What are crypto tokens?

1 Crypto tokens are a type of cryptocurrency that represents an asset or specific use and resides on their blockchain. 2 Tokens can be used for investment purposes, to store value, or to make purchases. 3 Cryptocurrencies are digital currencies used to facilitate transactions (making and receiving payments) along the blockchain. More items...

Are crypto tokens native to the blockchain?

On the other hand, tokens are not native to the blockchain they’re operating on. For example, many of today’s most widely used crypto tokens are run and exchanged on the Ethereum blockchain. Examples include Tether, which is intended to mirror the value of the US dollar, and Uniswap, a protocol used to trade different cryptocurrencies.

What are cryptocurrencies called?

As you learn about crypto, you'll notice that there are different terms used to talk about cryptocurrencies. Sometimes they're called tokens. Other times they're called coins or occasionally altcoins.

How do cryptocurrencies work?

Unlike traditional money, cryptocurrencies aren’t managed by government institutions. All transactions involving particular cryptocurrencies get logged onto a centralized blockchain, a ledger that facilitates movements between secure addresses. Coins and tokens are both digital assets used to transact on the blockchain.