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Crypto often feels like a Wild West of tokens, trends, and memes, but behind the chaos is a framework that helps investors understand it all. It has taken me some time to understand these concepts, but my background in finance and, more recently, Web3 computer programming has made them much easier to grasp.
In today’s post, we break down the four major types of crypto coins: commodity coins, stablecoins, utility coins, and memecoins. Understanding these categories can help you spot real value, avoid hype, and build a smarter portfolio. A portfolio that can accrue real wealth!
🪙 1. Commodity Coins: Digital Scarcity with Staying Power
Think of these as the “gold” of crypto.
Commodity coins are designed to be stores of value—assets you can hold long term, with a limited supply and no central issuer. Due to their deflationary nature, these would be considered buy-and-hold assets in traditional finance.
🔍 Key Traits:
- Scarce and durable
- Resistant to inflation (meaning they are deflationary)
- Decentralized and secure
- Used as money or collateral
🧠 Why They Matter:
Commodity coins like Bitcoin (BTC) aren’t just speculative assets. They represent an entirely new form of money—borderless, censorship-resistant, and programmed with a fixed supply. Hence, BTC has explicitly been WIJ’s priority. This article lets you get a condensed rundown of Bitcoin as an asset!
💡 Examples:
- Bitcoin (BTC) – The original and most trusted digital commodity.
- Litecoin (LTC) – A lighter, faster version of Bitcoin, but less widely adopted.
🧾 2. Stablecoins: The Dollar, Upgraded
These are the crypto equivalent of digital cash.
Stablecoins are pegged to stable assets—most commonly the U.S. dollar—to minimize volatility while enabling fast, programmable money movement.
🔍 Key Traits:
- Pegged 1:1 to fiat currencies
- Ideal for trading, remittances, or saving in volatile regions
- Come in custodial and decentralized forms
🧠 Why They Matter:
Stablecoins bridge traditional finance and DeFi. They’re the go-to tool for moving money globally, escaping unstable currencies, or earning passive income in DeFi.
⚠️ Risks:
- Centralization: Coins like USDC and USDT (the green coin at the top of this post) are backed by companies that can freeze funds.
- Depegging: Algorithmic coins like TerraUSD (UST) can collapse if poorly designed.
💡 Examples:
- USDC – Backed by reserves, issued by Circle.
- USDT – Widely used, but with controversial transparency.
- DAI – A decentralized stablecoin backed by crypto collateral.
The impact that stablecoins have already made on nations around the globe is astounding! They have been a haven for citizens in nations with volatile currencies worldwide. Here are a few that have benefited from their usage.
🌍 Stablecoins as a Lifeline in Volatile Economies
- 🇦🇷 Argentina
- Persistent hyperinflation and strict capital controls have made the Argentine peso unreliable for savings. Argentinians turn to USD-backed stablecoins like USDT and USDC to store value and make purchases. High usage is reported on platforms like Binance and Buenbit, where stablecoins are used for savings and everyday transactions.
- 🇻🇪 Venezuela
- The bolívar has suffered one of the worst hyperinflation crises in recent history. Stablecoins provide a more stable alternative to the collapsing national currency, acting as a digital form of USD. Tools like Airtm and stablecoin-supporting wallets are widely used for remittances, payroll, and savings.
- 🇹🇷 Turkey
- The Turkish lira has rapidly lost value due to inflation and controversial monetary policies. Citizens use stablecoins to hedge against devaluation and access global financial tools. Turkey consistently ranks among the top countries in crypto usage, with stablecoins often leading trading volumes on local exchanges.
⚙️ 3. Utility Coins: Fuel for Blockchain Economies
These are the lifeblood of smart contract platforms.
Utility coins give users access to services on a blockchain—like paying transaction fees, staking, or using decentralized apps (dApps).
In other words, they are coins with an intended purpose, and you wouldn’t necessarily hold them long term unless you knew big projects (applications, video games, etc.) were being developed on the specific blockchain that would cause massive amounts of activity.
The increased activity would create demand for the utility coin, which would increase the coin’s value due to the number of transactions taking place on the specific blockchain.
🔍 Key Traits:
- Tied to specific platforms
- Often inflationary (though some use burn mechanisms)
- Not meant to be a store of value
🧠 Why They Matter:
Just like gas powers a car, utility tokens fuel the networks where innovation happens. From decentralized finance to NFT platforms, utility coins enable blockchain ecosystems to operate.
💡 Examples:
- ETH (Ethereum) – Pays for gas fees on Ethereum.
- BNB (Binance Chain) – Powers Binance Smart Chain and gives users trading perks.
- MATIC (Polygon) – Reduces transaction costs on Ethereum Layer 2.
🐶 4. Memecoins: Speculation Meets Community
These coins started as jokes, but some now hold billions in market cap.
Memecoins are community-driven tokens that gain value through culture, memes, and momentum rather than utility or fundamentals. I personally am not a fan of these, much like penny stocks, they are essentially gambling from the aspect of wealth creation.
These coins can be great if you want to be a part of a community, but for making money, these are not the coins for it. I would hit the slots in Las Vegas before any cash was deployed here. Recent developments have allowed these coins to be used for real-life purposes, such as the American Cancer Society accepting Dogecoin as a donation.
🔍 Key Traits:
- Viral and social
- Extremely volatile
- Often lack development or clear roadmaps
🧠 Why They Matter:
Memecoins like Dogecoin (DOGE) and Shiba Inu (SHIB) are speculative by nature, but they’ve proven the power of online communities. Some are now evolving to add real-world use cases or DeFi integrations.
💡 Examples:
- DOGE – Started as a joke, embraced by Elon Musk, now accepted by some merchants.
- SHIB – Gained a massive cult following and launched its own DeFi ecosystem.
- PEPE – A newer entrant built entirely on internet meme culture.
🧠 Final Thoughts: Know What You Hold
Not all crypto coins are created equal.
Some are engineered to preserve wealth, others to power networks or replicate dollars. Some are memes with massive upside (and risk). As a crypto investor, understanding what type of coin you’re holding—and why—can be the difference between a smart bet and a blind gamble.
As this space matures, the lines between categories may blur. You’ll see memecoins gaining utility, stablecoins integrating across chains, and utility tokens trying to become more scarce. But the four-category framework remains a reliable compass for navigating crypto.
What are your favorite coins and why? The WIJ community would love to heat it in the comments!
