Crypto-Classification need to Know before Investing
Utility Coin: Coin known for usability, and functionality. Particularly, Ethereum Platform classify their Ether coin as a utility coin as it is used to “fuel” transactions associated with their platform requirements. These fuel costs are linked to the volatility of the underlying market value of Ethereum. It should be noted the speed of sending a transaction on this platform is linked to the senders threshold for cost. The faster the settlement the more “fuel” required. As the “fuel” is in fact Ether, the transactional costs can vary with speed and market volatility. This equates to the sender not actually knowing how much a transaction costs or even how long it will take.
Usage: Variable due to unusually high volatility
Value: Steady increase in market favor
Speed: Depends on platform, Bitcoin 24 hours, Ethereum depends on how much you wish to spend
Downside: Different day-to-day, heavy risk
Asset Coin: Stored Value Coin. Similar in nature to a corporate “share”, or other “wall Street” certificate of stock ownership, or “Bearer Bond”. Likely not to fluctuate as it has underlying value based on the asset backing the coin. Safe, reliable coin. What you see is what you get. Potentially redeemable, but contingent on issuer.
Examples: Saltcoin/Mineralcoin/ XGold
Usage: specific to financial plan
Investment: Stable, reliable, potential market hedge
Value: Potentially excellent at ICO. Potential to “cash-out” of crypto
Speed: Contingent on platform
Downside: low immediate reward.
Equity Coin: Equates to a Stakeholder / Shareholder position with rights to a portion of future profits of the coin issuer. This type of coin alerts the SEC to potential securities exchange violations. Risks are associated with lack of primary company knowledge in their performance and the risk of follow-through with the distribution of profits.
Usage: Buy and hold, and wait for share distribution
Investment: Low grade
Value: High risk unless company is established before issuing coin
Speed: Unknown, based on platform specifications
Downside: Payout are based on fiat, but more additional crypto
Reward Token: Pure gaming token and used by the gaming community. These tokens are great if you’re a gamer. Rewards aimed at up selling, and internal use. The value is in the eyes of the beholder, but in the real world they are only traded among other gamers. Zero cash value. Redeemable in “fun” time only.
Usage: high usage on internet gaming sites
Value: fun ONLY
Stable Coin: Pegged to a value source, thus reducing volatility, and expanding acceptability. Stable characteristics and suitable for unit of exchange. The concerns are centered on the value backing the coin. Like corporations, the coin is only as good as the underlying value. This type of coin is not a gamers option, and likely rides on own platform.
Usage: High usage if vendors accept
Investment: Low volatility
Value: Normally equal to the purchase price
Speed: Contingent on platform. Best performance on own platform
Downside: If riding on tier one platform, for example Ethereum, coin will have zero use due to prohibitive transactional costs.
Shitcoin: Pejorative term used to describe an altcoin that has become worthless, or was worthless in the first place. The shitcoin value may disappear because interest failed to materialize because the altcoin itself was not created in good faith, or because the price was based on speculation but, in fact, the coin and the underlying company that created the coin was nothing short of nonsense.
Usage: likely to be a gamer coin only
Investment: non traditional, likely gaming only
Value: hugely speculative, with no apparent upside
Speed: entirely unknown
Downside: complete loss of tangible investment, likely time poorly spent though subjective.
Kingcoin: The best coin on the market giving the most opportunity for utility, value, upside. Generally linked to an underlying commodity of known global significance. Good market option, and likely to stay course of time. Bankable, steady, reliable.
Usage: marketplace currency, usable, redeemable, cash-out
Value: stable, potential growth with market