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What Is the Difference Between Crypto Tokens, Currencies, and Commodities?

The world of cryptocurrencies is awash with technical jargon. As a result, several words are often used interchangeably without much thought to their meaning. This can become problematic for investors interested in understanding and putting money into the crypto market.

Cryptocurrencies, crypto tokens, and crypto commodities are, perhaps, the most misunderstood troika of words. One stands in for the other in interviews and discussions. But all three mean different things. That difference becomes important within the context of establishing a valuation framework for investment. For example, cryptocurrency valuation is derived from a coin’s success in adhering to the characteristics of money. On the other hand, crypto token valuations depend on a different set of factors, such as protocol adoption and robustness.


Here is a brief primer on the differences between cryptocurrencies, crypto tokens, and crypto commodities.


Cryptocurrencies

Cryptocurrencies present one of the most exciting investment options in the markets today. The term is used to refer to coins that fulfill characteristics of standard paper-based money. The characteristics are its function as a store of value, unit of account, and fungibility (or the ability to be used regardless of its history of transactions).