@CryptoWordsmith 21 October 2020 edited

Cryptocurrency FAQ - What are the different types of tokens? Now that we understand the difference between a *coin* and a *token*, we can explore the different types of tokens. Based on my research, there are differing opinions on token classifications. I did my best to sort through the noise, and have presented a summary below. https://read.cash/@CryptoWordsmith/cryptocurrency-faq-whats-the-difference-between-a-coin-and-a-token-348f6fde

*Related reading:* *What's the difference between a coin and a token?* https://read.cash/@CryptoWordsmith/cryptocurrency-faq-whats-the-difference-between-a-coin-and-a-token-348f6fde I found some articles suggesting there are up to 5 or 6 different types of tokens. But based on my understanding, I feel that most tokens can be classified into one of four main types: *(Last edited October 22, 2020)* 1) Security Token

These tokens are best thought of as on-chain representations of real-world property, securities, or other types of financial assets. Ownership can entitle an individual a right to a share of earnings, a right in property distribution, or other similar legal rights. Examples: Merido: Tokens represent real estate shares https://www.meridio.co/ Factor-805: Tokens represent real estate shares https://medium.com/futurefinco/factor-805-introducing-dai-into-security-tokens-a02a98f69cd9 Paxos Gold: Tokens backed by physical gold https://www.paxos.com/paxgold/ By following the lead of Paxos Gold, an argument could be made that other *stablecoins* can be classified as security tokens. https://read.cash/@CryptoWordsmith/cryptocurrency-faq-what-is-a-stablecoin-5cd786d2 *Related reading:* *What is a stablecoin?* https://read.cash/@CryptoWordsmith/cryptocurrency-faq-what-is-a-stablecoin-5cd786d2 2) Utility Token

Utility tokens generally represent access to a service, or can function as a medium of exchange within an ecosystem.  Examples: Basic Attention Token (BAT): Advertisers gain access to an individual's attention when consuming digital media with this token. https://basicattentiontoken.org/ Golem (GNT): Individuals gain access to network computing power with this token. https://golem.network/ SAND (SAND): This token is used as the basis for transactions throughout the Sandbox ecosystem. https://www.sandbox.game/en/sand/ 3) Governance Token

The decision-making processes around decentralized protocols often require tokens to back blockchain-based voting systems. Governance tokens fill that role. Examples: Maker (MKR) https://blog.coinbase.com/maker-mkr-is-now-available-on-coinbase-7f3c381a60d3 Compound (COMP) Kyber (KNC) https://www.coinbase.com/earn/kyber-network 4) Non-Fungible Token (NFT) I have written a separate article to explain non-fungible tokens (NFT) in more depth. These tokens represent a unique asset (no two of them in the world are identical), and they have no value when divided. These can either be entirely digital assets or tokenized versions of real-world assets. In fact, some of these tokens are not available for mainstream use at the moment! I'm simply predicting their prevalence and acceptance will increase dramatically over the next five years. https://read.cash/@CryptoWordsmith/cryptocurrency-faq-what-is-a-non-fungible-token-nft-1f489469 Use cases for NFTs include: Tickets for travel, or events such as concerts, conferences, etc. Seat reservation Degree and/or timing of access provided Entitlement to specific services (refundable, transferrable, etc.) Digital identity Digital items (for gaming, gambling, and other industries) Crypto-collectibles *Related reading:* *What is a non-fungible token (NFT)?* https://read.cash/@CryptoWordsmith/cryptocurrency-faq-what-is-a-non-fungible-token-nft-1f489469 *Last edited October 22, 2020* It's notable that some tokens can fit into more than one classification. New use cases will also present themselves regularly in this rapidly evolving industry. The next time someone speaks about a token, you can try to see if it fits into one or more of the four uses cases presented in this article. Thanks for reading, and stay safe! If you would like to support my work, please hit like 👍 and subscribe! 😊 Follow me on Twitter: *@CryptoWordsmith* https://twitter.com/CryptoWordsmith **#EarnFreeCrypto** https://read.cash/search?q=%23EarnFreeCrypto **#EarnPassiveIncome** https://read.cash/search?q=%23EarnPassiveIncome *Last edited October 22, 2020* Cover image by **loufre** (modified by the author) from **Pixabay**  https://pixabay.com/users/loufre-2697555/?utm_source=link-attribution&utm_medium=referral&utm_campaign=image&utm_content=1756278 https://pixabay.com/?utm_source=link-attribution&utm_medium=referral&utm_campaign=image&utm_content=1756278 Image 1: Photo by Nick Chong on Unsplash https://unsplash.com/@nick604?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText https://unsplash.com/s/photos/stock-market?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText Image 2: Image by **Mudassar Iqbal** from **Pixabay**  https://pixabay.com/users/kreatikar-8562930/?utm_source=link-attribution&utm_medium=referral&utm_campaign=image&utm_content=3407232 https://pixabay.com/?utm_source=link-attribution&utm_medium=referral&utm_campaign=image&utm_content=3407232 Image 3: Image by **B Ban** from **Pixabay**  https://pixabay.com/users/bphotography-18371568/?utm_source=link-attribution&utm_medium=referral&utm_campaign=image&utm_content=5644594 https://pixabay.com/?utm_source=link-attribution&utm_medium=referral&utm_campaign=image&utm_content=5644594 It's the perfect time to start earning free crypto while you learn about it!

If you want to earn free BCH, **read.cash** is always looking for aspiring authors. Previous writing experience is not required! I invite you to create an account using my referral link by clicking **here**. https://read.cash/r/CryptoWordsmith Thanks for your support! Resources: https://academy.binance.com/en/glossary/token https://blog.makerdao.com/the-different-types-of-cryptocurrency-tokens-explained/ https://blockgeeks.com/guides/utility-tokens-vs-security-tokens/ https://blog.liquid.com/whats-the-difference-between-security-tokens-and-utility-tokens https://cointelegraph.com/news/defi-governance-tokens-tread-carefully-as-the-secs-invisible-hand-looms https://blockonomi.com/governance-tokens/ https://hackernoon.com/what-is-stablecoin-and-how-it-is-related-to-security-token-security-token-vs-stablecoin-8d40135928e3