What Are Cryptocurrencies? The Crypto Beginner’s Guide

Cryptocurrencies or virtual world operates in a decentralized environment. More than 10,000 cryptocurrencies are presently circulating in the market, and each of them has the potential to change the global economy. If you want to be a part of the crypto ecosystem, knowing the different types of cryptocurrencies is important. Here we have given a broad classification of the type of cryptocurrencies bitcoin trader, their key features, and common examples.

What Are Utility Tokens?

The utility tokens are like coupons or vouchers, which are used as digital units to represent a value on the Blockchain network. Tokens you can access a product or service operated by a token user. You can consider it too similar to the tokens that you get in the gaming zone. You can use those tokens to play the games of your choice. Each token has a different value and has a strong position within the premises of the gaming zone.

• The holder of a utility token can buy a product or service which is equal to the value of the top but doesn’t the total ownership
• It is not under any kind of financial regulations.
• The holder of the people is not having an equal in stock or bond, or other assets regulated under the financial acts.
• It can be used as storage network reward tokens or as a currency for a Blockchain

Examples: Basic Attention Token, Sirin Labs Token Funfair.

Security Tokens– Next comes the security tokens, these assets have their value from an external asset. It can be traded under financial regulation and in the form of security. These are used for securitized tokenization of properties, property, stocks and bonds.

• Issued via security token offerings
• They offer instant settlement
• Maintain transparency and visibility of assets.
• These are further subdivided into equity tokens and asset-based tokens

Payment Tokens-These are used for buying and selling goods and services on a digital platform. The execution of payment is done on a decentralised form and has no third-party intervention. Most cryptocurrencies and tokens fall into this category. But not all utility tokens can be payment tokens.

• These are hybrids of other tokens
• The primary usage is for making payments
• They may or may not guarantee a holder access to a product or service.

Examples: Ethereum and Bitcoin.

Exchange Tokens-These tokens are specific to a crypto exchange. One of the pioneering examples in this Is the Binance coin which was primarily associated with by Binance exchange but now you can buy it from other exchanges as well.

Examples: Binance Coin, Gemini USD, FTX Coin

Non-fungible Tokens-the owner has the digital certificate stating that a particular piece of artwork belongs to them. It can be traded. This can be a work of art, music or real estate or collectables. These are unique, non-replaceable items and cannot be traded with another. This is one of a kind of acid that operates on a theory as Blockchain.

1. It was first created in 2015 on the Ethereum blockchain.
2. Having a digital signature is a must.
3. It helps the artist and the creators to sell their items at the best price
4. One can buy and sell the 50s in an FT marketplace like OpenSea, Rarible, Foundation, and Decentraland.

Examples: The first tweet of Twitter Founder

The crypto domain is huge and there are thousands of cryptocurrencies in it. It is lucrative and profitable to invest in cryptocurrencies but with caution. From searching for the best cryptocurrency to defining the right trading strategy everything will define your future of investment.

Conclusion

Finally, if you, too, are willing to be a part of the crypto world, acquitting yourself with the different categories of cryptocurrencies and their key features will help you in picking up the best one. One such fine crypto trading platform is BitQS.

You can simply log on to it and register to start trading in the cryptocurrencies of your interest. There are other platforms to explore but make sure that you register yourself on a but from where you cannot only access all the information about the cryptocurrency but also trade in the cryptocurrencies of your interest.

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect those of Geek Vibes Nation. This article is for educational purposes only.