Tokens are created and managed on existing blockchains, such as Ethereum, and can serve multiple purposes, from facilitating transactions to representing ownership of assets. Unlike cryptocurrencies like Bitcoin, which have their own independent blockchains, tokens generally utilize the infrastructure of another blockchain. They can function as a medium of exchange, a means of representing assets (like real estate or art), or a way to develop decentralized applications (dApps) by granting access to services within a network.