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Definition: crypto token


A representation of a digital or physical asset on a blockchain. Native tokens are the native currency on a blockchain. For example, BTC is the native crypto, or native currency, on Bitcoin, and ETH is the native crypto on Ethereum. There are other native cryptos, such as SOL on the Solana blockchain and ADA on the Cardano chain. See native cryptocurrency.

Fungible Tokens
BTC, ETH, SOL and ADA are examples of fungible tokens, because like a dollar bill, each token has the same value as any other. Fungible tokens can be issued for governance, where users have some say in the project based on the quantity of tokens they hold.

Thousands of non-native crypto tokens have been launched on Ethereum, each representing some project that its creator claims will be a huge success. Unfortunately, the vast majority are either worthless or scams. Visit the CryptoCompare.com website for the latest compilation. See Ethereum and exit scam.

Non-Fungible Tokens (NFTs)
Non-fungible tokens certify a unique object, which can be anything. For example, an NFT can certify ownership of art, a collectible or a property in a game or virtual world. NFTs can also certify ownership of one-of-a-kind objects in the real world. See NFT.

Why Not Make Money Out of Thin Air?
People argue that high-frequency trading is just a computer that "legally" makes money all day long by buying a stock on one exchange and selling it on another a fraction of a second later. Traders make a fortune out of thin air so why not make a fortune out of crypto. Futurists think today's economic systems will someday be archaic in a world where technology replaces more and more human workers. Because cryptocurrencies added two trillion dollars' worth of wealth to the world in a decade, the argument is "what's wrong with systems that make money for everyone." See Ethereum token and tokenomics.