Token Categories

There are a lot of different tokens in the world of cryptocurrencies. Each coin aims to have a unique purpose, but the way to achieve that purpose can be similar to other tokens. There are a couple of categories to make that distinction between different types of tokens and to better understand the purpose of a specific blockchain project.

Currency tokens
Currency token are meant to be used as a medium of exchange for people to purchase goods and services. 

Utility tokens
Utility tokens are meant to be used to get acces to services. Utility tokens are also called app coins and represent the right of participation in an online network.

Asset tokens
Asset tokens are linked to assets and represent ownership of that asset.

Stablecoins are a form of asset tokens, that aims to create stability and are for that reason backed by fiat currency or other valuable goods to achieve stability.

Equity tokens
Equity tokens represent ownership of an asset such as debt or company stock. These tokens are often issued by start-up companies or projects.

Voting tokens
Voting tokens are often used in decentralized autonomous organizations and are meant to create democracy in an organisation. Voting tokens can be used for governance of a decentralized autonomous organization.

Reputation/Reward tokens
Reputation or Reward tokens are a type of tokens that show appreciation or give credits to participant in an ecosystem. Input of a participant can be validated with this type of token. This can be used for reviews, services, gaming, etc.

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