33 lines
3.0 KiB
Plaintext
33 lines
3.0 KiB
Plaintext
= Tokens
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Ah, the "token": blockchain's most powerful and most misunderstood tool.
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A token is a _representation of something in the blockchain_. This something can be money, time, services, shares in a company, a virtual pet, anything. By representing things as tokens, we can allow smart contracts to interact with them, exchange them, create or destroy them.
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[[but_first_coffee_a_primer_on_token_contracts]]
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== But First, [strikethrough]#Coffee# a Primer on Token Contracts
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Much of the confusion surrounding tokens comes from two concepts getting mixed up: _token contracts_ and the actual _tokens_.
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A _token contract_ is simply an Ethereum smart contract. "Sending tokens" actually means "calling a method on a smart contract that someone wrote and deployed". At the end of the day, a token contract is not much more a mapping of addresses to balances, plus some methods to add and subtract from those balances.
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It is these balances that represent the _tokens_ themselves. Someone "has tokens" when their balance in the token contract is non-zero. That's it! These balances could be considered money, experience points in a game, deeds of ownership, or voting rights, and each of these tokens would be stored in different token contracts.
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[[different-kinds-of-tokens]]
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== Different Kinds of Tokens
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Note that there's a big difference between having two voting rights and two deeds of ownership: each vote is equal to all others, but houses usually are not! This is called https://en.wikipedia.org/wiki/Fungibility[fungibility]. _Fungible goods_ are equivalent and interchangeable, like Ether, fiat currencies, and voting rights. _Non-fungible_ goods are unique and distinct, like deeds of ownership, or collectibles.
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In a nutshell, when dealing with non-fungibles (like your house) you care about _which ones_ you have, while in fungible assets (like your bank account statement) what matters is _how much_ you have.
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== Standards
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Even though the concept of a token is simple, they have a variety of complexities in the implementation. Because everything in Ethereum is just a smart contract, and there are no rules about what smart contracts have to do, the community has developed a variety of *standards* (called EIPs or ERCs) for documenting how a contract can interoperate with other contracts.
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You've probably heard of the ERC20 or ERC721 token standards, and that's why you're here. Head to our specialized guides to learn more about these:
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* xref:erc20.adoc[ERC20]: the most widespread token standard for fungible assets, albeit somewhat limited by its simplicity.
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* xref:erc721.adoc[ERC721]: the de-facto solution for non-fungible tokens, often used for collectibles and games.
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* xref:erc777.adoc[ERC777]: a richer standard for fungible tokens, enabling new use cases and building on past learnings. Backwards compatible with ERC20.
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* xref:erc1155.adoc[ERC1155]: a novel standard for multi-tokens, allowing for a single contract to represent multiple fungible and non-fungible tokens, along with batched operations for increased gas efficiency.
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