Steemit Crypto Academy Season 2 Week 2 Homework Task By @fadil1:TOKENS

Good day steemians,

It is another beautiful week on steemit crypto currency and I will like to thank our noble professor @pelon53 for his wonderful work and on the lecture about tokens. Am kindly here to give my homework task on our topic and I will like to say I really learnt a lot and I will even like to learn more on your upcoming lectures.

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INTRODUCTION

I will like to start this task by letting you know and understand what tokens are before getting into business.

The word Token in the nutshell means an exceptional currency which deals with block chain involves trading and changing of asserts. In the block chain community, tokens are being given out and produce by the Initial Coin Offering (ICO).Theses Tokens are often use in replacing other staff and also use in increasing capital for public traders.

Mostly people take these two words which is “Token and crypto currency” words to be similar but they are not and also found swapping them. Below are some of the differences I will like to look at and with those differences you will get to know which tokens are and which is crypto currency.

TOKEN AND CRYPTOCURRENCY DIFFERENCES

People don’t need to get their selves wrong again because with the differences between Tokens and crypto currency everything is clear. Below are some of the critical differences I will like to talk on:

1. A token requires another platform such as ethereum to exist and operate whiles crypto currency operates independently of any other coin.

2. A token is a digital representation of an assert that can be exchanged using a block chain network whiles a crypto currency is meant for storing and exchanging of values.

There are some known types of tokens I will like to emphasize more on for you to get a full knowledge and understanding about it. I will just like to base on three token types only provided the rules given by the lecturer. Below are those three types:

1. Utility token

2. Equity token

3. Security token

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UTILITY TOKEN

Utility token is more liquid medium of exchange and they give one access to the value created by a block chain network. Utility token also represent access to a service delivered by block chain based economy. It is a quantified unit of service than can be accessed within a given network.

This utility token is use as a medium for the exchange of a service and those who consume the service have to give tokens to those who provided. The services on the block chain can be of many different kinds. They are;

1. Health token

2. Clean token

3. Transport token

ADVANTAGES

1. It does not pass Howey test, and therefore has no expectation of profit.

2. There is no other token managing them thereby the token has no currency.

3. It is unregulated which means that its prone to scams and attacks.

DISADVANTAGES

1. On their platform, anxiousness is their main priority because there is no agreement.

2. It’s very difficult for a block chain to give out its utility token because the set up of the token has been made in a block chain.

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File coin as one of utility tokens

I will just want to give a brief summary of file coin.

File coin is a decentralized storage network made in a form to keep important records of people. It is use to store and retrieve data and also a powerful and distributed cloud storage network for your data. We can use it for contract data, personal files, up data company files and many more.

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EQUITY TOKEN

Equity token is a subcategory of security tokens that represent ownership of an assert, such as dept or company stock. A good situation for raising capital with equity tokens could be a company that wants to sell physical products or services like a gold retailer.

ADVANTAGES

1. Equity tokens are the most proven token economy in the world. They are very much like stokes or shares.

2. It is possible to issue tokens as non-voting shares, so you don’t give out control of your company, but you do allow people to invest safely.

3. Your token will remain value as long as your company is making money.

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Bitfinex as one of Equity tokens

Bitfinex is one of the top five crypto exchanger’s world wide which is mostly use by professional traders and by institutions. The platform is really performance so you can execute and trade all time and even when it has a high demand or a lot of facility in the market you can always use bitfinex.

The technical side of the platform is very wider and there is no case with other exchangers. So if you want to buy or sell huge amount of bit coin or any other crypto currency, bitfinex is actually the place to go because it has a lot of demand and supply and that’s why many institutions trade with bitfinex.

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SECURITY TOKEN

Security token is a token that represent tradable financial assets, for example a share from a company. It is also a form of investment because they pay diligence to your profit will pay interest in a way that promises future profit.
A security token also meet any or all of the requirements on the howey test and does not have an expectation of profit. Its value is tied to the value of company issuing the token and it is regulated by the SUC which means that scams and attacks are much more unlikely.

ADVANTAGES

1. Processes involved in its transaction make it very easier and faster.

2. No charges or any amount is removed from one account when transferring money from one country to another.

3. The security token market has been connected to block chain which makes investors to know their tokens using the block chain app.

DISADVANTAGES

1. Transfer of token moves in a long way through certain steps and procedures before completion because permission should be taken by your country.

2. Its value is tied to the value of company issuing the token.

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Polymath as one of security tokens

Polymath is a security token platform which helps in enabling securities such as stocks and bonds to migrate to block chain. It also visions the future where token holders replace share holders in the global economy.
Ever business in the world has immediate access to more than trillions of dollars worth of crypto capital.

Polymath is assuring in a new world of security token offerings. It is also building the world’s first decentralized protocols which empower corporations to launch their own security token by simplifying the technical and legal challenges.

CONCLUSION

In brief, a token is just a digital spikes readings of a person’s assets and its an ordinary crypto currency created to work through an already existing block chain platform, also tokens are mostly or even all are crypto currencies but most crypto are not tokens.

Token is at a high risk of scam and attacks, also it doesn’t generate profit because it failed to pass through Howey test. In addition token has no currency.

Secondly, token doesn’t have a fixed value, the value depends on the company issuing the token, it also has an easier and faster way of transaction but not so secured.

In my above article you would realize there is a vast difference between a Token and a crypto currency.

Thank you very much professor @pelon53 for going through my work and may the good Lord be with us and bless us all.