Bitcoin Globaln News
(BGN)
September 20, 2018 -- ADVFN Crypto
NewsWire -- No, it is not simply a regulatory definition for a
Cryptocurrency. It is also not some sort of plot to thwart
Satoshi’s original vision for handing the ownership of money back
to the average person.
In truth, the definition and
overall existence of Security Tokens seems to lie somewhere in
between a regulatory definition for Cryptocurrencies and something
else entirely.
As some of you may already be
aware, Medium is a website that is becoming more and more important
to the Blockchain industry by the day, because the space’s current
thought leaders continue to congregate and publish pieces
there.
One writer who is swiftly becoming
a thought leader, due to the success of his Twitter following, his
podcast, as well as his asset management firm, is Anthony
Pompliano. Pompliano has positioned himself as authority in the
space by avoiding bashing certain coins, while shilling others.
Instead, he focuses on applying his overall business knowledge to
the development of the space.
To pause for a moment here, if you
do not already know, in the Crypto space, shilling refers to openly
pushing people to invest in a certain Cryptocurrency because of all
of the great things that you’re telling them about it. In more
concrete terms, if you’re a shill, you’re like an informercial
charlatan.
In Pompliano’s work, what he seems
to champion is achieving a consistently balanced analysis of the
Cryptocurrency space, which will be helpful to institutional and
individual investors alike.
His article on security tokens is
no exception to this rule. In it, Pompliano or “Pomp,” as he likes
to be called, gets into all sides of the security token debate in
an attempt to come to a universal understanding of how we can
understand security tokens.
In the beginning, in order to take
the suggested framework of a security token as true, according to
Pomp, we have to take the Swiss Financial Market Supervisory
Authority’s regulatory definition of the types of Cryptocurrencies
as true.
What this office or FINMA says
about Cryptocurrencies is that they can be classified as three
types: payment tokens, utility tokens and security tokens, which
are also called “asset tokens.”
Pomp then shares the accepted
definition of these types of Crypto coins, which boil down to:
payment tokens are a means of currency or payment, while utility
tokens are used to gain access to some sort of digital platform.
Following this, he makes clear that the situation is a bit more
complicated, with regards to defining security tokens and their
place in the Blockchain industry.
In short, he mentions the current
regulatory definition of security tokens, which basically amounts
to them being a way of connecting a Cryptocurrency, with some sort
of existing financial product or asset. In connection with this, he
adds that the main utility of a security token is in its use as a
proof of ownership as well as bridge for the average investor to
reach specialized assets without the help of an investment
firm.
Even though his piece is much more
comprehensive on this subject and goes into just about every
possible niche use case for security tokens, for now, we will focus
on the question that this idea of a bridge raises.
If Cryptocurrencies already exist
which allow the everyman and everywoman to invest in typically
specialized investment products, without the help of an investment
firm, then where is the incentive for Wall Street and the rest of
the traditional finance world to continue to support the rise of
Blockchain technology?
On one level, it appears that all
this existence of a bridge would require is a pivot from investment
firms from more personalized assistance to a Blockchain model of
doing business. In other words, they might just have to learn to be
more hands off, while still making a profit in new ways.
The issue that appears to remain if
all of this is true is: where exactly will these profits come
from?
Answering this question would
require the input of firms who have adopted the Blockchain and yet
kept their traditional lines of business, therefore continuing
forward with hybrid business models. Even without this specialized,
proprietary knowledge, it is still possible to make one major
conclusion on how a security token could benefit an investment firm
or any traditional business.
Because they ostensibly increase
the efficiency of business processes, especially those that are
paperwork intensive, then they may also be said to ostensibly
increase decrease the cost of these processes. What is perhaps the
prime example of how this can play out is almost any business deal
can be settled instantly, at least in theory. For true examples of
why this works, take a look at the inner workings of smart
contracts.
If enterprising firms who hope to
succeed in a swiftly changing financial world start here, then they
just might become the disruptors instead of those who become
obsolete.
By: BGN Editorial Staff
News:
Cryptocurrencies