Editor: Next to Bitcoin, Ethereum is the second most popular cryptocurrency, by market capitalization. Within the last week alone, it’s price has gone from about $90.00 to about $200.00. The post provides some information on Ethereum tokens.
What is an Ethereum token?
Before learning about Ethereum tokens, it is important to first understand the basics of Ethereum. Please see my beginner’s guide to Ethereum for those new to this concept entirely. Ethereum tokens are simply digital assets that are being built on top of the Ethereum blockchain.
They benefit from Ethereum’s existing infrastructure instead of developers having to build an entirely new blockchain. They also strengthen the Ethereum ecosystem by driving demand for ether, the native currency of Ethereum, needed to power the smart contracts. This beginner’s guide should help those who are new to digital assets to understand Ethereum tokens at a high level and how they are different than Ethereum.
Ethereum is a platform that can be used to create any arbitrary smart contract including smart contracts that represent digital assets called Ethereum tokens. This is similar to the App Store providing a platform for iOS apps with some apps issuing their own digital currencies that are used within the game or system. However, with Ethereum there is no centralized entity like Apple that controls what gets added to the App Store. Anyone can create a token on top of Ethereum.
Ethereum tokens can represent anything from a physical object like gold (Digix) to a native currency used to pay transaction fees (Golem). Read the complete article here.