What is a token and tokenization. What is the difference from cryptocurrency? | Business Biceps

Hello, dear friends! We continue to acquaint you with the investment world in the ICO. Today analyze questions such as: What is a token? What is tokenization and how to make money?

Trade tokens, issue of tokens and tokenization – is, today, one of the most rapidly developing areas of the cryptoeconomics and cryptoworld general. But statistics show that a clear understanding of what is it is not even 80% of investors in ICO. I hope that after reading this article you will have no issues. But if it does not, feel free to write in the comments or in our Telegram-Chat, answer, explain.

Since we are talking here about the complex simple – I do not allow myself to give a formal definition of the term. Thus, the token – it is the digitization of certain assets and placing information about it in blockchain. In other words, it is the digital equivalent of a physical asset or actions. The token does not have its blockchain- it’s just a smart contract (See the article What is a smart contract “),built on blockchain donor, unlike cryptocurrency, which has its own blockchain and produces tokens solely on its basis.

Based on the foregoing, we get an answer to perhaps the most popular question about the token and coin. The different tokens from cryptocurrency? That the tokens do not have their blockchain and use “foreign” network, and Coin (cryptocurrency) has its own blockchain.

There is another good definition that reveals the essence of tokens deeper. Token – a digital standard unit that was invented by someone. And the rationale for what value lies in the token, and to which it is bound, in fact, completely at the discretion of the person who issued the token. Let us consider an example.

Suppose I am a very professional and popular lawyer. I can release a token called, for example, “YurisToken”, and announce its value, 1 token = 1 hour of my advice. In other words, I tokenized their time. These tokens are on my balance, I can give them to you under certain conditions. Thus it can be tokenized anything: services, goods, assets, etc. The transformation of an asset from the real world into a digital asset information stored in blockchain and there tokenization.

Why tokens?

The main objective of tokens – is to simplify the exchange of some or values that are difficult to share in the real world. You agree that you will be very uncomfortable to trade my time, my lawyer’s advice. In the real world it is almost impossible. But with the help YurisTokenov, very easy to manage these processes. You can easily sell my consultation hours to buy them, loan, etc. This is the value of tokenization.

Benefits tokenization

  1. simplify and accelerate the process of trade.
  2. Secure storage and transmission.
  3. Thanks to a smart contract there is no need for intermediaries.
  4. The expansion of business opportunities and processes.
  5. Enhanced usability.

How can I make money on it?

You need to figure out which assets have the potential for growth in value, and buy these assets, more precisely, the tokens of those assets. For example, a certain investment bank tokenized Apple share and sold you tokens of this action. Thus, every time Apple’s stock will rise in price will rise and your tokens.

According to this principle works and ICO. At an early stage, when the success of the project is not yet clear, they offer you their tokens, as a kind of fixation of your rights as an investor in the project. Thus, if the tokens are attached to the assets of the project company, or if the tokens are widely used in business processes of the project in the future, with the growth of the project, these tokens are also rise in price.

This concludes the article, I hope the information was clear and accessible. It should be noted that this topic is very extensive and quite complicated to understand. In the near future there will be an article with a full analysis of this concept, reading will not be easy.

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