Difference between revisions of "Token"

From Minter Wiki
(Utility tokens)
m
Line 1: Line 1:
 
[[ru:Токен]]
 
[[ru:Токен]]
 
[[File:token.jpg|thumb]]
 
[[File:token.jpg|thumb]]
'''Token''' is a balance measurement of a cryptocurrency asset.
+
'''Token''' is a cryptocurrency asset balance accounting measure. Accounting is done by [[blockchain]] and [[Consensus in Minter| consensus algorithm]]. Access to tokens is provided through special programs and applications by using keys and electronic signature.
Accounting is done by [[blockchain]] and [[Consensus in Minter| consensus algorithm]]. Access to tokens is provided through special programs and applications with help of the keys and electronic signature.
 
  
=== Term history of the "Token" ===  
+
===History of the "Token" term===  
Notions of "token" have been used for at least several centuries; in fact, it is a local money substitute. Bright examples: game currency or subway token.
+
the concept of "token" has been in use for at least several centuries; in fact, it is a local money substitute. Bright examples are the game currency or subway token. If one has a Moscow Metro token, he/she can't use it in St. Petersburg. That is the basic principle and the main difference from money, which has a wider range of possibilities.
If you have a token of the Moscow Metro, you can't use it in St. Petersburg, that's the basic principle and the main difference from money, which has a wider range of possibilities.
 
  
=== Legality of the token ===
+
===Legality of the token===
The case of a single token sale, with the exchange for the national currency, is regulated by the laws for the sale of goods and services.
+
Token one-off sale with the exchange to the national currency is regulated by the laws for the sale of goods and services. Cryptocurrency tokens are an innovation that is not yet regulated in many countries. The case of Libra shows a great interest to technology companies token, as well as existing legal framework shortcomings. Governments and regulatory authorities strive for innovation, but try at the same time to maintain the control and value of the national currency. Today there is no established tokens regulation system in Russia.
The cryptocurrency tokens are an innovation that is not yet regulated in many countries. The case of Libra shows a great interest in the token of technology companies, as well as the defects of the existing legal framework.
 
Governments and regulatory authorities are striving for innovation, but are also trying to maintain the control and value of the national currency.
 
Today in Russia there is no established regulation system for the tokens.
 
  
In 2018, the Bank of Russia's made a "regulatory sandbox" project.
+
Bank of Russia's started a "regulatory sandbox" project in 2018.
  
The aim of this project is to allow the companies to introduce new financial services and instruments without risk of violating the existing laws.
+
The aim of this project is to allow companies introduce new financial services and instruments without risk of violating the existing laws.
  
=== '''Types of Tokens''' ===
+
===Types of Tokens===
  
=== Utility tokens ===  
+
===Utility tokens===  
  
====CAT(Custom Application Token)/appcoin/apptoken/Native Tokens ====
+
====CAT(Custom Application Token)/appcoin/apptoken/Native Token====
The inner tokens of the protocol are the bloodstream of the entire network or applications on which it is based.
+
The inner token of the protocol is the bloodstream of the entire network or applications, based on this network.
  
It gives the token owner a unique advantage in the use of the application or network. For example, the BNB token reduces the commission for Binance trading.  
+
It gives the token owner a unique advantage in application or network use. For example, BNB token reduces commission for trading on Binance Platform.  
  
The BIP token also belongs to the Utility category. It can be used to make quick transfers, pay for goods and services, create custom coins, and delegate to leading nodes.
+
BIP token also belongs to the Utility category. It can be used to make quick transfers, pay for goods and services, create custom coins, and delegate to leading nodes.
  
Most blockchain projects fall into this category.
+
Most blockchain projects fall into this category. The number of different names is driven by marketing positioning or a desire not to fall under the "letter of the law".
The number of different names is driven by marketing positioning or a desire not to fall under the "letter of the law".
 
  
  
 
'''Equity Token'''
 
'''Equity Token'''
  
Equity(capital/justice) token - the analog of shares, it gives their owner the right for a part of the profit and the possibility of partial participation in the company management.
+
Equity(capital/justice) token - the analog of shares, it gives their owner the right for a part of the profit and the possibility of partial participation in the company management. SEC made a following position regarding equity token on July 25, 2017 - " It operates in the same way as a traditional stock company and falls under the regulatory system..." . SEC gave its official opinion on ICO, DAO tokens and their legal status. Based on the results of this decision, the equity tokens fall under the laws for stock companies. All emitters are obliged to have a appropriate registration for tokens issue and registered capital.
" It operates in the same way that a traditional stock company and falls under the regulatory system..."
 
This position was made by the SEC on July 25, 2017, and it gave its official opinion on ICO, DAO tokens, and their legal status.
 
Based on the results of this decision, the equity tokens fall under the laws for stock companies.  
 
All emitters are obliged to have a corresponding registration for the issue of tokens and registered capital.
 
  
In American law, there is a "Howey Test" that defines the legal status of any asset.
+
In American law there is a "Howey Test" that defines the legal status of any asset.
  
In general, the Equity token functions in the same way as a share, but it is recorded in the blockchain and traded on regulated crypto exchanges.  
+
In general, the Equity token functions in the same way as a share, but it is recorded in the blockchain and traded on regulated crypto exchanges. One of the few companies working in this area is https://www.documo.com/investors/eto
One of the few companies working in this area is https://www.documo.com/investors/eto
 
  
 
'''Security Token'''
 
'''Security Token'''
  
A security token is an investment blockchain product that does not give its owner rights for company profit and ways to participate in the company management.
+
A security token is an investment product in blockchain that does not give its owner rights for company profit and ways to participate in the company management.
  
Investors buy a security token for getting profit out of its sale as they expect that its value will be increased. The security token value basis of the corporate efficiency-related indicator.  
+
Investors buy a security token for getting profit out of its sale as they expect, that its value will be increased. The security token basis its value based on some corporate efficiency-related indicator.  
  
Not every cryptocurrency is considered to be a security token.  
+
Not every cryptocurrency is considered to be a security token. Most cryptocurrencies, such as BTC and ETH, do not fall under this classification. This is what investors call "assets", such as gold or silver. Their price goes up and down based on market movements - demand and supply of the asset itself,  but not on any business core or on company's and the product's success.  
Most cryptocurrencies, such as BTC and ETH, do not fall under this classification.
 
This is what investors call "assets", such as gold or silver.
 
The rises and falls of the price not based on any business core or on the success of the company and the product, but on market movements - the demand and supply of the asset itself.
 
The main difference of security token is that it does not give the investor a share of the profit and ways to participate in company management.  
 
  
 
Examples of such tokens are [http://%5Bhttps://polymath.network%20Polymath Polymath], [https://harbor.com/ Harbor], [https://www.tzero.com tZERO].
 
Examples of such tokens are [http://%5Bhttps://polymath.network%20Polymath Polymath], [https://harbor.com/ Harbor], [https://www.tzero.com tZERO].
Line 62: Line 47:
 
'''Asset-backed tokens Debt tokens'''
 
'''Asset-backed tokens Debt tokens'''
  
Debt tokens are the liabilities of a company or an individual that are linked to actual goods or services.
+
Debt tokens are the liabilities of a company or an individual that are linked to actual goods or services. In this case, the company that issued token and provides service or product is the guarantee of token performance. The Asset-backed token becomes a digital copy of the asset or service that is represented in the physical world.  
In this case, the guarantor of the token execution debt is the company that issued the token and provides the service or the product.
 
The Asset-backed token becomes a digital copy of the asset or service that is represented in the physical world.  
 
  
Actual example, the production company https://zrcoin.io/prod makes binding a token with the product "Synthetic zirconium dioxide".  
+
As an actual example, the production company https://zrcoin.io/prod binds a token to the "Synthetic zirconium dioxide" product.  
  
 
'''[[Minter]] network tokens'''  
 
'''[[Minter]] network tokens'''  
  
Network activities such as sale, purchase, [[DPOS]], token issue, are performed with the main BIP token.
+
Network activities such as sale, purchase, [[DPOS]] and token issue are performed using main BIP token. Therefore, BIP token is a Native token.
Therefore, the BIP token is a Native token.
 
  
Custom tokens issued inside the Minter network can belong to different categories. Everything depends on the company that issued the token, and the conditions that it provides to its users and investors.
+
Custom tokens issued within Minter network can belong to different categories. It all depends on the company, that issued the token, and the conditions that it provides to its users and investors.
 
[[Category:Terms]]
 
[[Category:Terms]]

Revision as of 00:25, 13 October 2019

Token.jpg

Token is a cryptocurrency asset balance accounting measure. Accounting is done by blockchain and consensus algorithm. Access to tokens is provided through special programs and applications by using keys and electronic signature.

History of the "Token" term

the concept of "token" has been in use for at least several centuries; in fact, it is a local money substitute. Bright examples are the game currency or subway token. If one has a Moscow Metro token, he/she can't use it in St. Petersburg. That is the basic principle and the main difference from money, which has a wider range of possibilities.

Legality of the token

Token one-off sale with the exchange to the national currency is regulated by the laws for the sale of goods and services. Cryptocurrency tokens are an innovation that is not yet regulated in many countries. The case of Libra shows a great interest to technology companies token, as well as existing legal framework shortcomings. Governments and regulatory authorities strive for innovation, but try at the same time to maintain the control and value of the national currency. Today there is no established tokens regulation system in Russia.

Bank of Russia's started a "regulatory sandbox" project in 2018.

The aim of this project is to allow companies introduce new financial services and instruments without risk of violating the existing laws.

Types of Tokens

Utility tokens

CAT(Custom Application Token)/appcoin/apptoken/Native Token

The inner token of the protocol is the bloodstream of the entire network or applications, based on this network.

It gives the token owner a unique advantage in application or network use. For example, BNB token reduces commission for trading on Binance Platform.

BIP token also belongs to the Utility category. It can be used to make quick transfers, pay for goods and services, create custom coins, and delegate to leading nodes.

Most blockchain projects fall into this category. The number of different names is driven by marketing positioning or a desire not to fall under the "letter of the law".


Equity Token

Equity(capital/justice) token - the analog of shares, it gives their owner the right for a part of the profit and the possibility of partial participation in the company management. SEC made a following position regarding equity token on July 25, 2017 - " It operates in the same way as a traditional stock company and falls under the regulatory system..." . SEC gave its official opinion on ICO, DAO tokens and their legal status. Based on the results of this decision, the equity tokens fall under the laws for stock companies. All emitters are obliged to have a appropriate registration for tokens issue and registered capital.

In American law there is a "Howey Test" that defines the legal status of any asset.

In general, the Equity token functions in the same way as a share, but it is recorded in the blockchain and traded on regulated crypto exchanges. One of the few companies working in this area is https://www.documo.com/investors/eto

Security Token

A security token is an investment product in blockchain that does not give its owner rights for company profit and ways to participate in the company management.

Investors buy a security token for getting profit out of its sale as they expect, that its value will be increased. The security token basis its value based on some corporate efficiency-related indicator.

Not every cryptocurrency is considered to be a security token. Most cryptocurrencies, such as BTC and ETH, do not fall under this classification. This is what investors call "assets", such as gold or silver. Their price goes up and down based on market movements - demand and supply of the asset itself, but not on any business core or on company's and the product's success.

Examples of such tokens are Polymath, Harbor, tZERO.

Asset-backed tokens Debt tokens

Debt tokens are the liabilities of a company or an individual that are linked to actual goods or services. In this case, the company that issued token and provides service or product is the guarantee of token performance. The Asset-backed token becomes a digital copy of the asset or service that is represented in the physical world.

As an actual example, the production company https://zrcoin.io/prod binds a token to the "Synthetic zirconium dioxide" product.

Minter network tokens

Network activities such as sale, purchase, DPOS and token issue are performed using main BIP token. Therefore, BIP token is a Native token.

Custom tokens issued within Minter network can belong to different categories. It all depends on the company, that issued the token, and the conditions that it provides to its users and investors.