Hello steemians,

Delighted to be a part of this weeks lecture . Thank you @pelon53 for the in lectures.
After reading the lecture by @pelon53 on tokens part 1 and also carrying out my research about the topic am here to answer the questions that follows it. Below are the questions

• What is security token? And explain an example

• What is utility token? And explain an example.

• What is Equity token? And explain an example.

INTRODUCTION

WHAT IS TOKEN?

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Professor @pelon53 has done justice to the topic above but for the sake of emphasis, i would like to say that token is not a legal tender, what do i mean by that? I mean it is not generally accepted everywhere as a means of exchange,having the backings of the law. So token is usually used by private bodies like companies and organisations. Another thing to note about token is that token can be anything as long as it carries the essence for which it is issued that is to say storage of value.

I would like to draw a conclusion of what a token is from the lecture given by professor @pelon53 and i quote
"In other words, a given token is used in a community to satisfy a present need. The token represent something in a given ecosystem. And it can be a song, a book, an article among other things".source

Now that we are done with knowing what a token is, lets proceed to answering other questions

WHAT IS SECURITY TOKEN?

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When the word security is mentioned the first word that comes to mind is safety. Therefore i can say security tokens are usually issued for the sake of safety. Don't forget i said tokens are used to store value therefore the value stored in a security token is safety values. This is done by collecting personal details of a person and storing it so when this person whose details have been collected tries to access lets say a network service for instance, his details are required. Is just like pass wording your electronic gadgets like computers and phones. Before you can have access to use the electronic gadgets you are required to fill in pass word. Therefore security tokens are used for identification or validation of identity.

Security tokens can also be seen in the likes of shares and dividend, it also cuts across the distribution of revenue and investment. Security tokens are usually supported by block chain technology because tokens generally can not stand on its own.

3 Disadvantages of security tokens

• can be stolen
• can be hacked
• can be lost

Example of security token and explanation.

The blockchain capital(Bcap):

this is a platform that offers security token. The platfoem was started 2013 and it majors on helping companies and firms to grow using the blockchain technology. Below is an example of sales report of security token from the Bcap.

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Aside helping firms grow, blockchain capital majors on equity and tokens investements. It also worthy to note that they were the first to tokenize investment.

WHAT IS UTILITY TOKEN?

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The word utility connotes the ability to satisfy or meet a need. Therefore utility token is a token that satisfies a need.

Companies use utility tokens to raise funds for up coming projects, what do i mean by this statement? This statement means that utility token is a kind of token used to support financially upcoming projects in an organisation. Another point to note about utility token is the fact that any one who has possession of a utility token of an organisation will automatically have future access of that organisation's services or product. Why? Because the fund raised by the organisation is a future thing, which the bearer of the token is entitled to.

A strategy is used to raise funds or support these upcoming projects especially crypto currency projects which is called ICO. ICO means initial coin offering. This means that utility to token are usually given during these fund raising.

It is also important to note that utility token is one of the oldest tokens or if not the oldest token existing. The fact that it is the oldest token does not make it stand on its own, so utility token are usually build on the Ethereum' ERC20.

example of utility token and explanation

Lets look at Golem as a example of utility token.

Golem ERC20 is made for users who have big task to achieve, therefore they need bigger computing processing power. So Golem utility token is given to them for rentals. Such big task may even include scientific calculations.

It is also worthy to note that Golem has the ability to connect two users at the same time.
Lets say user A and user B. User A taps into user B processing power to do his big task because user B has given a part of his computing power for rent through golem networks. This been the case it makes available three kinds of users in golem network. As seen below.

• software designer: this is self explanatory, the person who designed the software (Golem)
• The one who gives out his processing power for rent
• The person who is requesting to user the processing power for rent.

Pictorial representation of golem network transactions

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WHAT IS EQUITY TOKEN?

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The word Equity means ownership. So Equity token for me talks about ownership in a way. Equity token represents how much ownership or the extent of ownership one has in a company's investments.

It is important to also note that equity token and security token in away seems similar but are not the same, because equity token can be seen in form of shares, therefore those who possess it have the right to share in the profit and loss of the company.

Not only that investors have right to share in the profit and loss, they are also given the right to vote in the blockchain. Is'nt this amazing?

Supports or fund can also be raised in the equity blockchain using process or strategy known as ETOs - Equity token offering.

some advantages of Equity token

• The investor or the holder of this kind of token has a degree of control of assets or investment
• it is safe because it has been proven
• Equity token does not depreciates, it maintains its value for assets.

example of equity token and explanation

Am using slice equity as an example

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Slice equity token is gotten from the word "slice" which means to divide. As you can see from the picture above a perfect division of a circle. Therefore slice equity token ensures the perfect division of equity in a firm using the slice pie pie model. As shown below

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CONCLUSION

It is very important to note that all the tokens talked about here which includes security tokens, utility tokens and Equity tokens are not cryptocurrency . secondly all the tokens have a purpose they are fulfilling depending on a person's want although they have their risks and advantages.

Thank you for reading.
Regards

@steemitblog