Different Types of ICO Tokens

Types of ICO tokens

Bitcoin was created as a digital peer-to-peer payment system that gives a possibility to users to store, send, and receive money without the need of any financial intermediary such as a bank. This way, the term “cryptocurrencies” was born.

With the birth of Ethereum and the boom in initial coin offerings, newly issued tokens were no longer purely digital currencies but transformed into a list of different tokens with different functions.

Currency Tokens

Currency tokens, coins, or cryptocurrencies are digital tokens that go into online currencies that could be used to buy and sell products and services and could be held as a store of value.

The main differences between cryptocurrencies and digital versions of fiat currencies are that the cryptocurrencies are decentralized and that is why are functioning independently of a central bank, they don't require the use of a financial right now, and they use cryptography and a peer-to-peer network to ensure transaction security.

The big example of the world’s leading digital currency is, of course, bitcoin.

Tokenized Securities

Tokenizes securities, also known as equity tokens or security tokens, which represent a share in a company that has completed a token sale. That is why tokenized securities are, effectively similar to stocks and imply ownership and control.

Tokenized securities now fall under the regulatory scope of the U.S. SEC and several other global regulators since they have been deemed securities under securities laws.

Reputation/Reward Tokens

Finally, there are also reputation and reward tokens, which are given as rewards to users on a platform. They can symbolize a user’s reputation or simply a reward for being active on a specific blockchain platform.

These type of tokens are difficult to value and just because they are not very popular among investors.

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