Today we will talk about the differences between Security and Utility Tokens, so you can have a better understanding of this world. But, since you are here reading this, you might have a little bit of knowledge about this topic, but it is not fully understood. That is what we will do today, dive you in the deeps so you can fully understand these terms.
What is a Token?
A crypto token is a virtual currency or a value of a cryptocurrency. It represents a tradable asset or utility that is part of its own blockchain and allows the holder to use it for investment or economic purposes.
They are released when a company is developing an ICO (Initial Coin Offering), where you get a token in exchange for your investment. It can be used for future investments in the same platform if there exists a marketplace or trade it on exchanges.
What is a Utility Token?
A Utility Token has value, but it cannot be straightly money. But it can also provide value to each investor in different ways. It can give access to a future product or service. As we stated in the beginning, this Utility Token is going under the name of an ICO, where a company sells it.
Shortly, it can be used in exchange for something else. For example, an Uber Token can be used to pay for an Uber ride. Simple, right?
Another example, straight on our case is the GeniuX Token. You can buy it from the Private and Pre-Sale on our platform and exchange it in the future for STOs in various and great projects, from real estate to art.
What is a Security Token?
A Security Token is a digital asset that draws its value from an outer asset that can be traded- for example, stocks or real estate. The main purpose when designing a Security Token is an investment. If a company releases a Security Token it will not pe be called an ICO, but an STO (Security Token Offering) and should be registered with the needed financial market authority. Above all of this, it is necessary better attention when developing them because the most important thing is the safeness since it should be less vulnerable to fraud and exploitation.
People who hold the Security Token will also gain ownership of that asset. In the case of a real estate asset, in which more than one user invest, there will be a co-owning status of the purchase.
A Security Token works like this: dividends resulting from the investment are in the form of additional coins and are given to users every time the company gets a profit on that asset.
One or both?
As an ICO releaser and a marketplace in our portfolio, we certainly say BOTH. You can always start with the ICO, and trade it more and more, but you can also use it in exchange for different STOs, and this way, you invest once for double earnings. Sounds great? We agree!
But our opinion can be confusing for some of you, but that is not a problem. You can start by investing in just one of them and see how it goes. You may be good on the side of trading, or you can be an expert at investing in assets, or, crème de la crème, you can be excellent in both.
If you are still not sure about how this works, you can visit our website here and look around. Our minimum investment in the ICO is only 150 USDT. So you can start with the ICO and stay tuned for the upcoming STO projects that will be uploaded on the marketplace and diversify your portfolio and also create a passive income from scratch.
See you there!