Crypto Academy Week 10 || Homework Post for Professor @Pelon53 || Tokens

Hello Steemians, this is my homework task on Tokens for Professor @pelon53. Hope you enjoy it.

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1. What is Security Token? And explain an example.

Security Token;
It can be defined as a digital representation of an assets that are traded and held in a distributed ledger (blockchain), they are regulated by a governing entity all over the world who are dictating how it can be managed, exchanged and issued. All these are done by leveraging blockchain technology.
Security Tokens has made it possible for many conventionally cumbersome and manually laborious processes to be automated. It has provided a source of truth (transparency) that all parties involved can depend on.
In otherword, Security Tokens has combined speed and blockchain technology with strong legal protection of traditional security.

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Real Asset Token is One Example of Security Tokens.
These are tokenized commodities in energy, agriculture and metals. They represent ownership to assets such as commodities/real estate. This commodity backed tokens has addressed the issue of trust, flaws and complexities of transactions that is common with multiple entities.
Blockchain technology provided a transparent record for all transactions, reduced fraud and track goods, which has made it ideal for the commodity business.

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2. What is Utility Token? And explain an example.

Utility Token.
This is a digital token, that is issued to fund the development of a project (crowed funding), this implies that the buyer of this utility token has paid the issuer to develop/produce a product that the token buyer can redeem later for that goods and services.

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Filecoin is a good example of utility token.
It is a decentralized file sharing and storage network that utilizes the power of blockchain technology to provide a verity of new opportunities in the market for the user's. Filecoin combines different technologies in order to provide a very unique experience to user's.

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3. What is Equity Token? And explain an example.

Equity Token.
It is another type of security token that runs like traditional/conventional stock asset. The holders of equity tokens have a form of ownership in their investment. Here, each token represent a percentage of the said property they have. Ordinarily, equity tokens represent a third party property/asset.

Equity tokens are blockchain representation of ownership of a an asset. Such companies can give shares and voting rights on blockchain. Equity tokens are governed by a regulatory body and are interchangeable.

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Decentralized Autonomous Organization (DAO) is a good example of Equity Token.
It entails a dynamic way of organizing and running organizations with the help of smart contracts and blockchain technology to provide security, transparency and autonomy.

Working Mechanisms of DAO.

1. It has the ability to program activities and make them work according to certain parameters. Thus DAO has the ability to carryout actions autonomously.

2. Consensus Protocol; this ensures that decisions made within the DAO are born out of consensus.

3. This mechanism depends on issuance of token. It's very purpose is to guarantee means that financially support the DAO. It also allows the user's to gain voting power, exchange and reward.

4. The fourth mechanism is rooted in the blockchain technology, where all the informations and activities within the DAO are stored and are secured transparently.

Conclusion
I have to digress, because it's important I make this point as my conclusion.
Blockchain technology has come a long way, it has provided a very vital platform for very useful innovations that are centered in important solutions like security, decentralization, ease of doing things etc. In essence, without blockchain technology, nobody will be talking about security tokens and all that.