Steemit Crypto Academy Season 2 Week 2 Homework Post for @pelon53
Introduction.
Before I make my presentation on the types of tokens, I would first want to talk a bit in tokens.
So tokens are objects used in place of coins or bills that have actual value. Examples of tokens are the coin like objects used in casinos, door cards user in place of keys, among others. They come in different colours, shapes and colours. They also come in various types with their importance as explained in the subsequent paragraphs.
What is security token and explain with an example.
A security token is a physical device or peripheral device that one must possess to have access to a system. This device authenticates a person's identity by storing data where the user mostly inserts the token into the system to grant access to a network.
Security tokens allows it's users to have a share of the profit earned after managing partners take out 'management and performance fees'
Security tokens can be usb tokens plugged in usb ports, wireless bluetooth or hardware tokens that contain chips.
Security tokens come in 3 types;
a. Connected tokens which work electronically transmitting information to the network when they're connected. Eg: smartcard.
b. Disconnected tokens which work manually by entering information from the token to the system. Eg: cellphone.
c. Sign in on services which allow users to log in to 3rd party websites seeminglessly.
Security tokens grant access to assets to lower costs, increase transparency as they are easy to track. They increase liquidity in the sense that they enable ownership which lowers the minimum amount of money to make an investment. It's also first effective.
Example of security token.
Blockchain capital (BCAP token);
Blockchain capital was founded in 2013 and it's Bcap token was launched in April 2017 raising $10M in 6 hours.
BCAP tokens represent venture funds managed by blockchain capital. It was the first security token coinbase supported.
It's goal is to help people start companies and projects based in blockchain by providing founders with capital, technological know how, among others.
BCAP tokens as a security token allows it's holders a a share of the profit earned.
This token is transferable and liquifiable.
What is utility token and explain with an example.
A utility token is token that aids in financing projects for project development groups or start ups. These tokens are used as collateral or security for participation in crowd or large sales ( known as ICOs) organised to raise capital for the project.
Having a utility token does not guarantee attaining income as the project can fail rendering the token useless or of no value.
But it also allows you to have access to future access to the businesse's or project's product.
Issuing utility tokens is mostly aimed to obtain funds for a project.
This is certainly relatable to the lesson we had on ICOs last week where investors get involved in ICOs to fund projects with clear cut ideas for returns in the future.
Example of utility token.
Golem;
Golem is a utility token that creates a financial system allowing people to rent computing power by being reliable and open source allowing everyone to partake.
Users of Golem pay one another for sharing their available or unused resources. It's a decentralized system and so doesn't need middlemen for its transactions. This network allows other users to tap into another user's computing power who has made it available for rent.
The currency used to pay users and system developers is the Golem Network Token, GNT. Since it's a decentralized and a peer to peer system, transactions are fast and direct.
The primary goal of Golem is to help users have access to more and powerful computing power to be able to create more artificial intelligence since the world is going digital my leveraging the Golem network.
What is equity token and explain an example.
Equity tokens are stocks given by beginning entrepreneurs to individuals or companies as part ownership and voting rights in the blockchain. This is a form of equity as the name implies issued as a form of security to investors as they partake in the growth of the network.
The issuing of equity tokens are done in fundraising for projects known as EquityToken Offerings (ETOs). Usually in equity tokens, terms and conditions are set as a contract underlying ownership and voting rights.
Because of how equity tokens are set up, it allows the interest of investors and companies to be same.
Equity tokens were created to show representation of ownership of assets with the aim of boosting the economy or market.
Example of equity tokens.
The Elephant Private Equity Coin;
The elephant private equity coin is the first security token. This platform has a whopping $200M worth of shares of privately held companies. The company has just 12 employees who are among the best in all their fields.
It's the aim of the elephant equity coin to expand liquidity to investors by giving them access to previously inaccessible shares and liquidity when they want to exit.
Conclusion.
This lecture has been very informative as I've learnt about the various tokens and examples. Basically, tokens are given out as security to investors .Tokens will soon have even more control in economic world as they serve a lot of purposes.
I say a big thank you to prof @pelon53 for this informative lecture.
Hola @chenty
Gracias por participar en la Academia Cripto de Steemit.
Thank you prof, I would do better next time