Introduction to Tokens
Tokens are a type of digital currency created through code, operating autonomously outside of traditional banking and government systems. Tokens use cryptographic technology to secure transactions and define the creation of other units.
Features
- Decentralization: Tokens are not controlled by governments or central authorities; they transact through peer-to-peer internet protocols.
- Security: Tokens use cryptographic techniques to protect transaction security.
- Limited Supply: The production process of most tokens is slow, and the number of currency units that can circulate is limited.
- Distributed Public Ledger: Tokens are controlled through a blockchain transaction database.
Examples
- Bitcoin: The original and most well-known token, created by Satoshi Nakamoto in 2009.
- Ethereum: Another popular token, with an issuance cap of 18 million coins per year.
Uses
- Online Transactions: Tokens are designed to provide a new payment method for online transactions.
- Investment: Tokens can be bought, sold, and traded like other financial assets.
Notes
- Price Volatility: Tokens exhibit significant price fluctuations and are currently not suitable as a payment method.
- Acceptance: Tokens have not yet been widely accepted by businesses and consumers.
