Crypto tokens are cryptocurrencies that have been issued on a blockchain network, serving various purposes within their ecosystem.

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What Are Crypto Tokens?
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Crypto tokens are cryptocurrencies that have been issued on a blockchain network,
serving various purposes within their ecosystem. Usually, crypto tokens and coins are
referred to by different terms: a coin is a cryptocurrency that has its own blockchain while
a token is usually issued on another blockchain, like Ethereum or Cardano, and doesn’t
have its own blockchain system.
What is an ERC-20 token?
ERC-20 is a token standard on the Ethereum blockchain, meaning each token that is
labeled as an ERC-20 token is following a specific set of specifications. Ethereum
blockchain provides a platform for different companies and projects to issue their own
cryptocurrency for their business purposes.
ERC-20 tokens are usually issued for different applications that run on the Ethereum
blockchain, called Decentralized Applications (DApps). Through these tokens,
applications can offer various services and interact with blockchain technology.
ERC-721 is another token standard on the Ethereum blockchain that is used for issuing
Non-Fungible Tokens or NFTs. NFTs can be issued as the unique digital representation of
anything, from artwork to luxury items, fan cards, or digital files.
What are crypto tokens used for
Crypto tokens can be used for different purposes. Many applications issue their own
crypto tokens to serve their users, an alternative to conventional royalty points. These
tokens allow users to enjoy discounts and other benefits while using the services within
the application.
Crypto tokens can also be used for governance, meaning token holders can participate in
decision-making processes through voting. They can also be used for the digitalization of
financial assets or other real-life items, bringing them to the blockchain system.
Different types of crypto tokens
Based on their utility and features, crypto tokens may fall under different categories. Here
is a list of different coin and token types:
Stablecoin
Stablecoins are cryptocurrencies whose price is tied to the price of another asset, like fiat
currencies (e.g. US dollar) or precious metals (e.g. gold). For this reason, stablecoins are
less volatile than other cryptocurrencies.

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As one of the top stablecoins on the market, Tether (USDT) has been pegged to the US
dollar for quite some time. If you check its price history, it’s always been close to $1.
Altcoin
Alternative Coin (Altcoin)
Bitcoin lead to the creation of many other crypto assets. An altcoin is any cryptocurrency
other than Bitcoin, such as Ethereum or DIFX Token.
Privacy Coin
In privacy coins, like Monero, transaction information is hidden from everyone except the
parties involved by using privacy-preserving techniques. Bitcoin and Ethereum, which run
on a public blockchain, let you view a network’s transaction history just by knowing its
address.
For example, Vitalik Buterin, the founder of Ethereum, revealed his address in a tweet. If
you know it, you can see the balance and history of transactions.
CBDC
Central Bank Digital Currency (CBDC)
The CBDC is a kind of digital money that is issued by a central bank or government.
Although it’s not a cryptocurrency, it attracted a lot of attention from governments and
central banks after the cryptocurrency boom.
The European Central Bank is planning to introduce its own CBDC, the Digital Euro.
Utility token
Generally, utility tokens serve a variety of purposes within a specific application or
platform. For instance, the DIFX token is a utility token for the DIFX exchange and offers
discounts and stakes.
Governance Token
It’s a cryptocurrency that lets users vote on platform governance. Token holders gain the
right to vote based on how much they invest.
For instance, DOT holders can participate in protocols’ special events.
Shitcoin
A cryptocurrency that doesn’t provide any specific function and has little or no value.
Security Token

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In a blockchain network, security tokens are like real-life securities. Blockchain Capital
(BCap) is a good example.
Securities are tradable financial instruments, like stocks or bonds. Blockchain technology
has led some companies to issue their stakes on the blockchain as well.
Wrapped Token
In the same way that stablecoins are pegged to a fiat currency like the dollar, wrapped
tokens are pegged to another cryptocurrency.
For example, Wrapped Bitcoin (WBTC) runs on Ethereum and tracks Bitcoin’s price.
Meme Token
It’s a cryptocurrency based on internet memes and is mostly community-driven. Dogecoin
and Shina Inu are two examples.
It’s a good idea to seek professional advice before investing in meme coins because their
prices may fluctuate sharply.