What are Ethereum Tokens?

Question

Being a person who has an interest in knowing details about Cryptocurrencies, basically Ethereum, I would like to know What are Ethereum Tokens in Simple Words?

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Charlie Evans 3 months 1 Answer 39 views 0

Answer ( 1 )

  1. Ethereum is a platform that can be used to create any arbitrary smart contracts including smart contracts that represents digital assets called Ethereum.

    A token within Ethereum, that is not Ether itself, is stored in a smart contract. This all began when someone wrote a smart contract to manage balances. It is literally a mapping of addresses to numbers storing the balance of each address.

    Tokens are value counters in contracts. Standards allow for uniformity between tokens and for wider adoption and use of tokens. There are thousands of token standards, but very few get major adoption.

    There are two main groupings of tokens, fungible and non-fungible.

    Fungible tokens mean that one token is worth any other token, like money, where $1 is always equal to any other $1.

    Non-fungible tokens all have a unique ID. Each NFT has an inherently different value, such as how one artwork would not be equal to any other artwork. NFTs have a unique value depending on what they are for or represent.

    Token standards achieve better interoperability through interfaces. These interfaces allow for exchanges, other tokens and wallets to interact with thousands of tokens through the same interface.

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