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Blockchain

Blockchain and Tokenization

THE DIGITAL TRANSFORMATION OF INVESTING

Security Token - STO

Security tokens are essentially digital, liquid contracts for fractions of any asset that already has value, like real estate, a car, or corporate stock. … With their ability to demonstrate value, security tokens could roil traditional financial markets in favor of the newer, more hybrid blockchain models

  • STO's combine the technology of blockchain with the requirements of regulated securities markets to support liquidity of assets and wider availability of finance.
  • STOs are typically the issuance of digital tokens in a blockchain environment in the form of regulated securities.
  • The blockchain environment enhances securities regulatory objectives of disclosure, fairness and market integrity and supports innovation and efficiency through automation and “smart contracts”.

Sources:

  • Liebkind, Joe. “Is 2021 the Year of the Security Token?” Investopedia, Investopedia, 30 Dec. 2020, www.investopedia.com/tech/2018-year-security-token/.
  • https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/audit/deloitte-cn-audit-security-token-offering-en-201009.pdf
 

Security Token - STO

Security tokens are essentially digital, liquid contracts for fractions of any asset that already has value, like real estate, a car, or corporate stock. … With their ability to demonstrate value, security tokens could roil traditional financial markets in favor of the newer, more hybrid blockchain models

  • STO's combine the technology of blockchain with the requirements of regulated securities markets to support liquidity of assets and wider availability of finance.
  • STOs are typically the issuance of digital tokens in a blockchain environment in the form of regulated securities.
  • The blockchain environment enhances securities regulatory objectives of disclosure, fairness and market integrity and supports innovation and efficiency through automation and “smart contracts”.

Sources:

  • Liebkind, Joe. “Is 2021 the Year of the Security Token?” Investopedia, Investopedia, 30 Dec. 2020, www.investopedia.com/tech/2018-year-security-token/.
  • https://www2.deloitte.com/content/dam/Deloitte/cn/Documents/audit/deloitte-cn-audit-security-token-offering-en-201009.pdf
 

Non-fungible Token - NFT

Non-fungible tokens or NFTs are cryptographic assets on blockchain with unique identification codes and metadata that distinguish them from each other. Unlike cryptocurrencies, they cannot be traded or exchanged at equivalency. This differs from fungible tokens like cryptocurrencies, which are identical to each other and, therefore, can be used as a medium for commercial transactions.

  • NFTs are unique cryptographic tokens that exist on a blockchain and cannot be replicated.
  • NFTs can be used to represent real-world items like artwork and real estate.
  • "Tokenizing" these real-world tangible assets allows them to be bought, sold, and traded more efficiently while reducing the probability of fraud.
  • NFTs can also be used to represent people's identities, property rights, and more.

Sources:

  • Sharma, Rakesh. “Non-Fungible Token (NFT).” Investopedia, Investopedia, 18 Mar. 2021, www.investopedia.com/non-fungible-tokens-nft-5115211. 

Distributed Ledger Technology - DLT

Distributed Ledger Technology (DLT) refers to the technological infrastructure and protocols that allows simultaneous access, validation, and record updating in an immutable manner across a network that’s spread across multiple entities or locations.

  • DLT allows for storage of all information in a secure and accurate manner using cryptography. The same can be accessed using "keys" and cryptographic signatures. Once the information is stored, it becomes an immutable database and is governed by the rules of the network.
  • The very nature of a decentralized ledger makes them immune to a cyber-crime, as all the copies stored across the network need to be attacked at the same time for the attack to be successful.
  • DLT has great potential to revolutionize the way governments, institutions, and corporations work. It can help governments with tax collection, the issuance of passports, recording land registries and licenses, and the outlay of Social Security benefits as well as voting procedures.

Sources:

  • Frankenfield, Jake. “Distributed Ledger Technology.” Investopedia, Investopedia, 1 Apr. 2021, www.investopedia.com/terms/d/distributed-ledger-technology-dlt.asp.

Distributed Ledger Technology - DLT

Distributed Ledger Technology (DLT) refers to the technological infrastructure and protocols that allows simultaneous access, validation, and record updating in an immutable manner across a network that’s spread across multiple entities or locations.

  • DLT allows for storage of all information in a secure and accurate manner using cryptography. The same can be accessed using "keys" and cryptographic signatures. Once the information is stored, it becomes an immutable database and is governed by the rules of the network.
  • The very nature of a decentralized ledger makes them immune to a cyber-crime, as all the copies stored across the network need to be attacked at the same time for the attack to be successful.
  • DLT has great potential to revolutionize the way governments, institutions, and corporations work. It can help governments with tax collection, the issuance of passports, recording land registries and licenses, and the outlay of Social Security benefits as well as voting procedures.

Sources:

  • Frankenfield, Jake. “Distributed Ledger Technology.” Investopedia, Investopedia, 1 Apr. 2021, www.investopedia.com/terms/d/distributed-ledger-technology-dlt.asp.