A token is a standard unit of measure issued for an ICO asset. All ICOs issue a unique digital asset (tokens), which investors receive in exchange for their cash or cryptocurrency investments. In fact, people buy virtual tokens to receive internal company services or for later exchange at a more attractive rate.
Thus, a token is a product or service, a benefit that a company offers after ICO. In some cases, this asset may become a cryptocurrency, if that was the original purpose of the primary placement of coins. However, in essence, this is a difference between a token and digital coins. The coin is cryptocurrency and cannot perform a different role, except as a means of payment. The role of the token is much broader. It can act as a virtual currency, as the right to unique content or service of a company, or perform another symbolic, but similar function.
The difference between a token and cryptocurrency
Cryptocurrency is a virtual currency that is protected by cryptography and is based on blockchain technology. Cryptocurrency can be mined using special technological equipment. People who focus on mining are called miners. That is, miners, roughly speaking, release cryptocurrency. In general and in general - this is a digital analog of money.
A token is a virtual unit of expression of value, a medium of exchange for goods or services and obligations in a digital format. It is also based on the blockchain technology, but it cannot be mined.
A token does not have its own blockchain and can be issued centrally and decentralized. The value of tokens depends on the market value, but the pricing is influenced not only by the balance of supply and demand but also by binding to a particular asset.
The similarity of cryptocurrencies and tokens in that both can be used as a digital currency. The methods for transferring and storing tokens are almost identical to the transfer and storage of cryptocurrency coins. However, as a rule, wallet applications are on the platform that conducted the ICO. Cryptocurrency can be stored in independent wallets of different projects and companies.
Let’s take into account tokens of Open Packaging Network. It is the open source platform, a decentralized ecosystem for high growth packaging industry participants and related services. The platform uses the OPN token. It is the official currency for buying and selling and has a shared stake. Customers will be able to use their OPK token as collateral to secure loans for their business.