Did you know that number of cryptocurrencies doubled from 2021 to 2022, with 1,000 cryptocurrencies added every month at the end of 2021? There are more than 12,000 cryptocurrencies in the market currently, but that doesn’t mean that they are all the same kind.
There are primarily four types of cryptocurrency that you need to be aware of, as an investor. Keep reading to find out more.
1. Utility
This kind of cryptocurrency provides access to a particular platform service. The crypto resides on the platform as well, making it easier. Some good examples of this kind of crypto are Funfair, Golem, BrickBlock, etc.
You can also think of utility crypto like coupons or vouchers which allow you certain access to a product or service run by the token issuer. You can buy the utility token and get access to the product or service by redeeming the token.
2. Payment
As you can imagine, this cryptocurrency type gets used for paying for goods and services outside the platform and inside where it resides. Almost every crypto that you can think of would fall into this category. Ethereum and Bitcoin are the most well-known cryptocurrencies out there that fall into this category.
Remember that not all utility tokens can be payment tokens, but a lot of security or utility tokens are.
3. Security
When financial regulation governs the usage and issuance of a particular cryptocurrency, then it’s a security token. They get used for the securitized tokenization of assets, like properties, bonds, stocks, etc. Just like stocks get offered through IPOs (Initial Public Offerings), the same applies to these security tokens which are offered through STOs (Security Token Offerings).
4. Stablecoin
You have probably seen this term used quite a bit in the crypto world. Usually, Bitcoin (BTC) and Ethereum (ETH) are the most mentioned the most as stablecoins.
The deal here is that there are so many new cryptocurrencies being created and pushed out into the world every day, and a lot of these don’t survive beyond their 1st birthday. So there is a need by crypto investors for Stablecoins, that is, a cryptocurrency that’s been around for a while and which can be relied upon to stick around for a long time to come.
No one wants to invest in a cryptocurrency and realize all their hard-earned money was poured down the drain because the coin disappeared after a few months. Click for Uniswap price CAD.
Types of Cryptocurrency: Choose Your Flavor
The more you understand the intricate world of cryptocurrency, the easier it will be for you to choose the types of cryptocurrency you wish to invest in. Make sure to invest only what you can afford to lose since the cryptocurrency market is extremely volatile and still in its infancy phase.
Read through related cryptocurrency 101 articles on our website to make informed investment decisions with your portfolio and make profits, rather than losses.
