What is a token?

Token (coin) is the digital currency of each specific ICO project, which is issued to investors in exchange for a crypto currency or fiat money. This “coin” is an asset that you can trade on exchanges. The cost per unit can increase against the backdrop of success in the development of the project.

What determines the cost and volumes of tokens?

The cost and number of tokens is determined by the initial estimate of the amount of investment that wants to attract a start-up to the ICO. For example, developers need $ 10 million for a start and development through Ethereum (ETH). They issue 1 billion tokens at a price of 0.01 ETH per token. During all rounds, there is a perspective to attract Ethereum to satisfy the request for the maximum amount of investment. All remaining tokens will be destroyed, that will increase the price of the rest one.

The standards of tokens

The standardization of tokens can be compared with the license that gets each script, which is issued over the blockchain on a certain platform. This status gives the token a value and the right to use it in trading on various exchanges. One of the most important standards, ERC-20, has been further developed by the Ethereum network and ensures that all tokens produced correspond to the complete list of requirements and work correctly throughout the ecosystem.

In the future, new standards will begin to appear, they are called upon to correct all the main shortcomings of the existing ones. For example, ERC223, which will block random transactions on random contracts. Another example is ERC-721, the standard of non-fungible tokens, which are used in crypto-collectibles and crypto-games.

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