The concept of utility coins is quite different from the first cryptocurrencies.
Cryptocurrencies have evolved significantly since they were introduced more than 10 years ago. Today, there are many classes of cryptocurrencies, including utility coins and tokens. Like other cryptocurrencies, utility coins and tokens work on blockchains, and that means they are extremely secure. It is worth noting that cryptocurrencies are meant to be used as currencies, and this is not the case with utility tokens. So, should you invest in utility coins and tokens? Continue below in order to find out.
You might be curious to learn about some great example of a utility token that’s doing well, and their advantage and disadvantage? Let’s dive in!
26 Best Utility Coins and Tokens
This is the toplist with the top utility coins and tokens for people in United States. There may still be restrictions what people in the your geographic region are allowed to do when it comes to crypto currencies. So make sure that you read up on the regulatory restrictions as well as the terms and conditions for each crypto exchange and consider what is allowed or not allowed. Crypto is extremely volatile and not suitable for everyone to invest in. Never speculate with money that you cannot afford to loose.
Go directly to
- 1 26 Best Utility Coins and Tokens
- 1.1 What is a Utility token or a utility coin?
- 1.2 What is a Utility Token?
- 1.3 Examples of how utility tokens or coins are used
- 1.4 What is the difference between a utility token and a governance token?
- 1.5 To Generate initial capital for Tech Startups in ICO’s
- 1.6 Provides access to a Specific service or product within the ecosystem
- 1.7 Which blockchain got the most utility tokens and most potential in this space?
What is a Utility token or a utility coin?
It is important to differentiate between utility coins and tokens. While both of these fall under the umbrella of cryptocurrencies, they are quite different. One key difference between these two is that coins run on their own native blockchains. Tokens don’t have native blockchains and are built on existing ecosystems. It is also worth noting that utility coins can be used as currencies, and this is not the case with tokens.
Utility coins and tokens are cryptocurrencies that are unique to their ecosystems, and they allow holders to use a product or service. In most cases, the purpose of utility tokens boils down to speculating on their values or usage, and this can motivate people to purchase the tokens. As an example, a token can be developed to tip content creators on specific platforms. In order to tip content creators, you will have to purchase the token, and then you can speculate on its price. It is also worth noting that utility coins and tokens cannot be mined as they are created all at once. They are then distributed in a manner that is decided by the creators of the cryptocurrencies.
What is a Utility Token?
This is a non-cash digital asset that resembles a company stock, with the main difference being a lack of regulatory framework around tokens. Tokens carry a value that goes beyond the usual benefits of coin currency. They give the owner a special pass or access to services and products provided by the blockchain network.
Examples of how utility tokens or coins are used
These tokens and coins can be used for many different purposes, and they basically help to support the functioning of various projects and companies. Here are some examples of how the tokens and coins are used:
+Filecoin – By purchasing Filecoin or FIL, you will be able to rent storage space from a network of computers around the world. The storage is decentralized, so you can be certain that your files will be secure.
+Golem – This utility token is meant to give users a chance to rent the spare processing power of their computers to other people. It can also be used to pay for resources via the Golem protocol. The value of the token depends on the adoption of the service, and this is in turn determined by its accessibility, reliability, and its resistant to censorship.
+Basic Attention Token (BAT) – This is a utility token that tracks the attention of users on specific websites, and its aim is to distribute ad money fairly among publishers.
What is the difference between a utility token and a governance token?
In 2016, the Decentralized Autonomous Organization or DAO held an IPO, where they were able to raise $120 million in ETH. This was the first example of a governance token as buyers of the cryptocurrency got voting rights in the organization. By purchasing a company’s governance tokens, you will be able to get more strength when creating projects or voting on existing proposals. With governance tokens, you will also be able to change the fee reward distribution system. This is quite different from utility tokens as they are simply meant for specific purposes such as the purchase of services.
One advantage of governance tokens is that they are classified as securities by financial regulators such as the SEC. This means the capacity for fraud is limited in governance tokens. Also, governance tokens have real use in the real world as they work just like traditional stocks and shares. While governance tokens have many benefits, they also have cons. One disadvantage is that the holders may start trading the tokens, and this can lead to a sharp drop in the token’s price.
To Generate initial capital for Tech Startups in ICO’s
Utility tokens come into existence when a tech startup comes up with a product or service that it wants to share with the public. In the normal world, this company would offer an IPO, an Initial Public Offering, where new stock is bought by members of the public who then get a percentage stake in the company.
In the tech world a similar process with a name that sounds a bit too familiar happens instead, an Initial Coin Offering (ICO). In an ICO, a company would announce the number of tokens available for purchase, and how much each token is worth. Members of the public who want to invest in the company can then buy tokens and have a say in the network while at the same time generating capital for the startups.
Provides access to a Specific service or product within the ecosystem
Token owners are allowed certain rights when they purchase utility tokens. These include:
+They can incentivize people to support useful projects.
+They create solid communities around projects.
+It attracts people with different roles in the project.
-They have a high scam potential.
-The technology is new and can’t be used as currency or equity.
-There have been issues with the regulation of these tokens and coins.
-The projects may fail, and this will result in your loss.
Which blockchain got the most utility tokens and most potential in this space?
Today, most utility tokens run on the Ethereum blockchain. This blockchain might also have the most potential in the cryptocurrency space, and it is also among the oldest cryptocurrency projects.