## Ethereum Tokens
Ethereum tokens are digital assets that can be used as a medium of exchange on the Ethereum blockchain. They represent ownership in an asset or service and facilitate transactions between users within the network. Tokens also serve to incentivize participants for performing certain tasks, such as validating transactions, contributing resources or providing services to others. There are two main types of token standards: ERC-20 and ERC-721.
### What is an ERC-20 Token?
ERC stands for “Ethereum Request for Comment”, which is a protocol created by developers on the Ethereum platform to standardize contracts that issue tokens. The most common type of smart contract built using this framework is known as an “ERC-20” token, which represents fungible assets like currencies, commodities or utility tokens (utility tokens being digital representations of goods and services). These tokens must adhere to specific rules outlined by the protocol in order to be compatible with other contracts deployed onto the same chain; they must have functions defined that allow them to transfer value from one person’s wallet address to another’s while keeping track of who owns how much at any given time–this enables trustless trading without having trusted third parties involved in every transaction made with these assets.
In more simple terms, it’s just a way for people all over world use cryptocurrency directly instead through banks or government entities – you could think about it sorta like PayPal but decentralized! It also makes things easier when launching Initial Coin Offerings (ICOs) since developers don’t need write their own code from scratch each time – rather they can simply use what already exists thanks these prebuilt templates called “smart contracts” found inside many popular platforms today including those running off ethereum networks too!
### What is an ERC721 Token?
An ERC 721 token is a nonfungible asset – meaning no two are alike -and often take form virtual collectibles such as CryptoKitties™️or Gods Unchained cards™️ . Nonfungible items usually contain metadata attached describing its origin/creator etc., so there may even be some scarcity associated if say only 1000 exist unlike coins where there will always remain plenty available regardless demand level going up down however high low respectively speaking here still though despite differences both protocols provide basic functionality needed enable transfers money securely across distributed ledger system based upon predetermined conditions agreed beforehand all parties involved process transaction accordingly afterwards thus allowing everyone participating benefit anytime anywhere day night 24 hours seven days week year round without fail again depending circumstances course…
