Hey that's a great question. I've wondered about that myself as we launched our own Blockchain Platform (carmel.io) and it's not so much about whether you're selling the tokens or not. You could definitely sell Utility Tokens. For example, the EOS token is an utility token and they're selling them.
A utility token is essentially a token that can be used for something tangible in your product - not just act as a currency that people trade. Yes, we can trade utility tokens just like security tokens, but what makes them different is the fact that they unlock some specific use case in your product.
Think of a Bitcoin, the ultimate security token. It does not lock any functionality in any product. It's just a form of money, a currreny - ie. a security token.
But think of the EOS token for example. It unlocks bandwidth in the EOS Blockchain. If you own EOS tokens then you can exchange them for bandwidth. That's a powerful example of a utility. So think of bandwidth as the primary utility (value) behind an EOS token.
Or take our Carmel Token as another example. A Carmel Token in our economy represents Learning Value. You can exchange Carmel Tokens in our product for Carmel XP (experience points) which you can unlock through a Proof of Learning mechanism that verifies the fact that you have indeed learned something.
So EOS Token -> Bandwidth. Carmel Token -> Learning.
There's many other examples but the key question to ask is - what's the value behind the token? If you can answer that - ie. if there is a tangible value associated with that token - then my friend, that's a utility token.
Hope that helped a bit. You can read more about our Carmel Token Economy here: https://carmel.io/whitepaper/economy for a lot more info on how we look at the whole concept.
