This is a brief study on what are Crypto Tokens & how crypto tokens work.

1. What Are Crypto Tokens &
How CryptoTokens Work?

2. INTRODUCTION
• Crypto tokens are a new way to design open networks that arose from the
cryptocurrency movement that began with the introduction of Bitcoin in 2008 and
accelerated with the introduction of Ethereum in 2014.
• Crypto Tokens are created over an Initial Coin Offering (ICO).
• Tokens are in fact a breakthrough in open network design that enables:
o the creation of open, decentralized networks that combine the best architectural
properties of open and proprietary networks, and
o new ways to incentivize open network participants, including users, developers,
investors, and service providers.
• By enabling the development of new open networks, tokens could help reverse the
centralization of the internet, thereby keeping it accessible, vibrant and fair, and
resulting in greater innovation.
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3. How do Crypto tokens work?
• Each cryptocurrency token embodies a tradable good. This can be for example coins,
points, certificates, in-game items, etc.
• This means that crypto tokens can be used to represent a share in a company or can
be used as central committee voting rights.
• They are often used to raise funds in a crowdsale. That is why many people refer to
them as cryptocurrency assets or crypto assets and crypto equity.
• The developers of a specific digital token can decide to publish their token on
a cryptocurrency exchange.
• This way users are able to buy and sell the token the initial coin offering has finished.
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4. • Tokens created by the Ethereum Code can get frozen in case something happens – a
hack or a government regulation.
• This means that no cryptocurrency tokens are movable until the unfreezing happens.
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5. Conclusion
• Crypto tokens are currently niche and controversial.
• If present trends continue, they will soon be seen as a breakthrough in the design
and development of open networks.
• This is possible by combining the societal benefits of open protocols with the financial
and architectural benefits of proprietary networks.
• They are also an extremely promising development for those hoping to keep the
internet accessible to entrepreneurs, developers, and other independent creators.
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