diff --git a/src/pages/write-smart-contracts/tokens.md b/src/pages/write-smart-contracts/tokens.md index dbe0b4ee..a2083b43 100644 --- a/src/pages/write-smart-contracts/tokens.md +++ b/src/pages/write-smart-contracts/tokens.md @@ -9,23 +9,63 @@ images: ## Introduction -TK +A fundamental use of blockchain technology is the representation, store, and transfer of value between users of a +blockchain. Cryptocurrency is a very common use of blockchain technology, and remains one of the primary drivers +of adoption of blockchain technology. Cryptocurrencies are represented by blockchain tokens: representative units +within a given blockchain ecosystem. Blockchain tokens can extend beyond just digital currency, however, and recent +developments throughout the cryptocurrency community have demonstrated potential for the use of blockchain to tokenize +and represent not just money but other tangible assets. + +A blockchain token is a digital asset that can be verifiably owned by a user of a blockchain. Blockchain tokens are +governed by a set of rules that are defined by either the blockchain itself (in the case of native tokens) or by a +smart contract on a blockchain. Rules can vary depending on the nature and the use of the token. + +Tokens on a blockchain fall into two general categories, depending on their properties: [fungible][] or +[non-fungible][]. The following sections discuss the properties of both types of tokens, and provide information about +implementation of the two types of tokens on Stacks. ## Fungible tokens -TK +A core property of any token on a blockchain is fungibility. A fungible token is a token that's mutually interchangable +or capable of mutual substitution. In other words, one quantity or part of a fungible token can be replaced by an +equal quantity or part of the same fungible token. Fungible tokens are often used to represent real-world fungible +assets like currency. The STX token is an example of a fungible token. Other examples include stablecoins, tokens that +represent voting rights in a DAO, or tokens that algorithmically track the price of stocks. + +Fungible tokens form one of the most important value propositions for blockchain technology, the ability to store value +and exchange that value through both internal and external transactions. Because fungible tokens can be divided into +smaller parts and recombined into the same value representation, they serve a great utility for transferring value +between blockchain users. + +The primary fungible token on the Stacks blockchain is the native token, STX. Because the Stacks blockchain allows for +the creation of [smart contracts][], other fungible tokens can be created on the Stacks blockchain as well. [SIP-010][] +specifies the standard for fungible tokens on the Stacks blockchain. This specification defines the functions and traits +that a fungible token on Stacks _must_ have. By complying with this standard, fungible tokens on Stacks can be easily +represented by wallets that support Stacks. ## Non-fungible tokens (NFTs) -TK +Non-fungible tokens (NFTs) are a type of token that are not interchangeable. NFTs have unique traits (usually in the +form of attached metadata) that restrict the abillity to replace them with identical tokens. An NFT is a token that is +unique, such as a piece of art, or ownership rights to a real-world asset such as a house. -## Further reading +NFTs alone don't have an inherent value, like a currency. The value of an NFT is derived from the assets that the NFT +represents. The use of NFTs are myriad, including digital art, collectibles, domain names, and representation of +ownership of content rights. NFTs can be used as digital certificates that track the authenticty of real world items, or +digitize the ownership rights to property. + +As with fungible tokens, NFTs on the Stacks blockchain are created with [smart contracts][]. [SIP-009][] specifies the +standard for NFTs on the Stacks blockchain. This specification defines the functions and traits that an NFT _must_ have, +but most NFTs have more functions or traits attached than those solely described by the specification. By complying with +this standard, non-fungible tokens on Stacks can be easily represented by wallets that support Stacks. -TK +## Further reading -## Scratch +- [The Difference Between Fungible and Non-Fungible Tokens](https://101blockchains.com/fungible-vs-non-fungible-tokens/) +- [Explain It Like I Am 5: NFTs](https://messari.io/article/explain-it-like-i-am-5-nfts) -- Good content in here: https://messari.io/article/explain-it-like-i-am-5-nfts -- 101 Blockchains article on FT vs. NFT - https://101blockchains.com/fungible-vs-non-fungible-tokens/ -- SIP-009 -- SIP-010 +[fungible]: #fungible-tokens +[non-fungible]: #non-fungible-tokens-nfts +[smart contracts]: /write-smart-contracts/overview +[sip-010]: https://github.com/hstove/sips/blob/feat/sip-10-ft/sips/sip-010/sip-010-fungible-token-standard.md +[sip-009]: https://github.com/friedger/sips/blob/main/sips/sips/sip-009-nft-standard.md