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In cryptocurrency:
The term token is used in a very general sense to describe any digital asset (where Bitcoin is a “cryptocurrency token” and Ether is a “cryptocurrency token”… but even cryptos not meant to be used as money, like the collectable CryptoKitties, still exist as tokens).
The term token is used to describe a unit of value (I have X Bitcoin tokens). Here it refers to the fact that cryptocurrencies, like the U.S. dollar, are value tokens / currency tokens / token money (they represent value, but aren’t themselves of any inherent value)
The term token refers to the fact that the creation, transfer, and storage of cryptocurrencies use strings of numbers and letters called tokens (tokenization is a type of encryption). In cryptocurrency transactions, tokens are created and sent through the internet when transactions are created and exist as entries on a given coin’s blockchain / ledger.
Meanwhile, sometimes when people say “token” they are specifically referring to digital assets that are built on another cryptocurrency’s platform like Ethereum’s ERC-20 tokens, ERC-223, ERC-721, and ERC-777 tokens. The native token on the Ethereum platform is Ether, 0x for example is a ERC-20 token created from the 0x ICO. Both Ether and 0x are cryptocurrencies (AKA tokens) on the Ethereum network, but one might refer to 0x as “a token” to differentiate it from the native cryptocurrency on a platform / network / blockchain.
Token can also be used to describe “utility tokens” which are strings of data that can be used for specific functions in specific systems (such as a token that lets you access a certain amount of cloud storage).
Token can also be used to describe “security tokens” which are strings of numbers and letters used in computer security (encrypted strings of numbers and letters). TIP: Security tokens used in computer security should to be confused with an Ethereum-based ICO tokens that might be considered financial securities in the eyes of the SEC.
Do not take anything written here as investment advice.
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