Token
A token is a digital unit on a blockchain that stands for something: money, a right, a share or access.
Explained simply
In everyday speech "coin" and "token" get mixed up. More precisely: a coin is a blockchain's own currency (Bitcoin on the Bitcoin blockchain, Ether on Ethereum). A token is created on an existing blockchain and uses its infrastructure.
What a token means is defined by its issuer: it can represent a US dollar (stablecoin), a fund unit (security token), a right of use (utility token) or a single object (NFT).
Technically a token is an entry in a smart contract that records who owns how many units.
From the familiar world
A voucher, a share certificate, an admission ticket and a locker token at the pool are all "tokens" in the broader sense: a piece of paper or plastic stands for a value or a right. On the blockchain it is a digital entry doing the same job.
An example
An issuer creates 1 million tokens, each representing a bond of 100 euros. The tokens can be transferred in seconds, and the blockchain keeps the register of holders.
Why it matters
"Token" is the word that connects tokenisation, digital securities and stablecoins. If you can explain that a token is simply a digital placeholder for a value, you are halfway to explaining tokenisation.
To pass on
„A token is a digital placeholder on the blockchain: it can stand for a euro, a fund unit or an admission ticket.“
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