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In the real world, every financial transaction must be recorded. The entry and exit into old cash books, accountants, computers, cross-checking the data of income tax people! Asset registration is the only guarantee that something that was someone's becomes someone else's through financial, monetary, or qualitative compensation in exchange for another asset.
Strange that this mode of recording has become efficient with something very abject these days: counting slaves. As long-term assets, slaves were registered for life and branded to know who owned them.
A historical stain of humanity between the 12th and 21st centuries. In the oldest modality, with the blessing of the Christian church, in modern times, with the closed eyes of many citizens.
Anyway, in the legal world, assets have to be registered. In the digital world, it's called a token.
Token is the record of an asset in digital format.
It can range from a customer name registration, with no commercial value, to tokens representing real estate investments.
It was the use of cryptography, and the decentralized networks of cryptocurrencies, that drove this token market.
The biggest advantage of the token is that it doesn't depend on a particular company or group to survive.
Through the use of blockchains, assets gain speed and decentralization.
The user now has control of the digital asset, which can continue to exist regardless of the issuing company.
The token can also represent a real asset, for example, a title of precatorio, or an amount of gold, and can be freely traded between its users, without the possibility of intervention by the issuer.
This special class of cryptoactives has its own network, where information about user balances and movements circulates.
Each computer running cryptocurrency software becomes part of a large independent network. This allows tokens to be created taking advantage of this existing structure, without the need for a blockchain network of its own.
Also, tokens are a class of cryptoactives dependent on other cryptocurrencies: they enjoy the benefits of security, transparency, and flexibility in transfers.
More than 70% of the best known tokens exist within the Ethereum (ETH) network. This was due to the ease of scheduling contracts through standardization.
With the ethereum network becoming popular, the ERC-20 standard and Ethereum's Solidity programming language dominated the market.
Because they are easy to build, they have also become means of deception and digital theft, through the pump-dump method.
In other words, despite the great benefits and facilities that tokens bring, understanding where it came from, the trading volume and volatility of the token, in addition to its lifetime, allow you to fall into financial traps.
There are cases where tokens have chosen to create their own blockchain, when they are created as a token in the Ethereum network, they may choose to migrate and become an independent cryptocurrency.
In short, the token has all the benefits brought by programmable digital contracts (smart contracts).
Both tokens and cryptocurrencies can be highly demanded and valued, and eventually compete in some niches.
Tokenize, therefore, an asset is to transform it into a digital format, through a process known as tokenization.
There are real estate, automobiles, games, entertainment companies, football teams and even slices of companies trading in the form of tokens.
Proof of the success of this strategy is the intention of central banks and governments to tokenize their fiat currencies.
This is already being tested in China, for example, and currently causes a series of adverse reactions in other countries and regions, namely: USA, Russia and EU.
On the other side we have the issuer, which benefits from the ability to divide the asset into smaller portions, increasing its liquidity.
In this way, when tokenizing a property, a title of precatorio, or gold bars, it is possible to trade and move fractions of the asset, without the need for authorization from a central entity.
In short, this expands access to previously restricted markets, and facilitates the transfer and registration of ownership of this asset, due to the transparency and security of the blockchain.
It is possible to issue a large amount of tokens with a low unit value, increasing the access of the investing public.
Blockchain technology allows precise control of which addresses on the network control which token; however, the issuer may require, if desired, that this owner identify himself at the time of conversion of the token into the real asset.
The success of cryptographic tokens started with stablecoins, cryptoactives paired with the dollar.
There are currently around 19 billion USD equivalent circulating in this class of cryptoactives.
There is also the rise of gold-backed cryptoactives, acting in a similar way to the Dollar's stablecoins.
However, the biggest advance came from utility tokens (utilities), which represent access to a particular service or product.
Thus, utility tokens are not designed as a store of value, or as a means of payment.
Lastly, the birth of the security token industry, securities tokens and NFT, which allow art to gain digital status and intellectual property protection.
These cryptoactives also begin to represent company shares, derivatives, or other regulated instruments.
Tokenization is booming.
In this way, even though they do not compete directly with cryptocurrencies, tokens can have great utility, and consequently, value.
In a few years, experts estimate that tokenization will be part of trading on real exchanges and real shares will become tokens for companies.
For better or for worse, tokens are here to stay and, unlike cryptocurrencies, which are the object of asset valuation, tokens are financial transaction instruments and are therefore much more promising than bitcoin itself.
Care is always good!
Honest tokens too!
cripto valour: https://www.publish0x.com/rationality-emotionality-and-financial-markets/cryptocurrencies-are-nothing-and-thats-not-bad-xnxqqdn
