[Translation] Ethereum Token Beginner's Guide ~ What are Ethereum tokens?

Whether good or bad, ICOs are once again popping up in various places; however, the recurring story is that fundraising at the tens of millions to tens of billions level tends to finish within minutes or seconds for Ethereum-based distributed applications, the Dapps ICOs.

From my own participation in 2016, the ICOs I bought into yielded returns like VSL growing 5x, 1ST and SNGLS 17x, NXC 26x, and GNT as high as 65x, all within less than a year, making it seem almost too smooth (compared to the ICOs at the time in USD terms).

Backed by such fever, ICOs still haven’t waned, but as excitement grows, the chances of drawing bad ICOs or not-so-bad-but-dramatically off-base ICOs increase (there seems to be more of that now), so it’s wise to do prior research before participating (nowadays you might be lucky just to have acquired something if you participate, as a joke).

For those who are about to take on Ethereum-based ICOs for the first time, how about reading this translated article first to learn some basics?

Now, please proceed.

Beginner's Guide to Ethereum Tokens — What Are Ethereum Tokens?

Before learning about Ethereum tokens, it is extremely important to understand the basics of Ethereum itself. If you have no idea about Ethereum’s core concepts at all, please readBeginner's Guide to Ethereum(translated)

In simple terms, an Ethereum token is a digital asset built on the Ethereum blockchain. Such assets leverage Ethereum’s existing infrastructure, so developers don’t need to build a new blockchain from scratch. Also, these assets are denominated in Ethereum-specific currency and create demand for ether, the cryptocurrency used to power smart contracts, which enriches the Ethereum ecosystem.

This beginner’s guide is written to lead digital-asset newcomers, help them understand Ethereum tokens thoroughly, and highlight the differences from Ethereum itself.

Comparison with Ethereum

Ethereum is a platform that can be used to create any smart contract, including those representing digital assets called Ethereum tokens. It is similar to how an App Store provides a platform for iOS.

Some applications issue their own digital currencies that can be used within their games or systems. However, unlike Apple in the App Store, there is no centralized organization deciding which tokens appear on Ethereum. Anyone can create a token on Ethereum.