Topic: Types of Cryptocurrencies - Know what your investing in (Read 172 times)

Hello Peeps,

Hope this article comes in as useful when making your cryptocurrency investment choices.

After the introduction of Bitcoin in 2009, the underlying technology which was perceived to aid as a peer to peer payment system only has been put to use for varying functions. With the overwhelming number of cryptocurrencies in circulation and the staggering amount of ICO's that are taking place, knowing the type of digital token your investing is essential as it could serve the purpose of filtering out worthless projects.

Find below the main token types currently found,

Currency Tokens

1. These tokens act as online currencies or can be used as a store of value
2.The most notable being Bitcoin core.

Tokenized Securities
1. Also known as Equity securities or Securities tokens
2. These tokens give ownership of a company to the holder and is similar to company securities/shares. As a result these are governed by the US Securities and exchange commission and other global financial regulators
3. The tZero ICO is a security token offering

Utility Token
1. Also known as App coins and User coins
2. These tokens provide access to a Blockchain platform, product or service.
3. These do not give ownership to a holder and therefore currently not fallen under any regulatory restrictions.
4. The Binance coin is a classic example of a utility token, holders are able to cut their transaction fees by 50% when they have a Binance token balance.

Asset Token
1. These are digital tokens that represent a physical asset or productt
2. A project known as Goldmint holdings are digitizing and tokenizing physical gold holdings. This enables difficult to store assets to be bought online easily.
3. These tokens are not preferred among investors due to low upside potential, that is the value of the token usually does not exceed the value of the asset.

Reputation Token
1. Given to users of a Blockchain platform
2.The reward can symbolize a users reputation or merely awarded to the user for his active participation in the platform.
3. The Steem power awarded on the Blockchain powered social media platform Steem is the best example of a rewards token.