Tokens, crypto assets, and cryptocurrencies: what are they, what are their differences and what can be done with them

There are more than 10,000 cryptocurrencies in the world and new ones are born every day. The variety is very wide and they need to be classified by at least one quality in common to guide investors and those who have just entered them to move into that universe.

The very creation of Bitcoin gave rise to the first watershed between cryptos: altcoins (for “alternatives”) are called all cryptos that are not bitcoin.

Then, the leaps in the prices of the crypto created by the enigmatic Satoshi Nakamoto gave rise to the denomination of “stablecoins”, an example of which can be Tether and TrueCoin, both backed by the US dollar, which was created to try to reduce the volatility of traditional virtual currencies.

The world of rankings does not end, however, with bitcoin, and altcoins and stablecoins. The trend towards the digitization of finance and the economy describes a larger universe where it is necessary to internalize about another classification in which, as in a game of Chinese boxes, one category surrounds another. This is the case of tokens, among whose different types are crypto assets that, in turn, contain within themselves cryptocurrencies, which are a special class of them.

Thus, tokens can be understood as a cryptographic token that represents a unit of value within a blockchain and that can be acquired in it to later be used to obtain goods and services. A token can be used, among other things, to grant a right, pay for work done or to be executed, transfer data, or as an incentive or gateway to related services or functional improvements.

A crypto asset, meanwhile, is a type of special token that is issued and traded within a blockchain platform.

Cryptocurrencies, with all their preponderance, are however one of the different existing crypto assets.

The most used classification of the moment divides them into seven types of crypto assets, where in addition to cryptocurrencies are the so-called utility tokens, which allow their owners to have access to various services offered by a platform that is based on a chain of blocks and they are characterized because, in theory, they are not created as investments.

There are also so-called security tokens, which allow paying for goods and services and generally ensure return on investment; token as assets, which represent the digital asset of an organization; share tokens that, as digital shares, represent the possession of shares in a company; Reward tokens, for their part, are tokens issued in the context of a loyalty program and dividend tokens, which are similar to stock tokens but instead of representing proprietary shares, they represent a percentage of the profits of said organization.

According to Alejandro Carrano, Marketing Director of GreenBondMeter, beyond the classifications, the perspective of the use and functionality of tokens depends a lot on the users, who are the ones who give the token the real utility. “Of course, the functionalities and uses of a crypto asset are determined in the design of the proposal, but the user gives the final conformation. Let’s take the case of bitcoin, which was intended to decentralize and democratize finance, but today, in practice, its price levels make each BTC cost a fortune, which is the result of the action of the demand and those initial purposes have been blurred”.

GreenBondMeter (GBM) is the global consortium that, with offices in Estonia and Uruguay, that supports GBM coin, crypto that aims to convert investors who acquire it into partners in an undertaking that seeks to take care of the planet.

“GBM has the essence of a utility token since those who own it can access products or services within a specific platform, where, among other things, they can also acquire carbon credits and have free satellite maps to see the evolution of the square meters that the investor is protecting. However, our crypto also has some cryptocurrency, because it works as a means of accumulating value,” explains Alejandro Carrano.

“I preserve it as an accumulation of value because what I am preserving is something very valuable and because by owning it I can buy the bonds with a preferential price and obtain a profit. That would be the, let’s say, the most monetary part of GBM”, he expressed.

GBM also has qualities of reserve of value and support that positively predispose it to the staking functionality, “although it is not a functionality that GreenbondMeter is evaluating to implement in its ecosystem in the short term,” they clarified from the crypto.

In GreenbondMeter they see their crypto as more suitable for staking, that is, to keep it in a wallet to receive profits or a reward.

“We are a utility token and as cryptos, we are stable and anchored to something physical and tangible, such as the square meters of land that is no longer deforested as, with each land acquisition that capitalization allows us, on that land, it stop felling. Without natural capital, there is no capital. In short, GBM furthermore be useful, is backed”, he warns.

GBM is, in this way, a particular kind of stablecoin since, in addition to its stable condition being inscribed in its design and objectives, it ties its stability to what is called “natural capital”, that is, its price is becoming inflated. as this natural capital, the basis of any economic activity becomes lacking due to the worsening of environmental problems.

Juan Nuñez, CEO of GreenBondMeter (GBM), explains that GBM’s performance is associated, not only with the reduction of the biosphere but “fundamentally with the willing of remedying this scourge with reliable instruments.”

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