Why don't tokens use a standard transaction method (blockchain)?

Question

If a token is a coin already created on the basis of some existing blockchain (let’s take Ethereum for example), then why does tokens need smart contracts? Why don’t they use regular transactions like the main coin in this network Ether? How ether transactions work is described below in a very simplified way. Why can't tokens use the same approach, but instead resort to using smart contracts?

Each new block contains information about the current transaction, a hash of the current block and a hash of the previous one)

Answer 1

Tokens on Ethereum (or any network) require smart contracts primarily due to their unique nature and the functionalities they provide, which differ from the native token (i.e., Ether).

These functionalities are mainly in the form of Token Standards and Customization:

• There are various standards like ERC20, ERC721, ERC1155, etc. for creating fungible and non-fungible tokens. Each standard defines a set of rules and functions that the underlying token contract must implement, ensuring compatibility and interoperability with wallets, exchanges, and other services.

• Tokens often have specific behaviors, like minting, burning, pausing transfers, or specific rules for transfers. Smart contracts allow for these custom rules and functions to be encoded, providing flexibility beyond what native token (i.e., Ether) transactions offer.

• Token transfers need to be verified and executed by the underlying token contract.

On the other hand, the native token (i.e., Ether) transactions are simpler because:

• Being the native asset, its transfer is directly handled by the protocol itself. The network natively supports its transferring between accounts using a straightforward transaction model.

• Ether transactions are integrated into the block validation and consensus mechanisms of Ethereum (or any network).