TOKENS – What is it and where do they come from

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Cryptocurrency Tokens: What Are They and How Do They Appear?

Both in cryptocurrency and in general, the word “token” has various meanings. Broadly speaking, a token is a digital asset and a so-called supply for something else. With such way of functioning, tokens are used in cryptocurrency in different ways.

This term is used to describe a unit of value, that represents it but isn’t an inherent value itself. As for the cryptocurrencies, tokens serve to create, transfer and store coins, being a type of encryption. Tokens take part in all transactions and operations made by users of specific platforms. They are transferred through the network when money transactions are made and exist as entries on specific coin’s blockchain or ledger.

Sometimes, tokens are assets created on the basis of other platforms. For example, let’s take Ethereum. Ether (ETH) is an original token of Ethereum, while KIN coin is an ERC-20 token created on the Ethereum’s basis. Both ETH and KIN are tokens, but ETH is a native one. In most cases, native tokens have a higher value on the platform than all the others. So, sometimes a word “token” is used to differentiate it from currencies that don’t have their native network or platform (like KIN).

At the same time, a term “token” refers to an encrypted string of information. So generally, it means all those important things in cryptocurrency and has different meanings, depending on the context. In some networks they act as transaction mechanisms, sometimes they represent coins, in other situations they act like stock. In some cases, tokens bring unique functions that cannot be incorporated without them, just like casino chips in poker.

BTC is the first coin and token in the history of cryptocurrency, which serves different aims, most of which are financial. However, most experts say that Bitcoin only has some token elements, while it is not initially tailored to be a tokenized asset. With time, specialized blockchains were created to support tokens, like Ethereum, Waves, NEO, NXT, and Universa.

As a rule, tokens have limitations in terms of supplement and their value may significantly depend on this factor (but it is not always like that). In case of Ether tokens, they are not limited in number and can be mined forever.

So, cryptocurrency tokens are special digital coins that pertain on their blockchains and stand for the valuable assets. For instance, you may receive one token that stands for X sum of points you get for doing something useful for the network/blockchain as a customer. Most platforms provide users with small amounts of their native tokens just for being connected to the network. The reason is that a connection uses your machine’s resources such as memory to support the entire network and allow its correct functioning. When you get tokens for your useful actions, you may get something from the network in turn. For example, if you are an Ethereum network member, you may use your tokens to get an access to the content shared there. As you know, Ethereum has two types of content – free and paid, so your tokens can act as money to pay for the latter one. Another token may represent a crypto coin, like 1 token = 10 LTC on a particular blockchain. These tokens can be traded among the members of the blockchain.

The revolutionary potential of tokens

Ether is a token needed to launch and use other tokens in the blockchain. Therefore, ETH is the most expensive token in its own network. In most cases, the price is determined by demand and purpose. In theory, despite the fact that every technically skilled person can create his own token, but only useful, well-done, and intentioned tokens obtain high value.

Today, tokens are used for a lot of purposes, despite the fact that they are criticized. Some experts say that tokenization leads to failures and flops and many services don’t need them. However, we believe that most blockchain companies do benefit from the tokenized economy.

There are two main problems faced by tokenization today: frequency band and storage. Every element of a computer system, be it a letter or another symbol, needs space. Most blockchains store data in a decentralized way, but considering the fact that a number of members continue to grow, a limitless storage is necessary.

Today, these limitations inspired new developers to create more blockchains. Taking the desired results into account, developers choose the most suitable types of blockchain and improve this technology to meet the goals. The most stable token-based network today is Ethereum and therefore more and more creators choose it as a basis, however, there are no reasons to think that a situation will always be this way.

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Tokenization as a basis for everything

Tokens can be used in various types of online services, from subscriptions to peer-to-peer exchanges. Here are some central issues easily solved by blockchain and tokens:

Decentralization allows every person in the world have an access to the token-based economies. This increases the limits of the possible impact tokens can bring to the society.

Tokens ensure their own security and don’t need any external regulation, therefore law and governmental institutions cannot have ascendency over them.

Average users with medium technical skills can easily grasp the principles of tokens’ work. Also, this way token-based network can provide its own existence by attracting more people and receiving more income for system operations, charging minimal fees for transactions. Moreover, as we have already said, connected and active users help networks function properly.

All types of tokens are designed to facilitate a high number of transactions within a short period of time. For instance, such serious online mechanisms as the Internet-of-Things require millions of computers to process the information about all the transactions. None of the existing payment services, including such giants as Visa and PayPal, can’t handle this. However, the token-based economy has all chances to cope with such volumes.

Final word

So, as you can see, token doesn’t have one concrete definition. It refers to many functions and things at once. Thus, in most cases, tokens don’t have their own value but stand for something else.

Tokens are encrypted and they serve to point to the information or value without containing it. As for the cryptocurrency, tokens are created when people do transactions. In general, coins can be called tokens and there is no essential difference between them. It means that ETH is a native token in the Ethereum network and BTC is a native token in the Bitcoin network. Blockchain transactions are all tokenized.

TOKENS – What is it and where do they come from?

Few people have not heard about bitcoin – the very mega-promoted crypto currency. And now, imagine that tokens are times less popular tokens, which are also cryptocurrency. Here the difference is almost the same as that of the dollar and the Belarusian ruble, where both examples are currencies, but issued by a different issuer. There will be clever people who will object to this and state that this is not the same, because bitcoin is a crypto currency, whereas a token is a digital asset. Yes, yes, yes, but not quite yes .. Crypto currency is the same and is a digital asset, and statements that bitcoin and token are not the same, in general, will not be entirely true.

Where do tokens come from?

The companies issue tokens to attract investments for their development. The process of releasing tokens is called ICO (Initial Coin Offering or “initial coin offer / initial coin placement”). For a better understanding, consider the following example with the already mentioned bitcoin, which comes in the form of reward to the miners. Those, in turn, use computers to perform complex calculations and generate the crypto currency itself through mathematical protocols. The type of cryptocurrency will depend on the type of protocol used. Now let’s imagine that some company created its own protocol, then translates its technique there and starts generating its own crypto currency – that is, those tokens. Therefore, the blockade and ICO are inextricably linked, since the latter is a chain of computers – an analogy of the blockbuster.

Types of tokens

There is no definite classification of tokens at the moment. But still they can be divided by functions, according to the wishes and needs of the company itself, which produces ICO, namely:

– Tokens “tokens” – are the usual speculative currency. The investor buys these tokens with the prospect of earning on the growth of their prices. When the price increases the investor rushes to sell the purchased tokens more expensively and collect the maximum benefit.
– Tokens “shares” – often analogue to traditional shares. Here the company issuer gives the opportunity to their owners to receive income in the form of dividends. In addition, as in the case of stocks, the owner of these tokens can also influence the management decisions of the company itself.
– Tokens “bonds” – they are very similar to the previous ones, but with a small difference. The company that issues such tokens, takes the amounts from their sales as loans. That is, the issuer undertakes to pay interest income on the value of issued tokens to their owners.

However, the US Securities and Exchange Commission (SEC) and the Swiss Financial Market Supervision Service (FINMA) are trying to classify the tokens, which are divided into the following groups:

– “Security tokens according to the SEC” / “Asset tokens according to FINMA” – they give the right to receive basic assets, dividends and interest payments. That is, with economic functionality similar to shares, bonds or derivatives.
– “Service tokens” (Utility tokens according to the SEC and FINMA) – provide access to goods and / or services that the issuer company plans to launch in the future under the project. Moreover, owners of service tokens may also be eligible for a discount / premium access to these products and / or project services.
– “Real Cryptocurrencies according to the SEC” or “payment tokens” (Payment tokens according to FINMA) – are often considered as a means of settlement – a currency instrument and have their own block. Often they are not associated with any other projects and do not have any other functions. By and large, this cryptocurrency should become an analogy to money and gold. It should give its owner the right to buy and sell, as well as perform other financial transactions, which in a similar way gives a cryptocurrency.

Where to get the tokens?

In most cases, companies that simulate their own tokens place their respective purses on their own websites. Everyone can send crypto currency and in this way to get tokens. Also you can find sites with ICO calendars about sales of tokens – for example here: tokenmarket.net/ico-calendar wiserico.com/ www.icoalert.com/ www.investing.com/crypto/ico-calendar and many others).
More tokens can be easily and quickly purchased at crypto-exchange exchanges, for example, poloniex.com/ exmo.me/ or bittrex.com/, etc. To begin with, you will need to register and make a contribution to the trading account you open, a certain amount of cryptonet. After that you can get the necessary tokens.

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Can a token come back with undying?

Asked by neozzero 8 years ago

neozzero says. #1

Февраль 6, 2020 7:07 п.п. 1

hunter9000 says. Accepted answer #2

No, tokens cease to exist when state based actions are checked. It would trigger undying when it left the battlefield for the graveyard, but then before undying resolved, it would cease to exist. Then undying has no creature to return to the battlefield when it resolves, so nothing happens. See 110.5f

Февраль 6, 2020 7:25 п.п. 1

M a g n o r C r i o l says. #3

hunter9000 is correct. Additionally, Mikaeus’s ability doesn’t interact at all with Undying Evil .

This is because Undying is a triggered ability, which means that when a creature with Undying dies, a trigger gets put on the stack as described above.

When the first trigger resolves, it will return the creature to the battlefield, and then when the second trigger tries to resolve, it won’t be able to find the creature and won’t return anything (again, as described above).

Февраль 6, 2020 9:25 п.п. 1

M a g n o r C r i o l says. #4

Er. Forgot a step. The scenario I described above is what happens if you cast Undying Evil on a creature when Mikaeus is out (or if you just have a creature with natural Undying out there with Mikaeus). The creature has two separate instances of Undying, which is why there’s two separate triggers.

Февраль 6, 2020 9:27 п.п. 1

caboose says. #5

I really do not like the current rulings on this Undying ability.

There are still abilities / ruling text that is distinctively different.

For example Goblin Sharpshooter has “when a creature is put into the graveyard”.

What I am trying to get at is that Tokens die. and the ability specifically says “when the creature dies” not “when the creature enters the graveyard if id had no +1/+1 counters on it return it from the graveyard to the battlefield”.

I really think Tokens should be effected by undying.

Февраль 15, 2020 4:30 п.п. 1

hunter9000 says. #6

I’m not exactly sure what you’re saying, but I’ll take a crack at it.

The word “dies” means exactly “is put into a graveyard from the battlefield” See 700.6. So there’s no difference between undying’s trigger and the goblin’s trigger.

And you’re right that tokens do die. It’s just that before they get a chance to come out of the graveyard, they cease to exist. See 704.5d. So there’s nothing to return to the battlefield. This is just like if you used Thraben Heretic ‘s ability to exile a creature card from a graveyard before it comes back from undying. Before the triggered ability resolves, the creature is gone, so nothing happens.

Февраль 15, 2020 6:43 п.п. 1

Rhagnarox says. #7

@caboose – Sadly, the death of a token means ‘leaves the game’ (as a state-based action). As a technicality, token never enter any graveyard. They are not allowed there by the nature of what it is to be a token. For a token to come to or leave from the battlefield is to create them from nothing and return them to nothing. This is different from an exile.

Август 15, 2020 5:49 п.п. 1

M a g n o r C r i o l says. #8

Rhagnarox – First off, necroposting. Second off, you’re not correct. Tokens do enter the graveyard, and for that matter any other zone they’re sent to from the battlefield. It’s when SBAs are checked immediately after they do so that they cease to exist.

Rule 704.5d – “If a token is phased out, or is in a zone other than the battlefield, it ceases to exist.”

That’s a state based action, taken from the list of SBAs (which is what rule 704.5 is). That’s what makes tokens cease to exist, and that couldn’t function if tokens didn’t hit the graveyard at all in the first place.

In addition, tokens do trigger effects that care about “when a permanent is put into a graveyard from the battlefield” or “when a creature dies” and the like, which again couldn’t trigger if they didn’t hit the graveyard at all.

The span of time that they’re in the yard is so short that for many intents and purposes they might as well cease to exist between the field and the yard, but it’s an important distinction that they do, in fact, hit the yard before the state-based action robots come by and clean them up.

Август 17, 2020 6:05 п.п. 1

Rhagnarox says. #9

M a g n o r C r i o l , my apologies because after my post is when I noticed the OP timestamp. I will pay attention next time.

However, I do not think I am incorrect in what I said, and especially the first part of what you said is exactly incorrect (110.5g – Any token leaving the battlefield may not enter another zone). 704.5d works in conjunction with 110.5f/g wherein any action which targets a token and would cause it to change zones instead causes that token to ‘cease to exist’ and it is removed from play the next time SBAs are checked. Ex: Fiend Hunter targets a token on the battlefield, instead that token may not change zones (from battlefield to temporary exile, contingent upon Fiend Hunter leaving the battlefield). What really happens is the token ceases to exist, it never enters any other zone, and state-based actions remove that token from the game.

If there is anything that I may have missed, or something that I may have misinterpreted, please feel free to let me know. I do not think I am wrong about the tokens, but I am open to have my mind changed in light of new evidence or information you would have. By the way, it did take me a short while to find 110.5g to refresh my memory; I had only remembered reading about it from years ago. So thank you for prompting my additional research as I should have found it initially and cited the rule in my first post.

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