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Definition: Ethereum token

A representation of almost anything on the Ethereum blockchain. Managed by a smart contract, a token can represent a cryptocurrency (other than Ethereum's own Ether), a physical item in the real world, an IOU, access rights, an identity, a certification or a collectible (see non-fungible token).

ERC-20 (Ethereum Request for Comments-20) are the rules for developing Ethereum tokens. Ethereum initial coin offerings (ICOs) are generally ERC-20 compliant because most digital wallets that support Ethereum's Ether also support ERC-20. Cryptocurrency creators naturally want most digital wallets to handle their tokens.

Token Types
Following is a summary of token types, which applies equally to Ethereum and non-Ethereum blockchains. See Ethereum.

Currency Token
A cryptocurrency with value determined via private trade.

Resource Token
A resource earned or produced such as a storage or CPU token representing resources in a network.

Asset Token
A representation of an asset such as gold, real estate, a car or amount of energy.

Access Token
Grant access to a digital or physical property, such as a forum, website or hotel room.

Equity Token
Shareholder equity in a digital organization; for example, a DAO or corporation. See DAO.

Voting Token
Voting rights in a digital or legal system.

Collectible Token
A digital collectible. See non-fungible token.

Identity Token
An avatar or legal identity such as a national ID.

Attestation Token
Certification by an authority such as a birth certificate or college degree.

Utility Token
Access or pay for a service.

Excerpted from This Excellent Book
The token explanations above were taken from this book and abbreviated. "Mastering Ethereum" is a must-read for every future Ethereum developer. As blockchains are a dynamic subject, terms are used interchangeably, and any particular type of token may be called by several names as well as represent several of these functions.