The cryptocurrency world is one of the spheres of business that is among the hardest to grasp, even for the so-called experts in the industry. At a time like this there are over 1500 distinct products, coins and tokens, each with its peculiar features and backing technology, and each claiming to solve one problem or the other.
Among the biggest sources of mystery for the general public is what makes a cryptocurrency the likes of Bitcoin, Litecoin and Dash and what makes a utility token?
Difference between a Coin and a Utility Token
A typical cryptocurrency, which Bitcoin is the first among, is a decentralized digital currency that is built to specifically serve the purpose of being an alternative means of exchange for goods and services that does not require the service of a bank or any other kind of middleman. A crypto coin is a dedicated currency that serves no other purpose and which does not represent shares of any kind of entity.
A Utility Token on the other side is a digital asset that is often also misconceived as a typical cryptocurrency. A utility token serves as an access asset with which an individual can enjoy the services of a particular platform that is also built on the blockchain technology. Unlike coins, utility tokens differ widely in their purpose and usage, as the different platforms offer different services and different modes with which their tokens operate. From paying for energy bills to accessing dental care, utility tokens have a more limited scope of use as they operate mostly within a specific niche, unlike coins like Bitcoin which are universally accepted across the cryptocurrency industry, and the mainstream businesses that accept the digital assets for payment