Crypto Knowledge Buffet: Various Types of Tokens
Good day readers and my fellow Tron fans, Rasheed is here again bringing you back to back blockbuster content. Today we would be looking at the various categories of tokens since most people generalize and don't know of such. I had been saving this post for today because I would be celebrating my 1 year Steemit anniversary. I felt this was the best way to celebrate with you all so sit back and enjoy.
The crypto space is very huge and there are many people using numerous terms both the ignorant and the experienced. Some people choose to differentiate a crypto coin from a crypto token while the new lot just call everything a crypto coin although they are all cryptocurrencies. I personally believe that this distinction is necessary so I would go ahead to define what a crypto token is so we don't miss it up with the meaning of a coin. Cryptocurrency Tokens are virtual currencies that don't have their own blockchain and hence they are built untop an existing blockchain network with the aid of smart contracts. It is really hard, expensive and complicated to build your own blockchain network so those with ideas for new tokens can build them on an already existing blockchain through smart contracts. This has made token creation relatively easy and this has brought about numerous new tokens both the serious ones and those used to pull off scams and even meme tokens. Crypto coins on the other hand are native currencies of the blockchain network. Let me give a very comprehensive example. Tronix (TRX) is the native currency of the Tron blockchain so it is a coin and BitTorrent (BTT) is a token built on the Tron blockchain so it is a crypto token. There are different types of virtual tokens and they include
Unity tokens
Funds are need in businesses for various reasons. Companies would need to raise these funds so they issue utility tokens which investors buy at ICOs giving the investor some rights in the company's affairs. Utility tokens can also be used to purchase products and services from the company. Some examples of utility tokens include funfair, Basic Attention Token (BAT) etc
Governance tokens
As the name implies, governance tokens are cryptocurrencies that give it's users/holders exclusive governing rights in a particular decentralized finance or decentralized application. It's holders have kind of like a partial ownership and get a say in the decision making of the said DeFi or dApp like the changes that are to be made. They normally have no intrinsic value on their own. Examples of governance tokens include UniSwap's UNI token and PancakeSwap' s Cake.
Non-Fungible Tokens
These are digital assets that represent actual real life objects. Imagine wanting to sell of an artwork, a song, a game skin even a tweet so you digitalize them and sell them once sold, the buyer has the right to do whatever they want with it since it's officially his and can even tell someone else who might have stolen the picture to desist from using it. Non-fungible as the name implies meaning it can't be exchanged with another NFT of it's kind. On Twitter today, you see so many cryptocurrency enthusiasts HODLing many expensive NFTs and giving them out to their fans and so on. There are numerous types of NFTs so much so that even people who are in no way interested in crypto become interested and wants to procure theirs
Exchange tokens
These are currencies issued and sold by the exchange that own it in order to raise funds. For example, the Binance exchange token (BNB) is used to carryout various transactions on the Binance platform and it is a widely used platform, they must have raised alot of funds. Now so many transactions require gas fees in BNB and even airdrops. Numerous crypto exchanges are present in the world today and many of them have their own tokens under them. Examples of other exchange tokens include Huobi token, Kucoin token, Probit token.
Security tokens
In a real life phenomenon, we have stocks, share, bonds etc These are securities. Security tokens on the other hand are kind of like these bonds or shares but in digitalized forms and just like these traditional securities, security tokens can be used to represent partial ownership of an asset and they are built on a blockchain too just like other cryptocurrency Tokens.
I hope I have been able to expand the knowledge of my readers. There are numerous types of tokens and generalizing them would only make us seem ignorant so it's good we know how to identify, classify and differentiate between the various tokens. I believe I was able to explain it very well to the understanding of my readers. Thanks for reading
[10% to @tron-fan-club]
Honestly, I don't have much Crypto Knowledge. I know fairly well. But I can learn a lot from your post. Thanks for sharing the important post.
No prob man. We learn something new everyday, I too have learnt alot from you and the other community members. Thanks for reading. I look forward to your next publication
They are several tokens in the crypto market which we can not list all here but what you have been able to put up is ok for token understanding. Thanks for sharing.
Thank you for reading, I will keep educating and learning with you all as time goes on
Thank you very much for the update
I enjoy reading all of your posts so far. Keep up the good work bro, you're inspiring some of us. Thank you.
This guy you just dey everywhere. I guess no one hustles as much as you do. I'm starting to get inspired all of a sudden. Steem on man, I look forward to more posts from you
Hahaha bro. I have goals i plan to achieve and i guess i can't do that without working hard. I have also been taking inspiration from you and i know following your footstep will get me far.
What a nice post you've got there, now i know better