2 minutes to understand what tokens are

Tokens and especially NFTs are some of the hot topics of the digital world. Using tokens has been one significant factor for the success of Blockchain technology. TEO-the energy origin explains in 2 minutes what exactly is a token, what kinds of tokens are there, how do they work and what can they be used for. 

1) What is a token  
The most basic definition of a token is that it constitutes a unit of value issued by an organization that can be bought, traded, resold or collected without the need from 3rd party intervention. Tokens are stored on Blockchain in the form of data, therefore, they can’t be duplicated, or transferred twice.  
Tokens can be distinguished into 3 categories:  

Fungible tokens: every fungible token is the same as the next and can be exchanged for any other token of the same type without changing anything. For example, Bitcoin is a fungible token: one Bitcoin has the same value as one other Bitcoin, there is no value distinction between any two. More generally, cryptocurrencies belong to the fungible token category.  

Non fungible tokens or NFTs: one-of-a-kind blockchain-based digital assets, with embedded proof of ownership. It is a digital representation of a real-world tangible or non-tangible item. Because each item has a distinct value based on inherent characteristics like who created it or how rare it is, it means NFTs cannot be interchangeable. For example, an NFT representing music track from the Beatles cannot be exchanged by one of a painting of Van Gogh because it doesn’t have the same value or characteristics.  

Semi fungible tokens or SFTs start off fungible and become non-fungible. Once they’re redeemed, the fungible tokens lose their face value. That loss of exchangeable value makes the expired tokens non-fungible. We can take the example of a voucher that has an expiration date; it can be exchanged with any other identical voucher before the expiration date but once the date is reached, the voucher cannot be exchanged for a valid voucher. 

2) Usage and standards 
Tokenization allows us to value and materialize real assets in the digital world. By inscribing an asset and its rights directly on a token, tokenization facilitates management and exchange with a peer, in an instant and secure manner. 
Tokens and smart contracts are by essence, linked. But because smart contracts have a variety of applications and no rules regarding their construction framework, standards have been developed to make sure the community members can interoperate when using tokens. For fungible assets, the standard ERC20 is the most famous one, for NFTs, it is ERC721. The advantage of setting up standards is to be able to know what you can do and not do with the tokens, to have better control and management for all the tokens of the same kind.  
3) What about TEO? 
In a certain way, TEO-the energy origin is tokenizing energy and related ESG attributes. We materialize real volumes of energy and sustainable impacts, to be bought by a final customer. Thanks to the blockchain technology, the final user knows that volumes and ESG attributes can’t be duplicated and/or transferred twice by the issuer and only them, can claim their ownership  
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