Dividend Tokens, Explained

Due to the cryptocurrency boom, the terms "Token", "Coin", "Initial coin offering" and many others have become an integral part of the vocabulary of every trader and investor.

Here are the differences between the main types of tokens.

As the name suggests, these are tokens used as a form of payment and a store of value which can be retrieved at a later time.

Arguably, this makes them identical to "Coins" like Bitcoin and other cryptocurrencies.

The advent of Ethereum created what became known as "Utility tokens".

Unlike currency tokens, this type of token gives holders access to products or services within a particular platform or network.

Utility tokens are multi-functional - they typically "Reside" on top of a given Blockchain such as Ethereum, and for the most part, can be used within their respective network.

In addition to allowing holders to purchase goods and services, securities tokens often promise investment returns and value appreciation.

Asset tokens serve as a digital representation of an asset in an organization or platform.

More of a theoretical than practical concept right now, these tokens give their holders an ownership share in the issuer's capital, pretty much like stocks do.