Crypto-Carrot slices

by Marius Wlassak Business Media Consultant

Def's about crypto-carrot slices named tokens

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1. What is a token?

A token is an accounting unit that is used to represent a digital balance in a certain asset.

Accounting for tokens is maintained in the database on the basis of blocking technology,

and access to them is done through special applications using electronic signature schemes.

2. What are the types of tokens?

a. Equity tokens - represent the company's shares.

b. Utility tokens - reflect some value within the business model of the online platform (reputation, scores for certain actions, game currency).

c. Asset-backed tokens - digital obligations for real goods or services (kilograms of carrots, hours of work of the builder, etc.).

3. What can a token be provided with?

Directly provided can be only asset-backed tokens. In this case, the token is a digital counterpart of a real (physical) asset or service.

For example, one token can be equated to one square meter of living space or the ability to go for one session to a movie theater.

The guarantor of the conversion of the token into security is the organization itself, which stores goods or provides services.

4. What is asset tokenizing?

Tokenizing - a process of transformation of accounting and asset management, in which each asset is represented in the form of a digital token.

The essence of tokenizing is the creation of digital analogs for real values with the aim of quickly and safely working with them.

For example, the owner of a bakery creates an electronic accounting system in which he issues digital obligations for rolls - tokens.

Having a fairly good reputation, the owner of a bakery can pre-sell rolls, selling tokens on trading floors on the Internet.

In this case, any owner of tokens can come to the bakery and exchange one token for one roll.

5. What is the difference between a token and a crypto currency?

Unlike crypto-currencies, tokens can be emitted centrally (under the control of one organization), and decentralized (under the management of a predetermined algorithm).

Processing and acceptance of transactions can also be performed centrally (all servers are controlled by one organization).

The formation of the price of tokens can depend not only on the balance of supply and demand, but also on additional aspects (binding to an external asset, conditional emission rules or payments (earnings).

In addition, unlike the crypto-currency, the token does not have its own blocking.

6. How to buy tokens?

Tokens can be bought through online trading services (exchanges and exchangers), or in personal transactions (the buyer and seller agree personally).

The very process of token trading is identical to the process of trading crypto-currencies.

In addition, issuers of tokens often embed in the web pages of their projects the possibility of buying tokens through traditional electronic means of payment.

7. Where to store the tokens?

In the processes of transfer and storage, tokens are similar to crypto-currencies.

To do this, special purses are used, which realize the storage and processing of keys, as well as the formation and signing of transactions.

Typically, these applications are part of the infrastructure of the tokenizing platform.

8. What are the benefits of tokenizing?

a. Accelerates the trading process, as it does not require the movement of real assets and registration of documents for property rights.

b. Increases the security of storage and transfer by accounting transactions on the basis of blocking technology.

c. Removes the need to trust intermediaries, since their participation can be described at the level of a smart contract or they can be excluded from the chain.

d. Increases the functionality of the infrastructure, extends the platform by adding additional modules (multi-level authentication, invoicing, regular payments, replenishment cards).

e. Improves usability, because many of the features of the platform can be integrated into the user mobile application interface.

9. What are the advantages of blockage in the process of tokenizing?

a. Organization of a reliable database (ensuring verification of the integrity and reliability of data for each next state of the system).

b. Decentralization of failure point (processing and acceptance of the transaction by a number of independent servers).

c. Organization of a reliable audit (full verification of the correctness of the entire history of changes on the platform by the auditor).

10. What are the risks and problems of tokenizing?

a. Personal keys of users can be lost or stolen by hackers, which can not be predicted and insured.

b. Ensuring confidentiality in public lockers is a difficult task, since for the process of transaction verification their data must be opened.

c. The complex task of scaling in a decentralized accounting system, since a decentralized database has a strict bandwidth restriction.