Token is a financial asset, an asset that has a market value, which can be an object, a contract, a currency or even a property. Virtually almost anything can be tokenized, gaining a representation of its value digitally. The token is a crypto active that needs a platform to be used. Cryptocurrencies, on the other hand are digital currencies classified as a type of financial asset, which uses cryptography and each has its own blockchain (network in which data relating to currency users' movements circulate).

While both require encryption to be used, there are several types of encryption. Cryptocurrencies are built on their own blockchain, while tokens are built on the basis of another blockchain, such as Ethereum or Neo.

The big difference between token and cryptocurrency is that cryptocurrencies are used as the fiat currencies that came to revolutionize the way in which goods and services are acquired, but they are decentralized, while tokens work as a kind of contract. A token, for example, can represent x cryptocurrencies. We have tokens for: security, equity, utility and payment.

The most important thing about cryptocurrencies is that they are decentralized digital currencies, that is, they are not controlled and regulated by any central institution, they are used for the purposes of transferring money, investing or storing value.

Tokens also use this blockchain decentralizing technology to also decentralize their “ownership power” function from some other asset.

They are created by the Proof of Work, Proof of Stake protocols. A relatively simple process compared to creating cryptocurrencies. For a token to be developed, it needs to be embedded in a blockchain of some cryptocurrency. Thus, the token also takes advantage of everything that technology provides, speed and security for transferring values, transparency and anonymity, and of course, decentralization. Tokens can also function as a means to capture the investments needed for the development of new projects or services that use blockchain technology.