A token is no longer money, but it is not yet a cryptocurrency

17.08.2022 |

For article about tokens

Tokens are usually put on a par with classic cryptocurrencies. However, it cannot be said that this type of digital asset is a crypt in the classical sense. In order to understand the difference between these two tools, it is necessary to figure out which forms of tokens are the most popular of the existing ones.

We have already considered the use of blockchain in projects other than cryptocurrencies, however, tokens cannot exist in isolation from the latter. Some even tend to consider the parent coins themselves as application tokens. So Ethereum this is both a decentralized network for creating applications and smart contracts, and a cryptocurrency of the same name, which is used for payment within the network. However, we will consider tokens in their first incarnation, when the parent coin has practically no influence on the value of the digital asset itself.

Secured tokens

In the context of secured tokens, it is most often taken to mean stablecoins linked to a specific national currency or gold. However, the field for securing is much larger.

The first thing that can be called a secured token is tokenized shares of companies. There may be not only physically existing enterprises, but also various decentralized systems. As a rule, the cost of such tokens is set outside the cryptocurrency communities, more precisely, the impact of events in the cryptosystem has the least impact on the quotes of digitized shares.

Classical exchange instruments can also act as collateral. For example, futures, or rather supply contracts, can also be digitized on the blockchain. This is what Norilsk Nickel did, which created separate contracts for the supply of nickel and a whole basket of metals for the production of batteries.

Token of payment for valuables

Such tokens include, for example, coins of various decentralized file systems running on existing blockchains. So, in order to write information to the blockchain, it is necessary to pay a certain amount, which can be expressed both in the parent coin of the network and in a special token, which allows you to make the cost of storage independent of the state of affairs in the cryptocurrency markets.

Decision-making tokens

This type of tokens can be compared with voting shares of companies. So most decentralized ecosystems have several tokens on their site. The right to make a decision on a particular issue for the further development of the network can be quite expensive, so the price on exchanges of this type of digital assets is formed to a greater extent from interest in this or that idea of the embodiment of a decentralized society.

The Future of Tokens and Cryptocurrencies

We have considered only the basic tokens. Their classification is quite complicated, and all other digital assets can be attributed to one degree or another to the three described above. Separately, we can single out the previously considered non-interchangeable tokens, which can, albeit with a stretch, be attributed to secured tokens, because each of the coins has some intellectual value.

Such a number of tokens allowed creating large ecosystems and developing the decentralized finance sector, for which many see the future of financial systems. Although, in fairness, it is worth saying that the adoption of new economic models will not be able to happen quickly, although classical cryptocurrencies have shown the opposite example, but maybe this is just an exception confirming the rule.