In case the reader is not familiar with the types of crypto assets available in the market, then this piece of information would be an instant eye-opener for them. Imagine a scenario where the reader is expected to make a cryptocurrency-based payment but is not familiar with the subject. Let us try to educate our users about the multiple cryptocurrencies operating in the market.
- Coins – Coins are basic digital currencies having their own blockchains. Most of the initial crypto assets comprise Bitcoins, ETH. The initial cryptocurrencies or were simply created for the purpose of assisting digital transactions.
- Tokens – These are the second most popular type of cryptocurrency. The primary difference between a coin and a token is that a token does not have its blockchain. They are usually created on a pre-existing blockchain like Ethereum. Tokens can be further divided into utility tokens and security tokens.
- Utility Tokens - The person holding a utility token has the access or control over a particular product or service of the issuing company. It is like the right or authority to use a particular product or line of services by holding the utility tokens.
- Security Tokens – The security tokens come in the form of digital securities which are a pure representation of the actual or fixed assets. Thus, security tokens are basically signifying the source of ownership of a given coin.
- Stablecoin – The stablecoin has emerged as the requirement to have a cryptocurrency that can be associated with a traditional asset namely gold or dollar. Digital assets deriving their value from real currencies would be more stable compared to other cryptocurrencies.
All entrepreneurs should know about the basics of the cryptocurrency industry since the world is embracing the blockchain revolution. Cryptocurrency would be an integral component of the same industry.