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Definition: Ethereum token

A digital asset on the Ethereum blockchain, which is used for smart contracts. Ethereum tokens are purchased using Ether, which is Ethereum's native currency, and the tokens themselves are assets that can be traded. A token can represent almost anything; for example, another cryptocurrency, a physical item in the real world, an IOU, the coins generated in an initial coin offering (ICO) or a non-fungible token (NFT) that represents art or some other 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. Ethereum developers naturally want most digital wallets to handle their tokens. See Ethereum.