A question that everyone is asking what will 2019 bring us? 2019 may be the year of the security token? ICO’s, initial coin offerings, did this bubble finally burst? ICO’s have known a massive growth in 2017 and in the first half of 2018 and the swiftly expanding fundraising model didn’t leave anyone unaware. 2017 was the year in which the crypto world was as it’s utmost best. It was also the year in which most investors earned good money from ICO`s and the Bitcoin together with all the altcoins sky rocked.
The problem with the IC’s is the lack of transparency. This lack of transparency has made it easy for Ponzi schemes to scam people through such ICO`s giving the name a bad reputation. However, a various number of successful projects have started during the ICO reign.
What are Security tokens?
With security tokens investors simply buy a financial product through Blockchain, for example it might be a share in a company, but it might also be in real estate. Investors earn profit through dividends of the profits of the company.
Why security tokens?
Property stocks can be sold easier through Security tokens. At this time property stocks are purchased in large quantities. The purchase goes through so-called REITS (Real estate Investment Trusts). Through a REIT you actually buy a package of property stocks. For example, an office building or shopping mall. Buying and selling them often difficult. It takes a lot of paperwork and a notary, and you must have a lot of money to get in. This is where security tokens might come in handy. Shares can then be cut up into smaller parts, so smaller investors can also buy a share in a real estate project. The positive about such security tokens is that they offer far greater flexibility and protection. But we shouldn’t see or deal with STO`s as a replacement for ICO`s. Different countries already have showed their interest in both ICO`s and STO`s and have constructed regulatory frameworks in order to engage STO and ICO organizers.
Anyone can buy security tokens. Large institutional parties but also individuals. But before the market knows a boom still a lot should happen. According to many experts at this point what the market needs is the permission of the SEC. Clear rules and regulations need to be formed for this market to grow.