STEEMIT CRYPTO ACADEMY SEASON2 WEEK2 ASSIGNMENT BY@jimah1k: TOKENS PART 1
Hello @pelon53
I am very grateful for this opportunity to be here on the steemit cryptoacademy community and also special thanks to our lecturer for doing his job very well. Below are my solutions to the assignment given.
Token
what is a token?
A token is a digital or virtual representation of an asset that can be exchanged using the blockchain network. Tokens do not have its own blockchain in other words it’s built on top of another blockchain. They can also be used to store value or make purchases. Tokens have the ability to affect the financial ecosystem. A $60token made for exchange in a certain place can’t be used else where for example in a casino investors buy tokens with this tokens they are able to play games and stuffs if you take this token outside to buy food or something else you won’t be able to do so.
What are crypto currencies?
Is a digital representation is something valuable that only exists online it uses cryptography to verify transactions, there are over 1000 crypto currencies in the world.
Difference Between Token and Cryptocurrency
| Tokens | Crptocurrency |
|---|---|
| They aren’t accepted everywhere only in the place they were manufactured | They are accepted across the globe. |
| Tokens do not have their own blockchain platform but are built on existing platforms | Cryptocurrency have or use their own blockchain platform. |
| Tokens are not limited but can achieve several task | Cryptocurrency are limited mainly for exchanges |
| Tokens are made to perform specific functions | They aren’t programmed to perform specific functions |
Security Token
what is a security token?
Security tokens are tokens that represent tradable financial assets for example a share or bond from a company. Security token are meant for a form of investment it pays dividends or pays profit.
Advantages of Security Tokens
- Improved market in monitoring in apps created in the blockchain helps investors to track his tokens
- Because of the lack of third parties in security tokens chances of corruption and illegal activities are reduced
- Security tokens are programmed so automatic compliance can be instructed into the token
- Reliability, security tokens are always there this helps with inefficiencies of market closure.
Example of a security token
Open-finance Network
OpenFinance has established themselves as a mainstay within the digital securities sector. They have managed to do so through the development and release of a blockchain based platform. This platform facilitates not only the trading, but clearing and settlement of digital securities.
By offering these services through their platform, OFN became one of the first secondary market providers in the world. With the industries first batch of security tokens recently coming out of ‘lock up’, OFN announced support state-side for projects like SPiCE VC, and BCAP.
The success experienced by OFN has allowed for the company to successfully land investments from outside companies such as Sharpe Ventures.
OpenFinanceNetwork is a Chicago, Illinois base company, which was founded in 2017. Company operations are overseen by CEO, Juan M. Hernandez.
source
Utility Token
What is a utility token?
A utility token is something that provides with a product or service they allow the users access to the network or have their voices heard through voting utility token sometimes allows users to avoid certain government task, they also gives the user or allows him to enjoy some privileges. Which is why most users prefer them more than the security token. In case a company produces products in the Future utility tokens allows users to buy those products.
Examples of Utility Token
BRICKBLOCK
Brickblock was founded at the beginning of 2017, focusing on mapping financial transactions on the blockchain.
Writing data on decentralised ledger benefits not only investors but financial asset issuers as well. Clients integrating our database solutions into their existing product offering, benefit from efficiency gains, and more financial transparency for all stakeholders.
Since the inception, we have provided our core securities system to companies around Europe and are a trusted partner of small, medium, and large institutional clients.
source
Equity Token
what is an equity token?
Equity tokens shows ownership or shows whether an investors has or holds or owns an investment the bigger your token the bigger your investment and Vice versa they come in many forms like stocks, real estate tokens, tokenized ventures and many more. When an investor owns a real estate token it shows his hold on the investment or the percentage he holds
Example of an Equity Token
DAO
what is DAO?
is an acronym that stands for Decentralized Autonomous Organization, from the name we get an idea that it’s decentralized this company or organization runs entirely on algorithms which shows or lay down rules on how users or people involved should coordinate with each other since they are decentralized smart contracts carried out aren’t linked to any rules or laws and It isn’t controlled by a single person since it’s decentralized in 2016 the concept of DAO was explained. DAO also helps speeds up transaction
CONCLUSION
Based on the lecture notes given and research I did I can clearly say that I have understood the concept of Tokens the difference Between a token and a cryptocurrency and also explain the types to tokens.
Thank you professor.