What digital tokens exist
There are 3 types of digital tokens:
- Equity tokens — shares of the company.
- Utility tokens — the same as the internal currency in a computer game.
- Asset-backed tokens — digital commitment. It is possible to compare it with food or cinema voucher.
Only the last type of token is directly provided. Since the guarantor of the token conversion into a service or product is the party that issued it.
Where it is possible to buy a digital token
Coin as well as cryptocurrency, can be bought on the exchanges, in exchange offices or in private transactions. Also, the token is received by ICO participants in return for their investments. In this case, it acts as a share, only in digital form. The token in the future provides its buyers a profit if the company which token was purchased, will not be fake.
The token can be obtained for free. For example, to participate in a bounty company, that is, to contribute to the development of the company through ICO advertising. The reward for the work is the accrual of tokens.
Where to store the digital token
As already mentioned, the token is similar to the cryptocurrency, although it is not. However, the asset storage formats are identical. To do this, specialized secure wallets are used.
There are 2 types of wallets: cold and hot. Each has pros and cons.
- Cold is a specific physical device, something like a safe. Access to it does not require the Internet, operations require a lot of time. However, in the case of a cold wallet, it will be much more difficult for scammers to get access to the tokens stored in it, because it will be necessary to steal the carrier itself.
- Hot — online solution, quick and easy access to assets. But its opening will need only Internet access and skills of hacking.
This is basic information to understand what a digital token is. We will consider it in more detail in next texts.