Token
Token is niether a digital file nor a physical coin like thing. It refers to the programmable asset and/or access rights that are collectively managed by a network of computers, a blockchain network, or some other distributed ledger.
Distributed ledger
Distributed ledger provides a public infrastructure in the form of a distributed record of transactions that is stored on multiple computers in the network, and it keeps track of which wallet address is the owner of which token.
Token contracts
Token contracts are a type of smart contract. They define a bundle of conditional rights assigned to the token holder. Tokens can represent anything from a store of value to a set of permissions in the physical, digital, and legal world. They allow more transparent, efficient, and fair interactions between market participants, at low cost.
Why is there low cost involved?
Cryptographic tokens on the blockchain have lower issuance and management costs involved. In traditional financial operations require heavy auditing and involvement of human resource. Automated real-time cryptographic proof of oversight can reduce costs of bureaucracy by orders of magnitude; depending on the industry and use case, the exact numbers will vary. As a result, cryptographic tokens can be easily issued and securely traded on a blockchain network, without an intermediary or escrow service.
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Source - Orielly
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