Essence of Tokens in Cryptocurrency World!
The Tokens are similar to a coin, the difference is that tokens do not have a legal value and therefore, we can not use it to pay something. Tokens can be traded and hold to earn interest by Staking. Tokens are more specific to a general use and considered as value asset. However, tokens if they have value within the Blockchain platform and we can turn it into legal money.
The Tokens can be classified into three types:
Utility Token
Security Token
Equity Token
The Security Token is a representation of a traditional financial asset within a Blockchain. This offers the person who acquires it, a participation within the company that issued it and these token acquire their value from this company. Its objective is to offer similar rights to traditional actions to a broad audience. We can summarize it as the union of a company's actions and a cryptocurrency of a lower cost.
The Security Token is an instrument widely used today and is expected to grow in the coming months. Because ETAS fall into the regulation of assets, companies are responsible for presenting the documentation and guarantees of these tokens. In addition, they can be offered through an ICOS without any problem and the future will bring certain benefits. These tokens were created as an investment method, therefore, when the company that issued the tokens receive benefits, the owners of the Tokens are part of the benefit (plus tokens).
An example of the Security Token is TZero which is a project proposed by the Overstock retailer, which its objective is to develop a solution for all those problems related to the liquidity of the tokens. However, the ICO takes enough to get investors, this may mean that the project was not very reliable.
The company began selling agreements for future actions, that is, safes. Which allowed him to get money out of traditional markets and gives investors certain features of convertible bonds and buy digital location receipts for Blokchain. Although still the future of this cryptomon in uncertain despite the great objectives it has.
Utility Tokens
Also known as "User Token", these allows the user to access future products and / or services than from the company, but it is not a token used for investment, since many countries have no regulations for it. Its objective is to serve as a resguardation of participation in mass sales and thus gather capital in a project. It is the way to access some value product, but this is not guaranteed.
For the use given to Utility Token there are many doubts or speculations therefore there is an irrigation framework which the user must be informed. For example, there has been a case of cryptomoned projects that ensured to achieve difficult goals to imagine and so there is little several investors have lost their money. Another negative thing is that if the project fails the token stop having value.
An example of these is Basic Attention Token (BAT) which allows access to several BAT services, such as the BAT is used as a means of payment for creators of content and so these creators will be supported. This is driven by the Brave Browser. The Token is distributed to users depending on their creativity and the good capture of attention from other users.
Also users earn Bat through this browser only with using it and as a private browser is saved when there is no advertisements. Although the BAT can also be used in Binance without any problem and is currently one of the most successful today.
Equity Token
This is related to the Security Token and represents the property of an asset in some company and like the Security Token, you are regulated in many countries, but these regulations are more flexible, so, many people prefer to use them. Whoever has in its possession the Equity Token have somewhat properties of their investments, which each token is a percentage on the property they have.
With these companies can the actions and voting rights over the Blockchain, with the aim of doing more dynamic the market and it is a guarantee that you have something. It is designed for small projects that need small amounts of money. They are also interchangeable and administered by a regulatory body.
An example of this is DAO which is a new way of organizing and operating organizations using Blockchain, this is handled with computational algorithms and has no regulations because it is decentralized. The DAO plan to change the way in how we cooperate humans and computers.
Some of the most well-known DAO in the The Dao project launched in 2016, which its goal is to build the largest DAO with the help of Ethereum. However, shortly after a hacker managed to take 50 million dollars and there he learned about vulnerability of the code that handles Dao and so many people stopped investing in it.
Like many things in the cryptocurrency world, the tokens have given us many benefits to us as users of a Blockchain, but there are still some doubts or ignorance about this world, which makes users have errors and in some cases a big lost of money. My advice would be that before investing in Tokens projects you must have the necessary knowledge to be able to move easily.
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