The 3 Main Types of Cryptoassets that Exist

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3 years ago

In the crypto realm there are 3 main types of cryptoassets that exist. In this article I'll be covering what they are in very basic terms.


Exchange Tokens

Exchange tokens are referred to as 'cryptocurrencies' and the most common cryptocurrencies are Bitcoin and Litecoin. These two currencies make use of distributed ledger technology - but are not backed by any central bank or authority. Also, they are not the same as security or utility tokens as they do not grant the same types of rights or access, however, they can be used as a medium of exchange or as investments.


Security Tokens

Security tokens are a 'specified investment' as described in the Financial Services and Markets Act (2000) (regulated Activities) Order (RAO). They provide rights such as ownership, repayments of particular sums or an entitlement to a percentage of future profits. They can also be used as transferable securities or financial instruments according to the European Union's Markets in Financial Instruments Directive II (MiFID II).


Utility Tokens

Utility tokens can be received to gain access to products and services usually provided by a distributed ledger technology (DLT) platform.


  • Reference: Cryptoassets Taskforce: Final Report, October 2018 [HM Treasury, Financial Conduct Authority & Bank of England]

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Comments

Very nice your post

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3 years ago

nice article

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3 years ago

That's a very informative article. I always had my doubts as to what is the difference between token and Cryptocurrency.

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3 years ago

Nice article brother keep it up... Support me back

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3 years ago

Supper beautiful post

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3 years ago

The "very basic terms" hit me hard. Haha.. I know it's very stupid that I have some cryptocurrencies but I don't really understand the whole system. My brain is overheating with all the terminologies that seems to me it all means same. I just know to buy when low and if I know I gain enough, I exchange it.

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3 years ago

I think getting a utility asset we do me a whole lot of truth

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3 years ago

Until now I have been trying to understand what cryptocurrency is, I have been studying for it. This is really hard for me, but I need to learn.

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3 years ago