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Cryptocurrencies and non-fungible tokens have been gaining a lot of traction among the general public lately. However, they’re not the only blockchain innovations out there.
One unique application of the blockchain is the utility token.
As TechTimes explains, utility tokens are a kind of cryptographic token designed to give users within specific ecosystems access to exclusive products, services, or benefits.
The utility tokens that exist today can be used to buy platform discounts, commodities, and even exclusive fan club merchandise.
Below, we’ll go over the many different ways organizations use utility tokens.
Perhaps one of the most popular examples of utility tokens is the Binance Coin, a token offered by the popular cryptocurrency platform Binance.
Binance is already known for its low transaction fees, but the Binance Coin takes this even further.
When traders pay for transaction fees using the Binance Coin, they pay less than what they would if they paid with any other currency.
Unlike other utility tokens, the Binance Coin can be used as currency outside the Binance ecosystem, and it is already being accepted by service providers in the hospitality and travel industries.
Another popular utility token is the decentralized storage provider Filecoin. Users can use Filecoin tokens to rent storage space from other users within the network.
As a peer-to-peer network, Filecoin doesn’t rely on middlemen like governments or other authoritative bodies.
This means that nobody can censor the files that get sent out.
Additionally, Filecoin lets users store their data on decentralized networks, which are less vulnerable to cyber-attacks.
Fan Tokens were designed to help members of sports clubs, entertainment fan clubs, and other fan organizations create meaningful interactions with the groups they support.
Powered by the cryptocurrency Chiliz on their app Socios, fan tokens can be purchased to gain access to an organization’s encrypted ledger of exclusive fan benefits, which include merchandise and invites to events and games.
The main appeal of fan tokens is that they allow holders to vote on official polls, which give them a stake in minor team decisions like starting lineups and goal music.
Today, the most popular fan tokens come from the world’s top football teams, such as Paris Saint Germain, Manchester City, and FC Barcelona.
Brendan Eich, a co-founder of the popular browser Firefox, plans on using utility tokens to reduce digital advertising’s reliance on third-party trackers.
To do this, he developed the Basic Attention Token($BAT), a utility token advertisers can use to buy ad space and user attention on Eich’s new browser, Brave.
Users can also earn $BAT themselves when they choose to view ads on the browser.
Users can use their earned $BAT to access exclusive content from their favorite content creators.
Utility tokens being embedded in gaming is something everyone has been foreseeing and many attempts to integrate the two have been made.
The Sandbox ($SAND) is a major example of capitalizing on cryptocurrency within gaming.
The $SAND token can be used to purchase services, trade, play and govern inside The Sandbox ecosystem.
This includes purchasing LAND and form ESTATE as well as exchange with user-generated content.
As with any asset that operates on the blockchain, investing in utility tokens comes with a certain degree of risk.
Unlike cryptocurrencies, which can be used for a variety of different transactions, utility tokens are tied to specific ecosystems.
This means that their value will rise and fall depending on the performance of their ecosystem.
If you want to keep your capital safe, it's best to invest in utility tokens that are tied to organizations with stable performance.
You’d also get the most out of your investment if you benefit from the privileges offered by your utility token of choice.
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