What are the types of cryptocurrency tokens?
Most people know that cryptocurrencies are a means of exchange. What is lesser known is that cryptocurrencies serve a variety of other purposes besides transferring value. If you are planning to invest in cryptocurrencies, it is crucial for you to understand the differences between the types of cryptocurrencies. A leading Cryptocurrency Development Services will help you choose and provide the best and Custom Cryptocurrency Development most suited for your business.
Security token
A security token must have the status of passing the Howey test. It dodges middlemen in the exchange but assures extra level of security through two-factor authentication. Security token favors more liquidity which eventually allows expansion of the investor base.
Utility token
A utility token is chiefly used for crowdfunding purposes. It is often associated with smart contracts and decentralized apps (dApps). These tokens are created to provide investors with extra utility other than a trade. Having a utility token may also give access to a function provided directly by the businesses which issued the token.
Asset token
Asset tokens stand as the best use case of blockchain technology as it allows the owner to possess any approved product by the provider. Unlike others tokens which allow participation in the provider company’s authority, Asset tokens permits to handle real assets, for instance Gold.
Equity token
An equity token represents an allotted share in an underlying company. With any stock purchase, holders are literally granted to own a given percent of the total enterprise. They represent assets and imply to ownership and control over a business that issued the token.
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