Why these crypto categories will succeed
The crypto currency industry is one of the most diverse on the planet. Over the past few year, we have seen so many new crypto projects coming on the market each with its unique features and with a different approach to one or several challenges facing the world today especially in the area of finance.
Cryptos can be categorized in about 8 types depending on the main utility of the coin or token in the project.
In the first category, we have payment cryptos that aim at optimizing transfer of value from one person to another. They mostly want to ensure easy, cost effective, secure and fast payments for goods and services. Here we have examples like, bitcoin, bitcoin cash, litecoin, nanocoin, Dashcoin, Monero etc (this sub type actually aims at becoming an alternative if not a replacement for fiat). There is also a sub-type with an example like celo coin that actually aims at optimizing payments through use of stable coins (coins pegged to fiat- cUSD, cEUR) which is also a unique approach to the same problem. In this case the project does not aim at replacing fiat but rather making fiat transfers more efficient.
The second category is the utility coins that are mostly used to pay for transaction/ gas fees within a particular crypto project ecosystem or network. Here we have two sub categories; smart contract coins such as ether coin, solana coin, avalanche coin etc and also exchange tokens/coins such as binance coin ( which is actually a smart contract coin as well).
The third category of crypto coins is the oracle coins which in essence are utility coins/tokens as well since they still mostly serve same purpose (payment for gas/ transaction fees in a crypto project network or ecosystem). Oracle coins are used by oracle crypto projects such as Chain link, Band protocol etc.
The forth category has coins that power the decentralised storage of data. Here we have an example like file coin. The coin is used to incentivise the sharing of storage space (participants are paid file coins for rendering a service of storing data on behalf of data owners) The coin is in essence a utility coin.
We also have meme coins in the fifth category which serve no purpose other than exciting their participants and promising them a millionaire lifestyle in a quick way. Here we have examples like doge coin (aims to be a bit coin killer/ alternative though), shibaInu coin, etc.
The sixth category is that of stable coins. Here we have examples like USDT, USDC, USDP, UST, etc. Stable coins come in all formats, but they all serve a single purpose; to provide stability. By providing stability in the cryptocurrency market, they’ve effectively invited those market participants who were once too shaky to enter the market due to excessive volatility.
The seventh category has Fan coins/ tokens. These are a new category that mostly aim at transferring some degree of ownership of sports teams to the fans. They are a form of cryptocurrency that gives holders access to a variety of fan-related membership perks like voting on club decisions, rewards, and merchandise designs. They are a better form of meme coins in essence.
In the last and eighth category we have metaverse coins. Metaverse tokens are a unit of virtual currency used to make digital transactions within the metaverse. Metaverses are sprawling universes that users can access via a computer or virtual reality headset. These platforms allow you to work and play in a fictional, digital realm. Here we have examples like Axie Infinity AXS, Sandbox Sand, Decentraland Mana etc.
As you can see, it is really not easy to know which category will actually succeed. It kind of becomes a matter of gambling for most people. However the truth is each category has its own believers or diehards and have established strong communities. As an investor, it is therefore very important to equip yourself with information on all these various project categories so that you can make an informed decision.