Know your tokens: Encrypted assets are unequal


nnnIn the wake of the trip: the block chain tokens are not independent of the concept, but in a variety of different functions and forms exist. It is a digital form of something, but it does not change its nature. So the behavior of issuing various tokens does not fundamentally change anything. And the token can be divided by the function of many types, but there will be cross between the various functions. While the encrypted currency is just one of them. Investors who want to make long-term investments therefore need to raise a series of questions about tokens and participate in their own circumstances.n
nnTranslation: Annie_Xun
nPavel Kravchenko is the founder of the Distributed Lab.n
nHe explains the details of the encrypted tokens in the text, the existing categories and their differences.n
nThe best interpretation of the term “tokens” is the balance of an account.n
nBut perhaps most importantly, it is the balance that can actually represent the intention of the creator. So far, token generation represents the user’s reputation (augur), dollar bank, the number of files stored, and the bitcoin of an internal monetary system.n
nSo I sometimes say that the tokens do not exist, mainly because I want to remind people to pay attention to the fact that they always have a very special meaning.n
nIf you want an analogy, the token can turn everything you see in the paper format into numbers, such as stocks, funds, and promissory notes. But the terms we add to these things will not change (stock or stock). Encrypted assets are stored in a de-centric accounting system, or the fact that a digital signature is required does not change their meaning or value.n
nSo the problem is not the exact term itself, but people began to give the token it can not have the characteristics.n
nSome people say that encryption token is a new thing, the issue of tokens on the project may achieve amazing changes.n
nUnfortunately, that is not true.n
nn
nTokens and tokensn
nIn computer terminology, “token” means two things: a small device (such as a dongle or a special thumb drive) that can be granted to a user, or a fixed symbol group (such as an API key) that represents a user’s identity.n
nIn both cases, the token can be passed between different holders. So what is the difference between the encrypted currency and the token we know?n
nOften, the term “encrypted asset” means three different things:n
nn1, to the central distribution and trading of an encrypted currencyn
n2, a digital asset, issued to the center of the system, by someone or something to protect. This classification can be further divided into two categories: either the billing system is not trusted, or the issuer is not trustedn
n3, with the agency issued and verified things, but there is no support for anythingn
nnWe can use a simple chart to summarize the above possibilities:n
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nPayPal independently manages the digital balance and handles transactions. Means that its users must trust PayPal in an absolute way to use their system.n
nBitcoin deals completely transparently in a completely decentralized way, because in any case people do not trust anonymous systems.n
nTether is completely transparently processed (even better than Bitcoin), but the user must trust the reliability of its distribution (100% of each token is supported by the cash in the bank account).n
nThe centralized land registration requires the user to trust the correctness of the bookkeeping, yet there is no problem with the issue (since the new land can not appear out of thin air and all the land is real).n
nn
nTokensn
nSo what are the tokens, what are the differences between them?n
nA token can have any of the following or several functions:n
nn1, a currency, is the payment system between the participantsn
n2, a digital asset, (a digital interest, such as land ownership or ownership of a library of tomatoes and similar assets)n
n3, a billing method (API call times, upload traffic)n
n4, the stock of a particular start-up companyn
n5, a way to reward the main participants (the best case is Bitcoin)n
n6, to prevent attacks (such as the coin network in the commission)n
n7, the cost of using a systemn
nnHowever, because of the many options, it may be difficult to divide the kind of coins; usually the stock, the internal currency and the accounting unit cross.n
nFor example, the tokens directly associated with the company’s stock do not need to be considered too much: they are completely similar to stocks. More complicated is the so-called “utility tokens”.n
nRemember that this token is used for internal payments, but their prices will rise due to circulation restrictions and rising demand. The exact reason is that the dual function can not be clearly defined. Sometimes they behave like stocks in the market, but they are treated as accounting units.n
nIn addition, people sometimes use them to pay each other.n
n”Functional tokens” is best defined from Vladimir Dubinin (my business partner). He will be on behalf of the coin sales of government bonds. These bonds use the national currency representative, the profit is also paid in this currency.n
nThese bonds seem to be big discount sales, but if all goes well, the currency exchange rate may rise rapidly.n
nTherefore, we should not forget that no country wants to appreciate its own currency, because it will lead to economic recession, the balance of payments have a news of the impact.n
nInvestors need to answer questions:n
nI would like to say that investors to answer the main question is:n
nn1, what do these tokens represent?n
n2 Is it a stock, an internal currency or a unit of account?n
n3, what will lead to the rise in the value of tokens?n
n4, the circulation is limited, you need to hold tokens to complete each transaction?n
n5, growth potential, this product has the potential of all the needs of the world?n
n6, if the token needs 1,000 US dollars, whether the product needs. In other words, the heat of the product itself will become its Achilles heel? For example, if a $ 1,000 token transaction costs a token, can the user accept and bear?n
n7, no token after the product can continue to exist? For example, there is no bit coin tokens of the bitcoin can not work, and the right way can easily do.n
nnIn short, it is necessary to think of such a token if it is considered as one of the long-term portfolios; rather than for the purpose of speculation.n
nI personally feel that the encrypted asset market will continue to overheat. It is best to postpone the time to enter the market.n

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