In general, tokens are non-mineable digital currency units that exist as blockchain registry records. Tokens can be used to encode unique data or act as a type of currency for particular ecosystems. Furthermore, certain tokens might be exchangeable for off-chain assets (such as gold, real estate, or equities). As evidenced by the numerous ERC-20 tokens that were issued and sold through initial coin offerings (ICOs) in 2017, tokens are typically issued by businesses using third-party blockchains that are already in existence, such as the Ethereum blockchain. Tokens, strictly speaking, are transferable units of value created on top of a blockchain rather than cryptocurrencies like Ether. Based on the many attributes of the tokens, there are various classes for them. Tokens are divided into security tokens and utility tokens using functionality as the primary classification. In an ecosystem, utility tokens typically serve as a means of exchange or as access to a service. The ability to pay for products and services is still available. On the other side, security tokens stand in for monetary assets. In an ICO, a business might, for instance, issue tokenized shares that come with dividends and ownership rights. These would be the same as regularly dispersed shares legally speaking. In a different classification, characteristics are evaluated to differentiate between fungible and non-fungible tokens. You maintain the same value if you exchange one dollar bill for another. It doesn't matter which unit you possess because they all have the same function. On the other hand, you cannot remove a special work of art and replace it with another. The same rule applies to tokens.