* How do you distinguish and categorize any  token and investment as either a security or a commodity before investing?


While it's important to understand the products and markets before investing, Mostly when it comes to investing in cryptocurrencies, one should be able to distinguish a security from a commodity properly before any investment.
I found out about the 'Howey test', of which consist of four criteria which much be considered before anyone should decide to make a very reasonable investment decision.
 It would help a potential investor determine if an investment option, is a security or It is a commodity before one gets to make the final call on the investment of choice.
 The criteria includes;
* If it involves an investment of money,
* If there's an expectation of profit,
* If there's a common enterprise, and
* If there's a reliance on the effort of others.

The disparity between 'securities' and 'commodities' is made clearly visible with the explanations given below;

(A).
'Securities' are investments such as stocks, mutual funds, bonds, debt, and other interests in the form of shares in companies, governments, or private businesses.
 In a more general sense, the idea of 'Securities' is, financial abstraction, that is what one cannot see, just as stocks or bonds or debts that can't be seen in a physical sense, but it's there.

(B).
'Commodities' on the other hand, is a result of supply and demand in the real world market and basic goods such as wheat, gold, oil and cattle, that is, natural resources, agricultural products, are good examples of Commodities that a potential investor can invest in and make good profit from.
 Commodities can help when we decide to liquidate or withdraw some or all of our Bitcoin or altcoins kept in a wallet, that is, when we want to diversify an existing investment portfolio and are considering investing in physical, tangible assets. VM
However, it is to note that not all commodities are physical, tangible assets.

* Do you also know that Bitcoin is a commodity?
Under the Commodity Exchange Act (CEA), all
 Virtual currencies, such as Bitcoin, can be considered to be commodities.