scroll

What types of cryptocurrency and tokens exist?

BY Saul Hidalgo

Tokens can be classified from different perspectives.

Thus, from a technical point of view we have:

  • Native token of a blockchain. A token implemented in and part of the network protocol it is issued in (eg BTC).
  • Non-native token. A cryptocurrency created by a project only for use within its borders, issued on a network after the fact for a variety of purposes, like wrapped tokens, application utility tokens, governance tokens, or stablecoins.
  • Application token: tokens that are native to decentralized applications and have a cryptographic asset associated with their use or monetization, without locking value in its parent protocol (eg SAFEcoin).
  • Depending on its purpose:

  • Cryptocurrencies, created with that specific utility to serve as crypto-currency (eg Zcash)
  • Network tokens: initially intended to use within a specific system (eg GNO from the gnosis olimpya network).
  • Investment tokens. A token that is primarily intended as a way to passively invest in the issuing entity or the underlying asset (eg Digix Gold).
  • Based on the underlying value behind the token:

  • Asset-backed tokens. A representation of ownership of a physical asset. Derives its value based on the underlying asset (eg USDT).
  • Tokens that give value to a network. Linked to the value and development of the network (eg ETH).
  • Tokens assimilated to stock. (ex. DigixDao's DGD).
  • In any case, we will wait to have the final text and we will continue reporting.

    If we classify them by their usefulness:

  • Usage tokens: that give access to a digital service, guaranteeing its holder exclusive access to the functionality of the service (eg STX).
  • Work token: they give the right to contribute to a system in exchange for rewards or utilities within a decentralized organization (eg Maker DAO).
  • Hybrid tokens: with working and usage token traits (eg Eth or Dash).
  • And according to their legal status:

  • Utility token: it offers its owner a clearly defined utility within a network or application. It can function as an internal payment currency of a network or an app (eg BAT from Brave).
  • Security token: token that behaves as a value. A hybrid between shares of a company and cryptocurrency. Its owner is considered the owner, granting rights and obligations (eg Bitwala).
  • Cryptocurrencies: it is the crypto-currency in the strict sense. It acts as a reserve of value and a medium of exchange, not being issued by a central authority. Today it does not have the consideration or functionality of a legal tender currency, so it is not regulated under the laws that govern money (eg Btc).
  • Galleta

    Cookies

    We use own and third party cookies to improve our services.

    Cookies Notice