What is token?
Token is a unit of accounting that is used to present a digital balance in a certain asset. Token accounting is carried out in a database based on blockchain technology, and access to them is carried out through special applications using electronic signature schemes.
What are the types of tokens?
– Equity tokens – are the shares of the company.
-Utility tokens-reflect some value in the framework of the business model of the online platform (reputation, points for certain actions, game currency).
-Asset-Backed tokens-digital obligations for real goods or services (kilograms of carrots, an hour of the builder, etc. P.).
What can be ensured by token?
Only Asset-Backed tokens can be directly provided. In this case, token is a digital double of a real (physical) asset or service. For example, one token can be equated to one square meter of living space or the opportunity to go to one session to the cinema. The guarantor of turning token into the provision is the organization itself, which stores goods or provides services.
What is tokenization of assets?
Tokenization is a process of transformation of accounting and management of assets, in which each asset is presented in the form of digital token. The essence of tokenization is to create digital analogues for real values for the purpose of quick and safe work with them. For example, the owner of the bakery creates an electronic accounting system in which he issues digital obligations for rolls – tokens. Having a fairly good reputation, the owner of the bakery can pre -sell the rolls, selling tokens on trading platforms on the Internet. In this case, any owner of tokens can come to the bakery and exchange one token for one roll.
How the token differs from cryptocurrency?
Unlike cryptocurrencies, tokens can be issued both centrally (under the control of one organization) and decentralized (under the control of a predetermined algorithm). Processing and adoption of transactions can also be carried out centrally (all servers are controlled by one organization). The formation of the price of tokens can depend not only on the balance of supply and supply, but also on additional aspects (binding to external asset, conditional rules of emission or remuneration). In addition, unlike cryptocurrencies, token does not have its own blockchain.
How to buy tokens?
Tokens can be bought through online trading services (exchanges and exchangers), or in personal transactions (the buyer and seller agree personally). The process of trade in tokens is identical to the process of cryptocurrency trafficking. In addition, tokens issuers often embed for their projects the ability to buy tokens through traditional electronic means of payment.
Where to store tokens?
In the processes of transfer and storage of tokens, they look like cryptocurrencies. For this, special applications-chips are used, which implement the storage and processing of keys, as well as the formation and signing of transactions. As a rule, these applications are included in the infrastructure of the tokenization platform.
What are the advantages tokenization Where to Buy an ?
– accelerates trade processes, since it is not required to move real assets and paperwork for property rights.
– increases the safety of storage and transfer due to accounting for transactions based on blockchain technology.
-removes the need to trust intermediaries, since their participation can be described at the level of smart contract or they can be excluded from the chain.
– increases the functionality of the infrastructure, expands the features of the platform by connecting additional modules (multi -level authentication, creation of invoices, regular payments, replenishment cards).
– increases ease of use, since many platform capabilities can be integrated into the user interface of a mobile application.
What are the advantages of blockchain in the process of tokenization?
– organization of a reliable database (ensuring the integrity and reliability of the data of each of the next state of the system).
– decentralization of the refusal point (processing and adoption of a transaction by many independent servers).
– organization of a reliable audit (full verification of the correctness of the entire history of changes on the platform by the auditor).
What are the risks and problems of tokenization?
– Personal keys of users can be lost or stolen by hackers, which cannot be predicted and insured.
– ensuring confidentiality in public blockchains is a difficult task, since for the process of verification of transactions, their data should be open.
– a difficult task of scaling in a decentralized accounting system, since a decentralized database has a strict bandwidth restriction.
The card was prepared using Distributed Lab specialists