Tokens = Ownership

I guess we can all agree that tokens are the new stocks, they are help represent ownership of an asset and most times they are the assets. Let’s do a little comparison between token and stock, stock is known as owning a piece of a company, which can be traded in an open stock market. The stock market value is based on the company’s performance, when the company is doing absolutely well and make profit, the value of the stock market increases, sometimes investors who own a particular stock get interest for owning the stock. This is because owning the stock means you own part of the company, so the company makes gain, you make gain as well. Stock is highly centralized right, to access stock you need to go through a broker. There is a limited amount of time you can trade stocks, trading time is open 5 days a week.

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This is just a brief description of stock, but what other utility do you think stock has? It can’t be stored safely in a wallet, it can not be transferred digitally from one person to other like tokens, owning a stock doesn’t give you ownership right of that company and business decision made by the company doesn’t depend on the stock holder. With token we see most of the features stock is lacking on tokens, because with tokens, ownership inscribing is not limited to one asset, you can utilize it to fit all. Let’s look at NFTs, we saw what tokens did with NFTs, where ownership was inscribed in arts, real estate and social status. Look at the friendtech that was launched few weeks ago, tokens were used to represent social status of individuals through their friendtech value.

Since we are still exploring the technology, token utility is still limitless. It’s just a matter of time before companies will switch from stock to tokens, this is because of the trading time limit stocks have. With tokens, you can trade 24/7, liquidity can flow anytime and anywhere. With stocks you need the court to bound the agreements of ownership, but with token everything is controlled through smart contract. Tokens are more decentralized than stocks, allowing holders to perform their governance right.

Posted Using InLeo Alpha