Introduction
Cryptocurrency has seen an explosion in popularity as different industries and companies start to adopt blockchain technology. As part of this wave, different coins are being created to target specific markets and uses. Two of the popular types are Social Media Coins and Other Utility Tokens. But what are they, and how do they compare?
Social Media Coins
Social media coins are digital tokens that are tied to user-generated content on a social media platform, which can be rewarded to creators as a form of appreciation. Some popular social media coins include Steem, Hive, and Reddcoin.
These social media coins are designed to reward users who create and curate content on their respective platforms. These tokens have a real-world value and are traded on many popular exchanges.
Other Utility Tokens
Other Utility Tokens are digital tokens that are used as a form of payment or access for specific products or services. These tokens are not tied to social media platforms and create their own ecosystem for their target market. Examples of these tokens include BAT (Basic Attention Token) for online advertising, GNT (Golem) for renting computer processing power, and MKR (Maker) for managing Dai, a stablecoin.
These tokens are used to create different applications within blockchain technology and have a real-world value in trading.
Comparison
When comparing social media coins and other utility tokens, there are some factors to consider:
Market Cap Comparison
The market cap of a cryptocurrency is a measure of its popularity and market value. A higher market cap usually means that the token is more adopted by users and investors. According to CoinMarketCap, the market cap of social media coins is relatively low compared to other utility tokens. At the time of writing, the top 10 social media coins have a combined market cap of around $70 million. In contrast, the top 10 other utility tokens have a combined market cap of around $32 billion.
Popularity Comparison
Social media coins are popular among content creators and bloggers due to their ability to monetize their content. According to SimilarWeb, social media platforms that use these tokens have millions of users, with Steem having around 1 million monthly active users. In contrast, other utility tokens are used in more niche markets and have smaller user bases.
Price Volatility Comparison
The price volatility of a cryptocurrency measures how stable its price is over time. Utility tokens are known for having higher volatility than social media coins due to their dependence on the broader market. However, social media coins are not immune to price swings, as they also face market and adoption challenges.