Crypto Academy Season 2 Week 2 Homework Task Post for @pelon53 (Tokens) By @silencewan

INTRODUCTION

Hello Everyone!!!
It is another beautiful day today that I want to complete my homework task post on Tokens by professor @pelon53. To proceed with my submission today, I want to say a very big thank you to the professor for taking his time to give us such a wonderful lecture and a very good and helpful resource. I must say that it really helped me in completing my assignments and also aided me to do more research on this particular topic (Tokens). To set the ball rolling, I will be explaining in detail what tokens are and a brief history about them, and how they came by.

Cover designed By Myself

Giving a little introduction of what will be done, let's look at brief history about Tokens.

A Brief History of Trade Tokens

In an actual sense, tokens substitute official coins privately. What this means is that they were produced to substitute the official coins we know. Tokens were initially produced first in Britain from the time of Elizabeth I through to George III, by individual companies which often were large scale employers to help provide some sort of change. These tokens or the production had reached its peak closer to the end of the 19th century.
This is a little about tokens, how they started and where it started. Now let's see what tokens are now.

What is a Token?

We can define Tokens as values used or found on blockchains, tokens are not platforms own say have their own blockchain but rather built upon any blockchain which is dependent on those blockchains. Tokens are an aid to be used for trading in the markets since they in a way have value.
Tokens are mistakenly compared to crypto coins but these two are two different things used. Tokens are purposely meant for trading and for investment used in a form of some kind of a currency while crypto coins are the digital currency used in buying and selling. Let's make some comparison between a Token and a Crypto coin.

Comparison of Tokens and a Crypto Coin

Tokens	Crypto coin
pre-existent platform/blockchain	forked using its own blockchain
They are mostly used with some decentralized apps or dApps or probably to represent something with a real value	Used in the transfer of money or store value as a unit of account or purchase.
They are built for just a couple of dollars or higher	For the coin to function properly, it needs the intervention of expertise to set it up or create.
It can be created in a couple of minutes but depending on the platform	In creating a coin, the process takes time and even require much more resources and skill
It is created with programs used to satisfy its function	They are not created with programs

Tokens are of different forms which we will be looking at them. These are the Security Token, Utility Token, and the Equity Token. I will pick each of them to explain in detail what actually they are.

Security Token

Security Token

We can define a security token as a token that replaces financial assets which can be traded. They can also be used for investments that lead to making future profits. These security tokens give benefits to the government since they use the fast speed of blockchain to increase protection from hackers or fraudsters.

Network Securit Token
With regards to Network security token, we can say that they are some kind of peripheral device which intends to gain access through an electronically restricted information or resource and in this case the token is used in place of a password or key. in short, it serves as an electronic key through which access can be granted.

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BENEFITS OF SECURITY TOKENS

1. There is a reduction in direct cost

2. It increases liquidity and market depth

3. There is also a rapid settlement

4. Another benefit is a fractional ownership

5. Another benefit is also the flexibility of smart contracts

6. Automated compliance is another benefit of security tokens

7. Asset interoperability

8. lastly, 24/7 markets

Some advantages and disadvantages of security tokens

Advantages	Disadvantages
They provide liquidity to investors	Limitations when it comes to market trading
Compliance/Governance	Needs to build a new developer, Communities and Networks
There is privacy	Lack of interoperability with Ethereum based tokens
Disclosures	Lack of support in security Tokens Exchanges
Promises profit at the end of an investment	More expensive as compared to utility tokens

Now let's see one platform that security token is built upon. There are so many of them but for I will prefer to talk about TokenSoft.

TokenSoft

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Synopsis

Company Name: TokenSoft
official website: www.tokensoft.io
Size of the Team: 15
Location: San Francisco and New York
Date Founded: 2017

Summary about Company

Tokensoft pushes the market in providing solutions based on technology to support securities that offer blockchain-based issuances of these security tokens. This company is also said to provide a structural design that will support future issuance and partnerships. It's known that the clients of TokenSoft are the leading clients of digital asset issuers, this includes Andra Capital, Tezos Foundation, and also the Hedera Hashgraph. More than $400 million have been raised through these platforms by its clients.

Let's look at some advantages and limitations of TokenSoft

Advantations	Limitations
The key partnerships involve OpenFinance Network, Stellar, Hyperledger, R3 Corda, and Tierion.	this platform does not support ICOs
They have about 20 years of combined experience in blockchain technology	There is a Selective decision in accepting clients, including legal counsel chosen

UTILITY TOKEN

Utility tokens are special tokens that help in capitalizing or financing projects for companies that are startups, or groups that are into project development. This is a type of token that seems to make up a large population of the ICOs that are issued. We cannot also forget that these tokens are also used to create value in blockchain for services that are provided. the basic function of utility tokens is to create products and some of these utility tokens are; golem and timicoin. There are more of their kind.

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BENEFITS OF UTILITY TOKENS

1. Utility tokens helps structure a business model

2. Utility tokens allows presale of goods and services as a result of the utility tokens

3. Also, tokens circulation on the platforms are a very convenient way to sponsor projects that involve exchanges between community members

Some advantages and disadvantages of utility tokens

Advantages	Disadvantages
utility tokens are less expensive	Regulations are not made when it comes to utility tokens
Good produce of products from utility tokens	There is no guarantee of profit at the end
The current value of the company is not related to the value of the token	It could be a fraud or scam.

Lets also, a coin that runs with the utility token as we did for the security tokens, and in this, I will be talking about the Sirin Labs Token

Sirin Labs Token

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This is a token which is developed by a blockchain development company called the SIRIN LABS, its a utility token that serves the purpose of being used as a cornerstone of the Sirin labs ecology or ecosystem, This currently makes available the SIRIN OS, the FINNEY smartphone the dAPP store and the SIRIN LABS brick-and-mortar stores. This lab spends its time developing blockchain smartphones and every product they develop uses its own blockchain. They try to promote the use of digital currencies through the SRN tokens and also want to be decentralized.
Sirin token price page is part of the Crypto.com Price Index which features the price history, price ticker, market cap, and also live charts for the top cryptocurrencies.

EQUITY TOKEN

On a blockchain basis, an equity token can be defined as a collection of encrypted data (a block) which functions as an equity certificate or a form of a security token that represents equity for a given asset this could be a stock of a company related to its shares.
The terms and conditions applicable are set in the contract. An equity token may entitle its holder to voting rights, which are dividends. in Utility tokens, the same protocols are shared like in security tokens.

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BENEFITS OF EQUITY TOKENS

1. Equity tokens keep their value so far as the company maintains its operations.

2. Issuance of equity tokens leads to sales of assets which gives chance to buyers to participate in the decisions of your company's or activity.

3. They have buyback rights

Let's talk about some advantages and disadvantages of the equity tokens.

advantages	disadvantages
In terms of growth, there is a share of profits equally	Before a transaction is made, you need approval before its carried out
No charges in the market transactions	This system looks expensive based on the protocols it shares
This is where there is enough profit	Problems occur when it approaches distribution of profits

Finally, we look at a platform built upon the basis of equity tokens as we did in security tokens and utility tokens. Here I will be talking about The Elephant Token.

The Elephant Token

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This operational platform is worth over $200+ shares of 25+ tier. There is also a company held listed already for sale on the platform. This company turns out to have about 12 employees who are part of the best in the world when it comes to secondary market transactions. The elephant introduced the first security token backed shares which were held privately by unicorns who are the most promising private entities over the globe
It was created in 2018 with revenue sharing as the security type.

A screenshot from the official website of the team
Idan Miller who is the Co-Founder and CMO

Conclusion

I will like to conclude by saying that tokens are very necessary facts about the world of crypto and also plays some kind of important roles. This topic entails so much and we cannot bring out all the details it entails. But This research of mine I believe will enlighten people about what they knew about Tokens. Thanks to professor @pelon53 for bringing such a wonderful topic to the crypto academy.

Thank you for reading