What's a Utility Token?

[EvaGC]

When we talk about our ICO, we get this question very often, particularly from those who are new in the crypto-world and have chosen us as a first ICO.

In case you want to know:

A utility token represents access to a future product or service. When you buy a utility token, you are buying your “right” to use a service that’s being developed by a company or start-up, once it’s finished and launched. An ICO for utility tokens is often used to raise funds for the development of a project.

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[z0mmarket]

When we talk about our ICO, we get this question very often, particularly from those who are new in the crypto-world and have chosen us as a first ICO.

In case you want to know:

A utility token represents access to a future product or service. When you buy a utility token, you are buying your “right” to use a service that’s being developed by a company or start-up, once it’s finished and launched. An ICO for utility tokens is often used to raise funds for the development of a project.

Can dividend also be counted as utility?

[HeRetiK]

When we talk about our ICO, we get this question very often, particularly from those who are new in the crypto-world and have chosen us as a first ICO.

In case you want to know:

A utility token represents access to a future product or service. When you buy a utility token, you are buying your “right” to use a service that’s being developed by a company or start-up, once it’s finished and launched. An ICO for utility tokens is often used to raise funds for the development of a project.

Can dividend also be counted as utility?

If the utility of a token is merely to pay a dividend, then it's not a utility token. It's pretty much an unregulated security at that point. At least I wouldn't expect the SEC to classify such a token as a utility token but rather as a security.

[r00tmachine]

When we talk about our ICO, we get this question very often, particularly from those who are new in the crypto-world and have chosen us as a first ICO.

In case you want to know:

A utility token represents access to a future product or service. When you buy a utility token, you are buying your “right” to use a service that’s being developed by a company or start-up, once it’s finished and launched. An ICO for utility tokens is often used to raise funds for the development of a project.

Can dividend also be counted as utility?

Not as the primary use- otherwise it is a security. But, you can still fall in line with utility if it's overwhelming used for a specific purpose. Think arcade tokens or loyalty points- if it doesn't look like that, regulators won't see it that way and will want it registered as a security in the US and UK.

[PJFry]

So participating in an ICO, I am not purchasing part of the company.  Correct?

[mosley1974]

So participating in an ICO, I am not purchasing part of the company.  Correct?

Generally, no. You're buying a token- it's not stock, it generally has no voting rights. You are purchasing part of their economy though and that is probably the more valuable bit.

[MintDice]

What goes along with this are security tokens, which allow for the potential for a wide variety of applications, the most promising of which is the ability to issue tokens that represent shares of company stock.

[Cryptoooo71]

If i have token from company that means i own share of the company right ?
 

[neo444]

When you earn token you can sell them for ethereum then you can exchange that to money or any other cryptocurrency so you can earn money from token that the utility of token

[zacxavier]

When we talk about our ICO, we get this question very often, particularly from those who are new in the crypto-world and have chosen us as a first ICO.

In case you want to know:

A utility token represents access to a future product or service. When you buy a utility token, you are buying your “right” to use a service that’s being developed by a company or start-up, once it’s finished and launched. An ICO for utility tokens is often used to raise funds for the development of a project.

You are on point.

[Andalin]

If i have token from company that means i own share of the company right ?
 

No, it just mean you have the token, it has nothing to do with a share of the company

[dongamk]

And utility tokens have really great potential. Have a look at WABI, BNB, INK etc. Feel free to add others.

[Cryptoooo71]

If i have token from company that means i own share of the company right ?
 

?

[Darerando]

Utility token, often called user token or coin apps, provide users with future access to a product or services.

[HabBear]

Can dividend also be counted as utility?

Sure!

Are there any tokens paying a dividend?

The utility means "the useful/meaninful purpose the token provides to the market". It could be as a means of exchange (currency), a store of value (asset), a repository of information, a tracker of ownership, the list goes on. And what is good utility to one person may be poor utility to another.

[birzh0]

something like futures contracts...

[nextpakk]

Don't dismiss the value of a utility token. Projects with real world application solving a real problem will bring value not only to the token but it will bring value to the world as it's leveraged to make things better for others. If you're looking into utility tokens find the ones with a real product solving a real problem. Should you do that, you will find and see the value of the utility tokens.

[arvindjais1234]

When we talk about our ICO, we get this question very often, particularly from those who are new in the crypto-world and have chosen us as a first ICO.

In case you want to know:

A utility token represents access to a future product or service. When you buy a utility token, you are buying your “right” to use a service that’s being developed by a company or start-up, once it’s finished and launched. An ICO for utility tokens is often used to raise funds for the development of a project.

Though I am a newbie but gather some useful information which I would like share below:

Utility tokens, often called app coins or user tokens, provide users with future access to a product or service. An example of a utility token is the Basic Attention Token (BAT).

Utility tokens are not designed as investments; however, many people contribute to utility token ICOs with the hope that the value of the tokens will increase as demand for the company’s product or service increases. Utility token price fluctuations can be compared to those of sporting event tickets.

[edundayo]

Can dividend also be counted as utility?

The direct answer will be a NO!

Getting a dividend probably mean you'r classified as a shareholder, which is why you get a share of the project's profit as dividend. In which case that will be classified as a Security Token (regulated or unregulated).

Like @EvaGC already correctly explained; Utility Token only has to do with "access" or "right" to use a service/product and commonly with some benefits like lower/zero fees.

Personally, I believe it will not matter even if a token looks like a utility, now that the SEC is involved, once it has an element of a security, it will be classified as either a regulated or an unregulated security.