The new era of technological advancements brings about new and improved measures of safety and security. When it comes to owning shares in a company or acquiring a stock certificate, there is typically a bit of risk involved.
Luckily, blockchain exists now and is prepared to make the digital world as safe as it possibly can be. Security tokens are just another great example of how blockchain is improving the age of the internet.
What is a Security Token?
A security token is a virtual token that represents a share held in an organization or the equivalent of a stock certificate. Since they are issued on the blockchain, they’re safer than more traditional security methods. This allows for the verification of ownership, as well as the possibility of fractional ownership.
By using smart contracts, security tokens allow investors to protect themselves without having to use any third party systems. It also makes the entire process of investing a whole lot simpler. Although the technology itself is more complex and requires the user to have a solid grasp on how it works, it’s a small price to pay for the value a security token brings.
While there was never a question that you could purchase stock in any given company, doing it with a security token on the blockchain makes it quick and easy. There’s really nothing better than doing half the work for twice the reward. That’s one of the things that makes security tokens so neat. It’s much less involved, but at the same time, it’s more secure than doing it any other way.
Why They are Useful
The security token is an incredible tool for investors. They allow for 24/7 trading, reduction in costs, increased liquidity, better access to digital assets, and more. Corporations are able to have a significantly easier time with public promotion as security tokens don’t have hidden costs or extra fees. Companies have better opportunities to earn a lot of capital if they already have a high value as a global business. Bringing the finance world into the blockchain realm opens up many doors for other new technologies and tools to be available in the future.
Our friends at Fairmint are using security tokens to help companies use decentralized technology to take their organization to the next level. Fairmint allows businesses to provide a specialized investment opportunity directly within their webpage, without the need for a license. Stakeholders can purchase securities easily with no interference from the company itself. By using their Continuous Agreement for Future Equity (CAFE), qualified investors are able to invest and participate in the growth of the company, hassle free. For better equity, Fairmint is the way to go.
With security tokens making life easier for companies and investors alike, the future is bound to be the home of more new, improved advancements in technology.