According to bitpanda a security token should not to be confused with the security token that you need to access a sensitive network system such as a bank account. Also called an “investment token” or “equity token,” in the realm of blockchain technology a security token is a cryptographic token that is tied to a securities offering. A security token represents a share in the company issuing the token. Investors who buy such tokens hope to turn a profit from investing. Security tokens utilise the speed and efficiency of blockchain technology while benefiting from regulatory measures by governments offering increased protection from fraud.
Security token in crypto is not the same as the usual password you have for your social media, bank accounts and others.
How about utility tokens? Utility tokens serves a specific utility. A utility may be that tokens can be used on a platform to redeem a special service or receive preferential treatment to services. Utility tokens make up the majority of tokens issued in the scope of ICOs.
Utility tokens are primarily used by companies to raise interest in their products and for application in blockchain ecosystems.
Like "hey you can use this token to do this, so buy some now"
Photo from: bitpanda
