Find out what security tokens are, the most secure blockchain technology
Have
you heard about blockchain technology and tokenization, but you have
questions about the meaning of the many concepts that revolve around
them?
In this article we want to tell you about the main
features of
security
tokens
,
the
tool
used by the Tokenchampions team
to
democratize the access of all fans to the management of the image
rights of professional football players.
Before we explain what security tokens are, let's rewind. Let's start at the beginning. Where do they come from?
The
background
Blockchain is a growing technology that has the potential to revolutionize different professional areas. That scope is mainly based on its ability to offer people a reliable channel in which to transfer value or real assets (tokenization) over the Internet.
This technology, which also includes security tokens, makes it possible to establish a high level of trust in a space, such as the Internet, where we do not always know what happens to our data.
Tokenization
is the transformation and representation of an asset or object within
blockchain technology. To achieve this, the asset or object itself is
digitized and all this information is transferred to a block of a
blockchain
.
Once
registered, this asset can be exchanged, stored, or manipulated
through tokens, which are used as a unit of value to operate in
Blockchain.
The great advantage of tokens is that they give
"more power to their users to interact with their products,
while facilitating the distribution and sharing of benefits among all
its shareholders", as defined by William Mougayar, author of the
book
The
business blockchain
.
In our case, Tokenchampions tokenizes
the
image rights of future promises of the beautiful game with the
aim
of facilitating the access of all fans to the football business.
In other words, tokenization is a tool that blockchain technology makes available to all citizens so that we can easily operate in the financial markets without the need to resort to intermediaries.
So, what is a security token?
A security token is a type of token, also cryptographic like utility and equity tokens, but which are linked to traditional security tokens: that is, they are linked to financial securities.
Security tokens are an exchangeable financial asset, like bonds, swaps, futures, etc. and are currently very common in the blockchain universe.
The
goal of a security token is to offer rights very similar to
traditional shares, allowing to reach a wider audience, eliminating
bureaucracy and slowness.
A security token is considered as
such as long as it meets these four requirements:
1. There is
an investment of money.
2. There is an expectation of profit.
3.
The investment is in a common enterprise.
4. Any profit comes
from the work or efforts of a promoter or a third party.
Tokenchampions
security tokens are a digital representation of an established
investment instrument, in this case, a Luxembourg-based investment
fund.
Unlike
a cryptocurrency, Tokenchampions tokens cannot
be acquired by anyone, but only by qualified investors who comply
with the regulations applicable to this investment instrument.
As stated in this article in Cinco Días, "blockchain technology guarantees transparency and efficiency in the transfer of these tokens [security tokens], reducing the bureaucracy required for their transmission, making peer-to-peer transmission easier for the person investing or wishing to dispose of their security tokens".
Tokeny, Tokenchampions partner, reminds that security tokens are regulated and, in most cases, backed by underlying assets: "STOs (Security Token Offer) can produce a regular return for their holders, while providing more stability and guarantees for investors."
Thus, security tokens are heavily regulated by the relevant laws and regulations in each jurisdiction, both when they are issued and when they are distributed.
What
did you think of this Tokenchampions article about security tokens?
Did we help you to clarify concepts? You
can find the original information on the Tokeny website. The
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