What is a token?
Tokens are a representation of a particular asset that are tradable from
commodities, loyalty points to cryptocurrencies.
Crypto Tokens represent tradable assets that are found on a blockchain (but they don’t have their own blockchain technology, they are based on other coins blockchain which offers smart contracts i.e. Ethereum, Komodo, Cardano etc.)
Creating Crypto a Token is much easier than creating a Crypto Coin as you don’t have to program them from the scratch or modify any codes. You can use any standard template on the blockchain – for example Ethereum (ETH), Komodo (KMD), Cardano (ADA) and many more, and the functionality of making crypto tokens is done through smart contracts; Programmable computer codes that execute themselves and don’t need any interference of the third party.Tokens are then created and distributed as free airdrops or Initial Coin Offerings
(ICOs), which is a means of crowdfunding, to fund the project development of the crypto token. It is similar to an Initial Public Offering (IPO) for stocks .
Many are crazy over ICOs and Free Airdrops as Airdrops refers to a procedure
through which the crypto currency project distributes free crypto currency to the community and its goal is to spread awareness about its project and get
maximum investors to invest in their project.
ICOs, represents a great way to identify the most valuable projects in the cryptosphere by investing in their project as they can provide great financial returns in short to long term, but you need to be careful while investing in ICOs, as some of them may be wolf in sheep’s clothing. ICOs, do have a great risk to reward ratios.
Fun Fact: First ever ICO ever held for a crypto currency project was Master Coin in 2013. The project raised about 5000 bitcoins back then which was about $5000. Later on, it rebranded itself into OMNI.