How to get your head around the blockchain and Ethereum? Tokens? Ether? Cryptocurrencies? Sheesh….
Here’s my take on how Ethereum tokens might work:
The tokens allow application builders (coders) to set up rules for an exchange of value within an app’s network. Hypothetically, if a Facebook competitor was created on the Ethereum blockchain (rather than the internet), a token (or a fraction of a token) might be exchanged each time you liked something, or shared something. More likes = more tokens. Maybe there is a shop on the same token system to exchange for goods.
For another real life example – an application such as civic (www.civic.com) which seeks to secure online identity will trade a token as a marker of a user’s true identity details. Anyone or any company that is part of the Civic network can exchange tokens and be assured that these tokens represent true, non-fraudulent proof of identity (I think…not quite sure on all of this).
Trying to write your own understanding of something helps you to learn about the subject. I am not sure I understand this subject completely, but I am getting there.
Happy weekend 🙂