Smart Tokens - the Next Step in Cryptocurrency

Without any doubt, cryptocurrency is a global revolution. People from all over the world are interested in these new investments and try to become part of the startups that launch various initial coin offerings (ICO). An ICO is the way to start investing and understanding this new sector - one that is not yet familiar with these terms may use the following explanations: an ICO (or a token crowdsale) can be compared to an initial public offering. However, unlike the latter, it does not use stock - it sells a certain amount of cryptocurrency tokens.

During the ICO, only a fixed number of tokens are sold; also, a time limit is set for this sale. After the sale is over, the buyers collect the tokens they paid for. Later on, tokens can be again traded by their owners. This may prove to be extremely advantageous because their value can highly increase after a successful token cowdsale. However, tokens are different from stocks - they do not offer the owner a part of the company but provide different services that the start up developers. The platform used for providing this ICOs is usually Ethereum. Buying Ethereum can be done on special platforms - then, one desires by using ETH.

Bancor Protocol Creates the First Smart Tokens

A new generation of cryptocurrency is on the rise - Bancor Protocol. It uses smart tokens - these can keep one or more tokens in reserve and permit anyone to easily buy or sell the smart token, in exchange for any of its reserve tokens. This operations can be done directly through the smart token’s contract. The price for these tokens is obtained by the use of a formula that takes into account the buy/sell volumes. This is base on smart contract blockchains.

The Advantages of Using Smart Tokens
Now, that we presented the mechanism that allows the smart tokens to be converted or sold, we may take a look of some of the most important benefits of using them:

Continuous Liquidity
Due to the smart contracts that we mentioned earlier, the smart tokens are available for purchase or liquidation anytime (after the ICO), by any user.

• Smart Compatibility
  The Bancor Protocol permits liquidity and asynchronous price discovery for any existing ERC20 standard token.
• Transparency
  Prices are set through the smar tokens - buyers and sellers will benefit from the same actual price.
• No Risk for Third-Party
  Conversion between smart tokens can be easily made, without needing to deposit in an exchange.
• Predictibility of the Price
  Constantly, prices reflect the price slippage by a precise pre-calculation and taking into consideration the transaction size.
• Lower Volatility
  This is obtained by maintaining a constant reserve that can ensure liquidity - contrary to what obtaining the liquidity from other markets would mean.

Learn more about Bancor Protocol and visit https://www.bancor.network - the official website provides informative videos and a very helpful whitesheet. This document will offer precious insights regarding the smart tokens, use-cases, the ecosystem of Bancor Protocol, the Bancor Network Token and the crowdsale objectives.