Tokens
Tokens are digital assets on a Blockchain that represent ownership of physical or real-world assets. Tokenization enables the digitalization of property rights for both fungible and non-fungible assets.
A Fungible Token represents an asset of a specific type and value, where each asset is not individually or uniquely identifiable. A number of tokens represents the ownership of a number of the underlying asset. For example, shares in a company. Each share is worth exactly the same at any point in time and is not distinguishable from any other share. Ownership can be defined by specifying a number of shares without needing to specifically identify individual shares. A change in ownership is only a change in the number of shares owned.
Non-fungible Tokens (NFTs) represent assets that are uniquely identifiable and can only have a single owner at any given point. For example, a physical painting. The ownership of a physical painting can be represented as an NFT. The NFT can be traded but only as a whole (the complete ownership of the painting is transferred) from one owner to another.
The Gamified Stock Exchange Project
Shares in a company will be represented as tokens that can be exchanged between all participants in the system. If a company wants to list 100 shares on the exchange, then 100 tokens will be created which will initially stay in the company’s account and these tokens (representing shares) will be transferred to the trader’s accounts upon execution of a buy order.
Every company will need an account which will mint tokens representing shares in the company. These tokens will be transferred to the account of the trader who first purchases the shares.
Every trader will also need an account to hold the tokens but a trader cannot mint tokens. Tokens can only be transferred between trader accounts as they buy and sell shares.