Token creation on a blockchain. Cryptocurrency vs. Token11 Nov 2021
Among many blockchain adoption cases, there comes a time when it makes sense to consider the creation of a token. Many enterprises integration the tokens and into their blockchain for many different purposes. For example, cases of CBDC (central bank digital currency) creation and implementation of banks and traditional financial systems require not only custom blockchain development, but the full process of creating a digital stable coin as a currency.
This example is a good fit for imagining the cases of payment token development for blockchain solutions. However, inherently cryptocurrencies and tokens (except payment tokens) have fundamental differences in their meaning. So they are not the same thing.
🔒 Cryptocurrencies VS. Tokens
Where the difference comes from? Initially, cryptocurrency is representing only a payment function (the same goes for payment tokens) or its equivalent to fiat money (as USDT stable coin is pegged to USD currency). Cryptocurrencies (including altcoins and payment tokens) are always existing on their native blockchain. For example, Bitcoin had been created only for purposes of being a cryptocurrency. It is not possible to create any tokens on the Bitcoins blockchain due to the way how it was built. All the other altcoin blockchains, however, allow creating not only a coin but also a lot of tokens with different purposes.
Tokens instead can serve a variety of purposes on a blockchain independently, as well with the help of smart contracts. And the main thing is that tokens are non-native blockchain digital assets, which means that tokens are initiated by blockchain ecosystems or platforms that integrate those tokens on the top of a platform.
Tokens are using different standards, that determine their functions and which blockchain they are operating on.
Tokens break down into two separate things, non-fungible and fungible tokens. We an example of NFTs, non-fungibility can be simply explained by the value that they create. And this value is never equally spread, due to non-fungible tokens inherent in being non-replaceable and unique when representing a piece of one-of-a-kind distinguishable value.
⛓ What is token creation on a blockchain?
Depending on a blockchain adoption case the purposes of a token creation are different from one another. Most of the enterprises, that are actively using the benefits of blockchain technology do not have a token creation on their blockchain. For example, platforms like Corda or TradeLens that are actively operating for Maersk supply-chain purposes don`t have any tokens on their blockchain.
However, most blockchain projects are needing tokens to power the blockchain and manage ownership rights (like with NFTs), vote on decisions (like DAOs do), tokenization, and assets trading (what we have in DeFi and asset tokenization platforms).
Projects like a crowdsale and token sale (ICO, ITO, etc.), NFT Collectible, Payment systems, tokenization platforms, DEXes and DAOs, and many others.
🎯 Our cases of token development
We have the case study of creating a native coin for Ducatus blockchain that we developed too. We were engaged in building separate independent blockchains for DUC and DUCX.
And also, we’ve been proudly developing the Ducatus Wallet that supports a variety of unique functions. Read more here.
Furthermore, we recommend you read about our case study of DeFi token development, to understand the necessity of tokens for DeFi projects.
For now, we suggest you get familiar with the case study of creating a token like safemoon here. And creating a hyper deflationary token too.
Stay rolled on to the updates, because we are going to unfold all the types of tokens soon in future articles!
Rock’n’Block’s team is not limited only by the development of Crowdsale packs and platforms. We can help with:
⚡️NFT and NFT Marketplaces development ;
⚡️NFT 10K generator;
⚡️Any other custom request from a crypto wallet development to custom blockchain development.
If you’re interested in building your blockchain project, feel free to contact our team via the Telegram channel or book a call via Calendly.
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