Many people can distinguish a cryptocurrency from fiat money, however, not everyone has ever heard about a token and can easily say what the token’s features are and how it differs from the cryptocurrency.

There is not a common definition, but we can consider the token as an accounting unit which is used to form a digital balance in some assets. Its accounting is maintained in the database housed by blockchain technology, and the access to them can be obtained through special applications using an electronic signature.

The most widespread platforms for issuing tokens are Waves and Ethereum. The all.me project attracts funds by crowdfunding, issuing its own ME token, which corresponds to the ERC20 standard and is standard for smart-contracts using tokens.

The ERC20 standard is a set of functions that developers shall use in their tokens in order to make them compatible with ERC20. Though it is not a compulsory rule, many developers of decentralized applications are recommended to follow this standard in order to facilitate the interaction of the token with external services.

The ERC20 tokens were well-supported, that is why a majority of the Ethereum projects, launching its ICO, uses tokens based on this standard.

How does the token differs from the cryptocurrency?

- its price is not only demand- or supply-driven, but may also depend on the external assets support and different emission rules.

- tokens emission made by its initiator (a physical or legal person) may be centralized or decentralized according to a predetermined algorythm.

- transactions processing and accepting can be centrally provided under one organization control.

- the token doesn’t have its own blockchain system.

On this basis, we can say that a cryptocurrency token is always secondary in relation to the cryptocurrency, being in some sense its derivative.

Nowadays there is not a clear established tokens classification:

1. Asset-backed tokens

These are tokens, the issuer of which sets the asset associated with the issued tokens. That way, one token may be equal to a share in some property (for example, in 1 square meter of the room) or in performance of some services. At the same time, the organization itself, carrying out services or owning the property associated with the token, takes responsibility for tokens conversion.

2. Equity tokens

This kind of tokens certifies the right of its owner to obtain a share in the issuing company which in many cases is represented by decentralized autonomous organizations. Owners of such tokens can receive dividends and participate in the company’s decision-making process (for example, in voting on the investment issues) by analogy with shareholders.

3. Utility tokens

They reflect some value within an online business model platform or a project (e.g. reputation, ability to activate additional services, etc.)

Where can I keep my tokens?

Tokens storage and transfer is equal to the same cryptocurrency processes. For this, you can use special applications, acting as wallets, which store and process the keys, and also make and sign the transactions. As a rule, these applications are contained in the tokenization platform infrastructure. In case of ME tokens issued in all.me project, you can keep them safe in the wallet integrated into each user’s account.

What are the advantages of tokenization?

- It increases the storage and transfer security level by accounting transactions based on the blockchain technology. ME token is decentralized which means it can never disappear because all.me transfers tokens to the real wallets, proving the existence of its currency in blockchain technology.

- It makes the confidence between the parties and the involvement of various mediators are unnecessary, because their participation can be proved at the smart contract level, which, in turn, regulates the relationship without any delays or different interpretations.

- It accelerates the trading, because there is no need for moving real assets and drawing up the property documents.