What is a token?

Let's talk about what is TOKEN!!!

A token is not necessarily a currency. In addition, its definition is very abstract and in each case will undergo some contextual changes.

If to reflect, then we have known the tokens for a long time. For example, a token in the metro is also a token, which gives the right to use the services of the metro, simplifies the calculations within the system. The US dollar, until the time when the gold standard and the gold peg were abolished, was also a token, which meant the right to a certain amount of gold.

The term "token" can also be used in the context of authentication, as some identifiers or secrets that are used for electronic authentication are called. A token can be a string or a small device to confirm access to certain systems, information resources, etc.

Let's try to give the most precise and concise definition of the concept of a token as a digital asset.

A token is a unit of accounting that is used to represent a digital balance in a certain asset, and possession of the token is proved using cryptographic mechanisms, for example, an electronic signature.

Such a token, in fact, is an internal unit in some digital accounting system. Interestingly, depending on the situation, the token may have the following properties:

• shares;
• a digital commitment;
• some currency;
  -ownership;
  -the right to a certain service.

Most often, tokens are registered in a database based on blocking technology, and access to them is done through special digital wallets using electronic signature schemes.

Tokens differ from coins of crypto currency in that they can be emitted centrally (under the management of one organization) and decentralized (under the management of a predetermined algorithm). If all the servers are controlled by the same organization, then transaction processing can be performed under the control of one organization.

The procedure for determining the price of tokens can depend not only on the balance of supply and demand, but also on additional factors (binding to an external asset, conditional emission rules or remuneration). In some cases, users need to undergo the KYC procedure in order to be authorized to perform operations with tokens. As you can see, tokens can be either completely independent or completely controlled.

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