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What is a Utility Coin/Token?

Not all crypto projects have it

The many uses of the Internet in the interlinkages of people, places, and things, and the tidal wealth of information is so unprecedented that users cannot but filter through to make the most of what the world wide web could offer or might simply drown under heaps and heaps of data. While in the scouring mode, many inadvertently stumbled upon a nascent disruptive ecosystem called the crypto world and chose to stay.

The Utility Token

One of the most unique features of every crypto project that arose is the creation of its own utility token. Think about entering a gaming machine arcade where you need to buy tokens in order to come across a variety of game machines within the gaming arcade. The same principle applies in the ecosystem of a blockchain or crypto project.

Token Representations

A token can represent anything from being a unit of value, a voting right, a stake, or to avail of a product or service. It can fulfill many other roles that the project may design. It can be different from cryptocurrencies like Bitcoin which functions as a currency beyond its own ecosystem. Other coins are created on top of a platform like Ethereum’s ERC-20 and utilize smart contracts.


There are certain roles that make a utility token gain value. First, the rights that give holders to navigate the ecosystem gives it an initial value. Another important task for utility tokens is the internal trading of values between holders in the confines of the ecosystem. Holders can gain rewards by the performance of tasks tokens undertake. Utility tokens can also act as a toll to enter and use some features of the company’s ecosystem such as its supercomputer. It can also give holders rights to enrich their experience such as by adding advertisements on the platform. It can also enable transactions to be performed as the tokens have a store of value. Utility tokens can be used to distribute the benefits and profits gained by the project.

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