to switch to their own algorithms.

With the Token swap, the token is transferred from the Ethereum wallets to the newly created wallet. At this stage, what needs to be done by wallet holders can change. Therefore, you must follow the token that will make the token exchange and the announcements of the stock exchange where you hold your tokens.

Investment information, comments and recommendations contained herein are not included in the scope of investment advisory. Therefore, making an investment decision based solely on the information and comments contained herein may not produce results that are in line with your expectations.