Technical Definition

Token

An asset created by a smart contract on an existing blockchain rather than being that blockchain's native currency.

By Crypto University Editorial
BlockchainTransactionWallet

✦ Key Insight

Almost everything you trade outside the majors is a token, and its value depends entirely on the contract and team behind it, not on the chain hosting it.

✕ Common Misconceptions

Trading by ticker instead of contract address. Anyone can deploy a token called "USDC"; only the real contract address is the real asset.

Detailed Explanation

Tokens are entries inside a contract that the chain hosts. Launching one requires no new network, which is why there are millions of them. A token can represent a governance right, a stablecoin, a reward, or nothing at all.

In Practice

“USDC on Ethereum is a token. ETH itself is not — it is the chain's native coin.”

Dig Deeper

Wallet

Software or hardware that stores your private keys and lets you sign transactions.

Token

An asset created by a smart contract on an existing blockchain rather than being that blockchain's native currency.

Blockchain

A shared, append-only record of transactions maintained by many independent computers at once.

Transaction

A blockchain transaction is a signed or authorized instruction that changes blockchain state or transfers value when accepted by the network.