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Tokens differ from cryptocurrency and altcoins in several ways. First, tokens do not have their own blockchain. Tokens are issued via, for example, an ICO or an Airdrop on a blockchain of other coins (such as that of Ethereum). In addition, tokens often also represent a product, title deed or part of a company.
Tokens often have to meet certain blockchain standards. The most utilized blockchain standards are the ERC-20 (Ethereum Request for Comment) token standard used by the Ethereum blockchain and the BEP-20 (Binance Evolution Proposal) standard used by the Binance Smart Chain. These token standards are aimed at establishing conventions that make it easier for applications and smart contracts to communicate with each other.
There are currently five different token types, with each token type having its own utilization. The five token types are:
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