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Ethereum Tokens – Introduction
Ethereum is an incredible open- source distribution platform, in which services rendered are incentivized using a token. Ethereum is the first of its kind and it is able to compete with Bitcoin. It offers something different to the cryptocurrency world. It should interest you to know that Ether is the token or unit of currency for the Ethereum platform, but it is not the only token. Ether is the actual cryptocurrency within Ethereum; it is what competes with the Bitcoin, but there are other tokens which reward services rendered within Ethereum.
A token, is simply a unit of value in any platform, an object of reward peculiar to that system. For instance, games reward tokens, which are used to purchase in-game upgrades or services (such as playing the next level). To make this easier, we need to know why Ethereum needs tokens.
Smart contracts, the reason for tokens
Ether and other tokens within the Ethereum platform serve to complete smart contracts. A smart contract is how services are rendered within Ethereum. This platform serves as a medium to satisfy demands, Ethereum is a market for those who can render services and who will be rewarded.
Smart contracts are a self-run set of instructions which determine that an Ethereum transaction, is successful. It is a new technology, for publicly displayed blockchains. When someone desires to enjoy a service, they simply begin a smart contract with one or more persons, which prevents any party in the contract from defrauding or being defrauded. Using the Ethereum smart contract, the need for a third-party negotiator or regulator is completely annihilated.
Smart contracts basically specify the IFTTT logic, which means ‘If This Then That.’ If an Ethereum user wants to get a service, they can only do that by promising the provider of the service that when they do the bidding, they will be rewarded a certain amount, irrevocably. A smart contract is a program that runs as it was made to, hence requires no third- party interference. In addition, this contract is made public to all nodes (computers) on the Ethereum, meaning this new activity is recorded as part of the Ethereum blockchain which is updated on every node. It happens in 3 steps.
- The user gives the token to the service provider, and this move is recorded and updated on every node
- The user selects which specific service is desired by them, and this is also recorded and updated on every node.
- The user gets the exact service desired, the token balances of both the user and the provider of the service, is updated and this is also recorded and updated on every node.
However if a user has already started a smart contract and is unable to finish it due to the insufficient token, the tokens are lost and all progress made, returns to the initial state, because of all steps on the smart contract, are irreversible. Only one object was used, to set the whole process running till the end, which is the token. Several or rather, everything on the Ethereum platform, is regulated by tokens, the most important one being Ether.
What makes good Ethereum tokens?
Different Ethereum tokens are used on every decentralized Ethereum application or decentralized autonomous company. For instance, to use the decentralized app or D-app, you need tokens used by that app, after which you can use the service provided by that app. Also, the decentralized companies can pay with their peculiar tokens, for the services rendered to them and charge the same tokens before they render services.
To be frank, the better the kind of service rendered, the more valuable a token will be, tokens are valuable based on their demand and supply. A token can be exchanged for another; Ether can be exchanged for a token and vice versa.
Top 10 Ethereum Tokens
Here are the top 10 Ethereum tokens that are available.
OmiseGo is an Ethereum-based public financial technology used for mainstream wallets. It has one of the highest market caps among the token platforms. It allows payments to be made in an easy and cheap way, and it offers modern value transfer operations within Ethereum.
Golem was founded by Julian Zawistowski, and it is a network which aims at being the first decentralized supercomputer in the world. If you have a PC which you aren’t currently using, and someone far away seeks to increase their computing power for a task, Golem allows you to lend your computer power to the requestor, for the GNT (Golem Network Token). It has a Token Cap of 1 billion GNT.
Augur was founded by Joey Krug and Jack Peterson, and the token user here is known as REP Ethereum token. It provides market prediction services if you want to know what the markets will be like in the future, as a speculator, you can use Augur. It has many reporters, who report their prediction based on the consideration of many factors. More often than not, they will be correct.
This is a decentralized prediction market platform within Ethereum, which uses “crowd-sourced wisdom” gotten from all over the world. It allows you to earn GNO tokens, for correctly predicting happening in sports, financial markets, politics, weather, and so on. One GNO is valued at 0.6 ETH.
The Dai stable coin system is an autonomous decentralized platform, which uses Dai, one of the best Ethereum tokens. Dai is a cryptocurrency that automatically reacts to changing market conditions to keep itself stable against the major world currencies.
EOS is an infrastructure for decentralized apps; it uses the EOS Token. The price of this token is totally determined by the demand it gets. It is usable, scalable and flexible, supporting thousands of commercial D-apps, parallel execution, and asynchronous communication.
This is a peer-to-peer financial platform, which aims at launching multiple projects all on Ethereum. It uses the WeTrust Token. The demand for this out of the many Ethereum tokens is driven by pure demand for it. It can also be used to raise funds for projects.
This protocol is a blockchain protocol for managing digital assets on the Ethereum platform. Here the users can start up, manage and invest in digital asset management openly. It uses an Ethereum token known as the Melon Token (MLN), and a total of 1,250,000 will be made before the final version is deployed.
This is a secure and decentralized gaming platform that works with Ethereum smart contracts. It is a platform where casino games are played fairly. The token for FunFair is FUN, and it ensures total security with gaming.
MCAP is a token of MCAP labs within the Ethereum platform and uses the ERC 20 protocol for peer to peer transactions. Their mission is to promote development, education, and research and brings financial tools to everyone.