"Bitcoin is a kind of token — a demand- backed asset like a commodity or a unit of exchange. Ether is an example of a token you can use to purchase certain services. Smart contracts run on Ether so you could also use these tokens to keep track of and use your frequent flyer miles. To extend this further, a token can be like a virtual good: companies like (the Chinese conglomerate) TenCent create their own digital currencies which are used in the game world to buy virtual goods. This has proven to be extremely successful with lots of people buying or exchanging tokens. Imagine applying this to the business model of Facebook or Google. They have very iffy data that can’t be properly verified. There could be a lot of value if the person who owns the data would agree to trade that knowing that he can benefit from that financially. The notion of self-sovereign ID and data is now accepted, and companies that don’t comply will be vulnerable to heavy penalty. Tokens can be used to create a common protocol on how to handle permissions to use data so companies don’t run afoul of liability laws."
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What is the difference between a bitcoin and a token?
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John Henry Clippinger
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