A Better Taxonomy for Cryptocurrencies

A simple classification to help make sense of the gazillion coins

Updated June 2020: In the past two years since the original article has been published, we’ve had crashes and recoveries but the crypto industry continues to grow and develop. It has also been a period where weak hands (and organisations) have been uprooted, but what’s interesting is the ones that have withstood the test of time and how the concepts below remain valid. There’s never a better time to start learning and to get involved in this space.

Over the past months of looking into different cryptocurrencies, I found it difficult to remember what each one of them does. Furthermore, there can be several coins/tokens that aim to tackle the same problems or the same industry, and these all add to the confusion.

Typical classifications of cryptocurrencies I found online gave an overview of the top coins, or grouped them as coins, tokens and securities, which were inadequate. Hence, I came up with a system of categorisation that supports my interest in different alternative coins (altcoins), which helps me to classify my portfolio and keep track of my learning and understanding of what each cryptocurrency is about.

Token Classification Table

The term “currency” in cryptocurrency denotes a system of money, but cryptocurrencies today have broader uses beyond their payment utility. Hence, “coins” or rather, “tokens” might…