Blockchain and Cryptocurrency Beginner - Crypocurrency Tokens - Utility Tokens and Equity Tokens - What They are and the Benefits
Utility Token?
A utility token is another type of token in the cryptocurrency space and they are the most popular type of cryptocurrency tokens. A utility token is basically a token that has utility within an ecosystem and gives holders of the token access to services and also can be spent within an ecosystem. Binance is a well-known ecosystem in the cryptocurrency space. Simply put, utility tokens are meant to have use case within an ecosystem. The Binance exchange needs no introduction as it is one of the biggest cryptocurrency exchanges at the moment. Binance Coin (BNB) is a good example of a utility token which is a utility token of the Binance ecosystem.
Benefits of Utility Tokens
- a utility token is a token that powers a blockchain ecosystem
- Utility tokens have uses cases and real utilities within an ecosystem
- Utility tokens are created around community and users in mind
- Utility tokens can be used to lower fees for transactions in an ecosystem
- Utility tokens can be used to pay for services in an ecosystem
Binance Coin (BNB)
Binance needs no introduction as far as cryptocurrency is concerned. BNB is occupying the number 3 position on coinmarketcap. Binance is one of the biggest ecosystems in the cryptocurrency space and their BNB token is the 3rd largest cryptocurrency by market capitalization. Over the past few years, Binance has grown to become an ecosystem in itself not just the Binance centralized exchange. The Binance ecosystem comprises of Binance Chain, Binance Smart Chain, Binance exchange (CEX), Binance DEX, and a variety of other crypto services within the Binance ecosystem.
The Binance Coin (BNB) Uses
- BNB is a utility token of the Binance and powers the Binance Ecosystem
- On the Binance Chain, Binance Coin (BNB) is used to fuel transactions
- On Binance exchange, Binance Coin (BNB) is used for paying for fees
- BNB is used for making in-store payments
- BNB is used for paying for services within the Binance ecosystem.
- BNB is used to purchase tokens other tokens on the Binance smart chain
BNB Markets/Exchanges
Since BNB operates on the Binance ecosystem, the main exchange that BNB can be traded on is the binance exchange with a lot of volume present. BNB can be traded on other exchanges such as Binance, Kucoin, FTX, Poloniex and Gate.io.
Equity Token?
Equity token is the final type of token I will be writing about in this post. An equity token is basically a type of security token or a subcategory of a security token that represents the ownership of an asset on the blockchain. Equity tokens can appreciate in value based on the success of the asset. Similar to shares, however, equity tokens operate on the blockchain. Investors who purchase equity tokens gain some level of ownership in the underlying asset and also represents the percentage of ownership in the underlying asset based on the number of tokens held. Investors can gain profits depending on the success of the underlying assets.
Benefits of Equity Tokens
- Equity tokens are considered safe because of their regulations
- Equity tokens give holders control
- Equity tokens retain their value based on the underlying assets.
BFToken
BFToken is a clear example of an equity token. BFToken is a platform that focuses on financial innovation and investment opportunities to investors by utilizing blockchain technology.
