What is the primary function of a token in blockchain technology? 🔊
The primary function of a token in blockchain technology is to represent a unit of value or asset within the blockchain system. Tokens can serve various purposes, including utility tokens that provide access to services or products and security tokens that represent ownership in an asset. They play a crucial role in fostering transactions, enabling smart contracts, and incentivizing participant engagement in decentralized networks. Essentially, tokens facilitate the mechanistic interactions within a blockchain ecosystem, paving the way for innovative applications.
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