7 Types Of Cryptocurrencies (Part 3)

in cryptocurrencies •  7 years ago 

Introduction

The Cryptocurrencies sector is a fairly new field. So little research has been done to understand it well. I believe that the classification of cryptos is an important step towards that. After spending about 2 years of reading and researching cryptos, I have come up with this taxonomy. I believe that cryptocurrencies can be classified into 7 major types:

  1. Currencies.
  2. Platforms.
  3. Asset-Backed.
  4. Infrastructure.
  5. Equity, Share, Power.
  6. Applications.
  7. Scams.


7 Types Of  Cryptocurrencies - part3.jpg

I have talked briefly about the first three in Part 1, and I have explained the fourth type (infrastructure tokens) in Part 2. In this article, I would like to talk about the last three types.


line2.jpg

5- Equity, Share, Power

Some of these coins give the owner some kind of ownership of the project. It is like a share of the company. Other tokens would give you a share of the profit only, not ownership. An example of such tokens is the KuCoin Shares token (KCS) issued by the KuCoin exchange. The exchange gives the owners of KCS a share of the fees they collect.

Another interesting example is Primalbase. Primalbase is targetting the office rental market.


primalbase.jpg

Owning a Primalbase token entitles you to a lifetime membership in one of Primalbase's coworking spaces. If you did not need the workspace, you can always make money by renting your token.

Some coins give you management powers. They let you vote on important decisions. The perfect example of this is Steem. The more Steem you have the more power you get. Bitshares and EOS share the fundamental concept too.

Another important example is the NEO token. According to the NEO white paper:

NEO has two native tokens, NEO (abbreviated symbol NEO) and NeoGas (abbreviated symbol GAS).
NEO, with a total of 100 million tokens, represents the right to manage the network. Management rights include voting for bookkeeping, NEO network parameter changes, and so on.


line2.jpg

6- Applications

Those are projects that run on top of platforms like Ethereum. They use the resources made ready by the platform instead of building their own blockchain. Most ERC-20 projects fall into this category. Waves platform has been active in this area too.

Some interesting examples include:

  • Games projects like Crypto Kitties
  • Financial projects like Populous and Veritaseum.
  • IoT projects like Waltonchain and VeChain.
  • Prediction prjects like Augur.
  • Advertisement projects like Basic Attention Token (BAT)
  • MyTrackNet which is a blockchain-based geo-tracking application.
  • Decentralized computing projects like Golem.

Those are just examples. The list of such would be so long. The blockchain technology offers excellent solutions to many problems. So, many companies and startup are trying to benefit from it.


line2.jpg

7- Scams

Those are projects that you need to be careful from. The most obvious example is BitConnect. Other noticable examples include Ifan and Pincoin. Those two scam projects were able to steal an alleged $660 million in tokens.

The golden rule here is: If it is too good to be true, it probably is.


line2.jpg

The Line Between The Types Is Fuzzy

Many crypto projects have the qualities of more than one of these seven types. For example, ETH is a platform and a currency. Our beloved Steem falls into the Power and the Applications category. Moreover, the SBD token is so similar to Asset-Backed coins. In addition, with the inception of SMT's, it will become a platform!


line2.jpg

If you liked this article, please upvote, follow and resteem. Please, share your thoughts in the comments too. I usually upvote good comments. However, do not spam. You will probably be flagged.


Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

The scam category can include projects with ever delayed road maps and excuses for all of it. Basically anything associated with JANs DPOS cartel.

The scam category can include projects with ever delayed road maps and excuses for all of it.

Yes, I agree. Thank you for pointing that out.

Great post my friend.

Thank you for this guide :- ) I learned a lot. I also read this article which you may find interesting to read

Thank you. I will check it out.

You're welcome!

Nice breakdown.

I try to only invest in the scams, because I think they represent the most opportunity.

:D

This should help educate all those people that refer to every cryptocurrency as that bitcoin thing.

In the beginning, I used to be like that. I really believe that whoever wants to invest money in cryptos, must invest some time first in learning about them.

@sadekj I love how scams get their own category. Hopefully these get weeded out in the next few years. People were acting in their own self-interest and profiting off of them. I think now people will want the longevity of crypto values and will be more keen to point out the garbage to highlight the solid platforms.

Hopefully these get weeded out in the next few years

I really hope so. Those scams have done too much damage already.

Great share, I find it surprising of investors/newbies getting scammed from Bitconnect when there has been numerous warnings of Bitconnect being a scam @sadekj

Oh, me too. But then, the promise of becoming wealthy over-night does blind people.

hahahaha, that is a very good point my friend! @sadekj

good content on cryptocurrency,,,upvoted

Very informative, I must read your part 1 and 2 now. I'm personally sticking with the infrastructure plays like ripple, stellar, neo, eos and of course Steem.

Can you elaborate on how SBD becomes an asset backed coin with inception of SMTs?

Thank you, @rollandthomas. I am glad that you liked it.

I'm personally sticking with the infrastructure plays like ripple, stellar, neo, eos and of course Steem.

I agree. Those are very promising.
BTW, I am planning to write a post about which type is the best for investment in the current phase.

Can you elaborate on how SBD becomes an asset backed coin with inception of SMTs?

I meant that the Steem project will become a platform. As for SBD, it is already intended to have a minimum value of $1. So it is very similar to Tether's TUSD.

Haha! Scams type of cryptocurrency is very popular. I love the humor!

Yeah!
Unfortunately, It is only funny if you did not get scammed!

A very interesting series of articles. I’ve been researching cryptos for about 5 months and noticed all the variety but hadn’t noticed the patterns that categorise them into different types.

Thank you, @steddyman. I am happy that you find it useful.

whats's type of Medicalchain crypto?

I think it would be an application project (No. 6)

Good post about cryptocurrencies. I read it. I learn many new information

Yeah dude you are right but I always like short term

From my experience, long-term investment is much more profitable.

Great the explanation!

Great article, you deserve an invite. On the Best Crypto Wallet with 25% discount CryptoPay.

1 -gB_2M6S7nQdP1w_Wl5sqQ.gif

Good luck and prosperity!

#7. lol! Not enough people call out scam as its own type, but more people should.

You have a minor misspelling in the following sentence:

Other noticable examples include Ifan and Pincoin.
It should be noticeable instead of noticable.

who needs grammarly, we got you

Loading...
  ·  7 years ago Reveal Comment