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  1. 1. What are these cryptocurrencies?
  2. 2. Bitcoin - the story of a technological revolution
  3. 3. Satoshi Nakamoto, who is the creator of Bitcoin?
  4. 4. Vitaly Buterin – the creator of Ethereum
  5. 5. What is blockchain, and how does it work?
  6. 6. What is an NFT token?
  7. 7. What is money?
  8. 8. Cryptocurrencies vs fiat money, which will win?
  9. 9. What is DeFi (Decentralized Finance)?
  10. 10. DeFi: opportunities, advantages and disadvantages of decentralized finance
  11. 11. What is an altcoin?
  12. 12. Stablecoins - What are they?
  13. 13. Cryptocurrency wallet - what is it?
  14. 14. Why do we talk about bull and bear markets?
  15. 15. Security in the crypto market - what rules are worth following?
  16. 16. What is the seed phrase in cryptocurrencies?
  17. 17. Dogecoin and memecoin - what are they?
  18. 18. What is a Ponzi scheme?
  19. 19. What is a Soft and Hard Fork?
  20. 20. Blockchain - examples of use
  21. 21. Is blockchain safe?
  22. 22. What are the types of blockchain networks?
  23. 23. What is blockchain network congestion, and how does it work?
  24. 24. Cryptocurrency wallets: Hot Wallet vs. Cold Wallet - key differences!
  25. 25. Cryptocurrency wallet diversification
  26. 26. Halving Bitcoin - what is it, and how does it affect the price?
  27. 27. Blockchain versus databases: key differences!
  28. 28. How do you transfer cryptocurrencies?
  29. 29. The most important cryptocurrency acronyms/slang you need to know!
  30. 30. The memecoin story: madness or great investment?
  31. 31. What is Ethereum? 
  32. 32. Everything you need to know about gas fees in Ethereum!
  33. 33. Gavin Wood: Blockchain Visionary and Co-Founder of Ethereum
  34. 34. Decentralized Apps – what are they?
  35. 35. What is Proof of Work (PoW) and what is Proof of Stake (PoS)?
  36. 36. What is the Proof of Authority (PoA) consensus mechanism?
  37. 37. What is Proof of Burn (PoB)?
  38. 38. What is a whitepaper? What is its purpose, and how do you write it?
  39. 39. Smart Contracts - what are they?
  40. 40. Know your customer (KYC) and Anti-money laundering (AML) what are they in the cryptocurrency industry?
  41. 41. Blockchain and NFT games - how to make money on them?
  42. 42. Liquidity in the cryptocurrency market
  43. 43. Inflation and its effects on financial markets
  44. 44. What is stagflation and why does it have a negative impact on the market?
  45. 45. What are utility tokens and what use do they have in the cryptocurrency sector?
  46. 46. What is cryptocurrency mining?
  47. 47. What is the mining difficulty?
  48. 48. What is compound interest, and how does it work?
  49. 49. What Are Privacy Coins and Are They Legal?
  50. 50. What is CBDC - central bank digital money?
  51. 51. What is Cryptocurrency Airdrop all about?
  52. 52. Key differences between ICO, IEO and STO
  53. 53. What are decentralized DAO organizations, and how do they work? What are DAO tokens?
  54. 54. What is EURT? How does it work?
  55. 55. What is the difference between Circulating Supply and Total Supply?
  56. 56. Snapshot from the world of cryptocurrencies - what is it?
  57. 57. What is the Fear and Greed index for cryptocurrencies?
  58. 58. APR versus APY: what is the difference?
  59. 59. What is an Initial Farming Offer (IFO)?
  60. 60. What is Regenerative Finance (ReFi)?
  61. 61. Who Is Craig Wright, the Alleged Creator of Bitcoin?
  62. 62. What Is Bitcoin (BTC.D) Dominance?
  63. 63. Michael Saylor, Self-Proclaimed Bitcoin Maximalist
  64. 64. Bitcoin Pizza Day
  65. 65. AI blockchain - a new look into the future?
  66. 66. What is WorldCoin? Everything you need to know about this cryptocurrency!
  67. 67. Azuki NFT collection guide: everything you need to know about it!
  68. 68. The 10 most expensive non-fungible tokens (NFTs) ever!
  69. 69. The Bored Ape Yacht Club (BAYC) - the story of the popular NFT collection!
  70. 70. CyberPunks - the story of the most popular NFT collection in the crypto industry!
  71. 71. NFT Art: The digital art revolution - history and examples!
  72. 72. Who is Changpeng Zhao, CEO of Binance?
  73. 73. Who is Brian Armstrong - CEO of Coinbase?
  74. 74. Who is Galy Gensler and the SEC? How does the Securities and Exchange Commission (SEC) affect the cryptocurrency market?
  75. 75. Web3's most popular social media platforms! Will they replace the platforms we know?
  76. 76. What is IoT - the Internet of Things?
  77. 77. On-chain analysis in the cryptocurrency world: Everything you need to know about It
  78. 78. Can you pass on your cryptocurrencies after death? How do you pass on a cryptocurrency inheritance?
  79. 79. What is the Howey test? What application does it have in cryptocurrencies?
  80. 80. The use of blockchain technology in the world of sport
Lesson 45 of 80
In Progress

45. What are utility tokens and what use do they have in the cryptocurrency sector?

As blockchain technology and cryptocurrencies gain popularity, different types of tokens are emerging, each with its own unique use. One such type of token is known as utility tokens. In today’s lesson, we will take a closer look at what utility tokens are, what uses they have, and why they are an important part of the cryptocurrency ecosystem. 

Enjoy the reading!

What are Utility Tokens?

It is a type of digital asset that has been created to provide a specific service or functionality within a particular project or platform based on blockchain technology. 

In other words, they are tokens that hold value, allowing access to certain resources or services within a specific cryptocurrency ecosystem.

Utility tokens are different from other types of tokens, such as security tokens or soulbound tokens, which have different purposes and functions. 

One of the main differences between utility tokens and other cryptocurrencies is that they cannot be mined. In the case of utility tokens, they are all created at the same time and then distributed in a manner determined by the creators of the respective project.

Utility tokens also help to create an internal economy for a project. They are often sold to raise funds for its creation or development.

The main features of utility tokens are:

  1. Functionality: Utility tokens perform specific functions within a given blockchain platform or project. They can be used to access services, purchase products, vote, participate in the ecosystem economy, or engage in other activities. 
  2. Utility tokens do not represent underlying assets, such as shares or raw materials, and do not give the right to participate in the profits of the company.
  3. Uniqueness: Each utility token is typically created with a specific project or platform in mind, meaning that its use is limited to that ecosystem.

Examples of applications for utility tokens

Utility tokens are used in various fields and projects based on blockchain technology. Here are some examples of their use that are worth knowing:

Voting and governance. Use token scan be used to vote within DAO (Decentralised Autonomous Organisations) projects or to manage a given ecosystem. Holders of these tokens can participate in decision-making processes and influence project development.

They provide access to specific services.  Some platforms offer various services that can only be paid for with these types of tokens. Examples include streaming platforms, online games or decentralised social networks.

Asset tokenisation. In some cases, utility tokens are used to represent real assets, such as real estate, art or investments. Through tokenisation, investors can purchase shares in these assets using just these tokens.

Some blockchain projects even allow for the delegation of resources in exchange for utility tokens. Examples include providing computing power, storage space or other resources in exchange for remuneration in the form of utility tokens.

Rewards and other facilities. Some platforms reward users with utility tokens for their loyalty or encourage the use of their services by offering rewards in the form of these tokens.

It is worth noting that the applications of utility tokens are extremely diverse and depend on the specific project or platform. Their role can vary significantly depending on the objectives and functions they are intended to fulfil in a given ecosystem.

Examples of utility tokens

In the ecosystem of cryptocurrencies, we will find many examples of utility tokens. Let’s look at some of the most important ones:

Basic Attention Token (BAT): Used in the Brave ecosystem, BAT allows users to tip content creators in the Brave browser or other applications that work with BAT.

Chainlink (LINK): Chainlink serves as a data provider (oracle) connecting blockchains to external service providers. LINK is a utility token used to incentivize node operators, remunerating them for their services, such as sending data to and from the blockchain.

ADA: The native token of the Cardano project, ADA is used to pay transaction fees in the Cardano ecosystem. ADA holders also receive rewards for staking these tokens.

MANA: A utility token used in the Decentraland Marketplace ecosystem, MANA enables the purchase and/or trade of virtual land and other goods within the project.

BNB: BNB is another example of a utility token, primarily intended for trading fees and transactions on the Binance exchange.

VET: The utility token for the VeChain project, VET is designed to transfer value between decentralized applications running on the VeChain blockchain.

Challenges for utility tokens

When starting your adventure with utility tokens, you need to consider a few things. Here they are:

  1. Challenges Utility tokens may be vulnerable to government repression. As a result, utility tokens will be treated, as securities. Such changes would effectively harm this type of token.
  2. Utility tokens are a catch-all for fraudsters. There have already been many cases in the cryptocurrency industry where the creators of utility tokens have conducted an ICO only to make money and disappear. In the cryptocurrency community, such behaviour is commonly referred to as rug pull.
  3. High transaction fees. Unfortunately, most utility tokens are built on the blockchain Ethereum. Consequently, this comes with high gas fees.
  4. Utility tokens are often used for speculation.
  5. The success and success of utility tokens is linked to the project as a whole. Utility tokens are only useful if they serve a particular project. If it fails, tokens then lose all their value and become useless to users.


Utility tokens are an important part of the cryptocurrency ecosystem, enabling access to a variety of services, functionalities, and assets within projects based on blockchain technology. Their unique use makes them a valuable tool for both blockchain projects and users who can use these tokens for a variety of purposes. As blockchain technology develops, it can be expected that the role and use of utility tokens will continue to grow and evolve with market needs.

However, it is worth bearing in mind their challenges and limitations. Despite their functionality, like any digital asset, utility tokens also have drawbacks. They are dependent on the cryptocurrency projects within which they operate. Without them, they are downright useless. So before you invest in utility tokens, take a close look at the project to which they belong.

Summary of today’s lesson:

  1. What is Ethereum?
  2. What is an NFT token?
  3. What are privacy coins?
  4. Everything you need to know about fee gas in Ethereum!