I tried to explain what Token is in comic strips.
I explained what the token is and how the comic can present the idea in such a way.
The idea of a token is similar to cryptocurrency or cryptoasset. Only the difference is that the token refers to Bitcoin and Ethereum. They are more toward cryptocurrency that particularly runs on the top of the Ethereum blockchain. Altcoin and token may be interchangeable depending on if such asset has its own blockchain system. More specifically, a token is a crypto asset that runs on top of another cryptocurrency’s blockchain.
Initial Coin Offering is similar to IPO or Initial Public Offering. It was a way to fund project development. However, it got too much FOMO within the price shoot up in cryptocurrency in 2017, and scammers were taking advantage of people and taking away funds after their investments.
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Of course, regulations eventually came down to cooling the market. With more restricted rules, ICO was harder to implement and there are processes to follow before any ICOs. Investors were protected but the progress was halted.
What Are Missing
A token often serves as the transaction unit on the blockchain to create an effort for participants to process and make sure the blockchain is efficient. They are widely implemented in DeFi or Decentralized Finance as the native currency to fuel the financial system without relying on third-party oversight. Each token’s valuation ties into the entire system. The valuation of the token then can gauge how successful the system is and how popular the system can attract more users.
No to mention that scams are also coming with tokens. Those unknown tokens with unknown creators have intentionally scammed away people’s investments. While blockchain technology continues evolving, there is a need for a way to protect users from scams.
A token is a transaction unit that runs on top of the existing blockchain to help each transaction run in an efficient way.