It is an investment agreement showing that an individual has a legal approval of having an assests that has been verified within a blockchain. It helps to secure stored personal information or an identity through the use of password. They are given by security token services, although this may not be long lasting as it can be missing or hacked.
A system may require a security token to be accessed, some use passwords, fingerprint. Meanwhile, these are kept secret to ensure that only the individual or owner can get information from the system.
An example of security token
It is a system that contains information ensuring that these information are not altered or hacked. It is used in data keeping and financial transactions.
In blockchain, as the name implies, it is a collection of block of security whereby if a block in a chain is being altered, it will be detected immediately. That is why it is very hard for hackers to tamper with it as they have to change all block in the chain to access the information.
The rate at which blocks are being added to the chain, the more difficult for it to be tampered with as this will strengthen the security of the system.
Utility token entails the assistance rendered to upcoming organization by giving them financial support or funding. It secure capital on a project, for instance, the initial coin offered donate funds needed for it's development.
It is an avenue used for the full involvement in bulk sales to get income on a project, this in turn helps to for see and have access to an organization's output.
An example of utility token
This is the creation of an economic system that helps individual to rent the computing power available to them. People are being exposed to it without consulting anyone.
Those interested can gain access to it and use it for various tasks at any point in time because it is not a one man's business or platform.
Those in use of this token controls and have ownership in their investment.
It involves a third party property, as it is useful to those who control its affairs. They not only have ownership right but also have an entitlement to the company's profits and right to vote. This is often recorded in a blockchain, whereby it is a representation of assests ownership which will make companies to give their shares and voting rights on a blockchain with the aim to boost the system.
An example of equity token
Recovery right token
It is used under the Bitfinex group. When there is a loss of property or theft, the recovery right token help in the recovery of those lost property and also responsible for the protection of the group's rights to debunk claims held against it especially when there is a loss. If there is an event of a stolen bitcoins from Bitfinex group, the token holders would be repaid first, then the remaining bitcoins is being distributed among the recovery right token holders. Hence, this recovery right token is used to compensate individuals whose assests or properties were stolen and are recovered.
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