From Token to Token: Deciphering the Conceptual Archaeology of the Digital Era
A philosophical exploration that reveals why the concept of "token" generates so much confusion in our digitized world
The Problem Nobody Wants to Admit
If you work in technology, digital finance, or simply try to understand the crypto world, you've probably encountered the following situation: someone mentions "tokens" and suddenly everyone nods their heads, but nobody is completely sure what exactly they're talking about.
Are they referring to authentication tokens in computing? Blockchain tokens? Minimal text processing units in artificial intelligence? Digital representations of real estate assets? Or simply casino chips?
This confusion is not accidental. It's the symptom of something deeper: we're using one word to describe fundamentally different concepts, and this ambiguity is creating real problems in interdisciplinary communication.
When Words Become Hostile Territory
From the social sciences and humanities, we observe this phenomenon with a mixture of fascination and frustration. Social scientists attempt to understand tokenization as a social and economic process, but we face a technical vocabulary that seems to change meaning depending on the context.
The situation is paradoxical: the confusion is objectively real, but the communities leading these technological processes have no incentives to resolve it. Why?
First, within each technical community, "token" works perfectly. Blockchain developers, NLP experts, and cybersecurity professionals know exactly what they're talking about when they use the term in their specific context.
Second, specialized jargon serves a social function: it marks belonging and excludes outsiders. Ambiguity can be functionally useful for maintaining barriers to entry.
Third, changing established terminologies requires massive coordination. Early adopters have already invested in that terminology, and the cost of change is high.
Searching for a Conceptual Anchor
But perhaps there's a way out of this terminological labyrinth. If the problem lies in the absence of common ground between communities operating with incommensurable vocabularies, we need to find a conceptual anchor point that allows us to build bridges.
That common point could be found in the very foundations of what we understand by "token"—not in its contemporary technical applications, but in the conceptual structure that makes them possible.
And this is where Charles Sanders Peirce comes in.
The Fundamental Distinction: Type vs Token According to Peirce
In 1909, philosopher Charles Sanders Peirce established a distinction that would prove fundamental for understanding signs and knowledge: the difference between Type and Token.
A Type is a definite significant form that does not physically exist, but determines the things that do exist. It is a general law or habit. For example, the word "cat" as a unit of the English language—there is only one word "cat" (the Type)—but this abstract form cannot physically be on a page.
A Token, on the other hand, is a singular event or individual object that occurs at a specific place and time. Each physical appearance of "cat" in this text is a different token. Tokens are concrete and particular manifestations.
The Ontological Characteristics of the Peircean Token
For Peirce, tokens have very specific characteristics:
- Concrete existence: Tokens belong to the category of things that do exist, in contrast to types that do not physically exist.
- Spatiotemporal singularity: Tokens are events that happen once and constitute a singular thing in a unique place at a given instant.
- Limited identity: Their identity is completely exhausted in their specific occurrence.
- Indexical significance: They are significant only by occurring precisely when and where they occur.
- Perceptual compulsion: They force us to perceive them; we cannot avoid or eliminate them at will.
Current Tokenization: A Different Operation
When we analyze what modern tokenization actually does, we discover that it doesn't create or manipulate Peircean tokens, but rather performs something fundamentally different.
Contemporary tokenization can be described through three main operations:
1. Conventional Discretization
It takes complex continuums and divides them into manipulable units. But these units don't exercise existential compulsion like Peirce's tokens; they are functional constructs.
2. Substitutive Representation
It creates proxies or substitutes that can be manipulated instead of the original. Payment tokens, for example, are not Peircean tokens—they are symbols that function by convention.
3. Operational Identification
It assigns distinctive labels to enable algorithmic processing. NLP tokens don't exercise compulsion, but rather function as analytical categories.
A Protocol for Identifying Digital Tokens
To clarify what really constitutes a token in the contemporary sense, I propose five necessary and sufficient conditions:
The Five Conditions of the Digital Token
- Schema and Identity: There must exist an explicit schema that defines the type of unit with a unique identifier.
- Canonical State Registry: There must be a registry that constitutes the token's state (existence, ownership, metadata, validity).
- Validity and Transition: There must exist a mechanically verifiable validity predicate and a state transition function.
- Control/Authorization: There must be an exclusive control mechanism over pertinent transitions.
- Defined Life Cycle: The system must specify creation, updating, and extinction.
Only when these five conditions are met can we genuinely speak of a digital token.
The Digital Paradox
Something is digital if its identity depends on a discrete encoding over a finite alphabet, can be manipulated by algorithmic procedures, and can be verified by exact equality, regardless of physical substrate.
But here an interesting paradox arises: the digital doesn't deny the physical. "Digital" names a property of representation and identity at the logical-symbolic level, while servers, disks, and cables are the physical tokens that realize that representation.
We can distinguish three levels:
- Logical level: The abstract specification (the "Type")
- Technical/institutional level: Protocols and formats
- Physical-forensic level: Concrete material instances (the "Tokens")
The Four Fundamental Conclusions
1. The Clash of Vocabularies
There exists real friction between the Peircean use of "token" and the contemporary use. In current tokenization, we call "token" what, from Peirce's perspective, would be a composition: a law (type) that defines the asset class plus its replicas (tokens) in the registry.
2. The Question of Existence
In Peirce, the Type doesn't physically exist, but according to our analysis, the "digital" does exist. This apparent tension is resolved by distinguishing between existence and reality: the digital as specification is real as general, while concrete material instances are what actually exist.
3. Reversibility
While the Peircean token cannot be "detokenized" (it's a unique and unrepeatable occurrence), the digital token can be reversed through state transitions (burn, redemption, revocation). There's no contradiction, but rather disciplinary homonymy.
4. Institutional Dependence
The token in Peirce exists independently of institutions; the contemporary token depends completely on them. The Peircean token is a singular occurrence that doesn't need institutions to exist; the current token requires constitutive rules and a registry to have efficacy.
Implications for the Future
This conceptual archaeology is not a purely academic exercise. It has important practical implications:
For regulators: Clarifying what really constitutes a token can inform more precise regulatory frameworks.
For social scientists: It provides conceptual tools to analyze the social and economic impacts of tokenization without getting lost in terminological confusion.
For all of us: It offers more precise language to navigate an increasingly digitized world.
Final Reflection
Tokenization is not just a technical phenomenon; it's a fundamental transformation in how we represent, exchange, and verify value in the digital world. By understanding its conceptual foundations, we are better equipped to participate in the conversations that will shape our digital future.
The terminological confusion we experience is not a system failure, but a symptom of a broader historical transition. We are in the process of developing new forms of social and economic organization, and we need vocabulary that rises to the level of that transformation.
The distinction between the Peircean token and the digital token doesn't solve all problems, but it gives us a more solid starting point for building shared understandings across disciplines and communities. And in a world where conceptual precision can be the difference between progress and confusion, that's considerable progress.
This analysis is based on the monograph ""Del Token al Token: una arqueología conceptual de la tokenización digital" by Dante Avaro (2025), which explores these questions with greater technical and philosophical depth.