Section 5 // ●●●●○ Level: Medium Quick Links: 2: Blockchain | 3: Smart contracts | 4: Wallets | Dashboard: Web3 Starter Pack |

<aside> 🥡 KEY TAKEAWAY Tokens are digital assets. A piece of code that lives on blockchain and serves a particular purpose.

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What are tokens?

Tokens are digital assets and can be used in various ways. Tokens are decentralized, act as a medium of exchange and use cryptographic signatures in order to be secured and record-kept.

What’s a purpose of a token?

One token’s purpose can be anything from raising money, enabling products or services, buy and sell digital artworks and others. They represent almost any known asset in a digitized form and are able to log all transactions involving that particular asset on the blockchain. In other words, it is a new and important way of recording ownership and creating transparency.

<aside> 🔒 Crypto tokens are not an in-built part of the blockchain and their behavior is regulated by smart contracts = they can represent any asset of value. Cryptocurrencies are an in-built part of the blockchain itself = digital representation of a currency.

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What are some types of tokens? Click to read more👇

• Utility token
• Security token
• Commodity token
• Reward token
• Non-fungible token
• Asset token
• Currency token
• Social token
• Governance token

What is an airdrop?

<aside> 💡 Airdrop is a distribution of tokens, NFTS or cryptocurrencies for free.

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