Due to the crypto-boom the terms “token”, “coin”, “initial coin offering” (ICO) and various others have become an integral part of the vocabulary of every trader and investor. Their use often leads to uncertainty and confusion.

The most common types of tokens:
Payment tokens: These tokens are used as a means of making payments and storing a value.

Usage Tokens: This type of token was created by the introduction of Ethereum. This type gives the holder access to products or services on a specific platform or network. They have various functions and are based on a given block chain like Ethereum and in most cases can only be used within the prescribed network.

Security tokens: Embody the promise of potential investment returns and value appreciation. Because of their high quality, they have been classified as securities by some market participants and regulators, most notably by the U.S. Securities and Exchange Commission (SEC), which acts as the exchange supervisory authority. They construct an investment contract and have the potential to generate profits, passive income and dividends.

Investment Tokens: A digital representation of an asset within an organization.