INTRODUCTION
In 2008, Satoshi Nakamoto began a new era of digital economy by creating a blockchain technology and the first cryptocurrency based on it - Bitcoin. It quickly occurred that it is developing very dynamically and has a huge potential to revolutionize our future.
Many people became fascinated by this technology and opportunities that it provides. This resulted in hundreds of thousands of magnificent projects, which use blockchain technology to disturb and improve both common problems of our lives and complex technological issues. Those are called ICOs, which stands for Initial Coin Offering.
Unfortunately, a lot of people have not understood the idea of ICO properly which resulted in many unsuccessful projects that simply aimed to improve the creator's business while not adding anything valuable to the community. Due to such approach, Ethereum price dropped considerably (as most of ICOs are based on it) and blockchain community started to ask themselves a question: are ICOs a future of blockchain?
SECURITY TOKENS
| Security tokens came up as a potential solution to these problems. Their first and the most important advantage is being based on real assets, by contrast to Utility Tokens which actually do not represent any real value and therefore are hard to properly evaluate. |  ___________________________ |
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The best example is Bitcoin which started from the price of a few cents in 2009 and currently is worth about $4,000. This happens because the price of Utility Tokens depends on many factors, such as the level of excitement about a particular project or activity in its social media. These factors are very easy to manipulate, so the price can be more or less controlled. Such conditions are unacceptable for accredited investors and results in a lack of confidence.
If it comes to security tokens, their value is determined on the basis of assets such as real estate, venture capital funds or equity and individual houses. This means that they act very similar to traditional securities. Their value will not fluctuate like in the case of Utility Tokens, because real assets are far more stable. If someone decides to tokenize his hotel, you will be able to buy a token which represents your ownership over a part of it. Its price depends only on the overall price of this particular hotel. Whereas if you own Ethereum or any other utility you actually do not own any part of the Ethereum company, you do not gain any voting rights or profit distribution.
So far, there are several platforms that offer to pass through the process of Security Token creation without any trouble, such as Polymath, Harbor, Smart Valor or Templum.
Quite exciting, right? Let's take a closer look at how to run Security Token on Polymath!
SHARE YOUR VIEW
Do you think Security Tokens have the potential to revolutionize Blockchain? Will Polymath become the second Ethereum? I would love to hear your opinion!
Ethereum & ERC20 Token Wallet
- Issuing a security token on Polymath requires performing several transactions with ETH and POLY tokens in a Kovan Test Network. Therefore, you will need MetaMask wallet that supports these features. You can download its browser extension here.
| We will issue our securiy token in the Kovan Test Network (it will provide us with a possibility of testing Polymath for free) so you need to set your wallet to it. |  (pic source: https://polymath.network/) |
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- Then, you need to get some Kovan ETH to be able to cover gas costs (transaction fee). Simply join their Gitter channel and post your Ethereum address (you can get it from MetaMask) to the main chat. After a few seconds you should receive one Kovan ETH.
- After receiving ETH go to the Kovan POLY Token on Etherscan: https://kovan.etherscan.io/address/0xb06d72a24df50d4e2cac133b320c5e7de3ef94cb. Select Write Contract then Connect with Metamask. The red icon should turn green indicating a successful connection.
- Scroll down to getTokens tab and enter the amount of POLY tokens. To receive 20,500 POLY which you will need to complete the token creation process input a 205E+20 value. Then, provide your Ethereum address.
| Click Write and the transaction window should pop-up. If nothing happened you need to manually open the MetaMask extension. Click Submit to realize transaction. |  source:https://polymath.network/ |
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| Open MetaMask, click Tokens, then Add Token. |  |
| Input the POLY contract address: 0xB06d72a24df50D4E2cAC133B320c5E7DE3ef94cB. Then, change the token symbol to K-POLY. |  |
| Now, your 20,500 POLY tokens should appear in MetaMask! |  |
TOKEN CREATION PROCESS
- Go to Polymath site: https://polymath.network and clickCreate Security Token. Firstly, provide Polymath with your details.
- After submitting your details, MetaMask notification should pop-up. Click Sign to connect Polymath with your wallet (make sure it is set to the Kovan Test Net).
- Create your account by providing your name and email.
- Enter your token symbol and name to reserve them. This operation will charge you with a payment of 250 POLY.
- Completion of the token reservation requires two wallet transaction. The first one is a transfer of 250 POLY tokens and the second one is used to pay the Kovan Test Net fee. You have to submit both transactions in MetaMask.
- Check the correctness and verify your email address.
Your Polymath dashboard is integrated with several providers to streamline your on-boarding process and access to their services. The information you enter in each associated form will be sent automatically to the firm you apply for. Upon review of your information, the firm will contact you directly to establish the applicable next steps.
Polymath provides you with companies that may help you with Advisory, Legal, KYC/AML, Marketing, and Custody Service. Obviously, you do not have to choose any providers if you have your own.
- Complete the process of configuration and create your token (this will charge you with the payment of 250 POLY).
- As previously, submit both transactions in MetaMask.
As a next step, you may now elect to mint tokens for existing shareholders, affiliates or for your reserve. Note that manual minting will no longer be available once you schedule an offering for this token.
Alternatively, you can also skip this step.
- Select an appropriate template for your token offering. Currently there is the only one available.
- Configure your offering by providing financial details and timing, then click Deploy and schedule STO. This operation will charge you with the cost of 20,000 POLY.
- Submit both transactions in MetaMask.
- As the last step, import the whitelist of Ethereum addresses which will be able to participate in your STO.
That's it! You have successfully created your first Security Token! I hope that the creation process will let you better understand the difference between ICO and STO.
Author: @neavvy
Great piece of work @neavvy
In my opinion current market condition will not change until STO will become more popular. This is the only way to recover investors trust.
Right now ICO do not seem to bring much of this trust and even the best projects launchi out there suffer heavily. Security Tokens are the way to go. That's just simple as that.
Just like you said:
I've been thiking a lot about STO and their future. And what is main difference between them and ICO? Let's look at STEEM (as an example).
Steemit Inc. is holding majority of STEEM and they are selling it to cover their expenses. They can sell all of it if they only want to and nothing can stop them. There is no risk at their end because they are not selling the ownership. So they can drop the price as much as they want without any restrictions and fear.
At the same time what would happend if STEEM would be backed by real assets and those who would purchase STEEM would be purchasing ownership of Steemit Inc? Price would never drop so much. Simple as that. Steemit Inc. would stop flooding market with cheap tokens in fear, that some other giant can buy it easily and become the owner of their business.
That is HUGE difference. The biggest problem with ICO is that currently those companies that are launching them are usually the reason why price is falling down. Because they are selling as much as they can. No matter what.
And this would not happend if they would be selling ownership to their own business. Would you agree @neavvy?
Yours
Piotr
Firstly, I wish to express my gratitude for your constant support @crypto.piotr :)
I fully agree with you. Current crisis shows that Blockchain technology needs radical changes. ICOs were sufficient when the level of trust among community was quite high. Unfortunately, this trust was based on constant growth of Bitcoin price and success of every ICO. When bear market has begun companies and community got panicky and started to sell their tokens rapidly (btw your comparison to Steemit is brilliant).
However, I think that current crisis may lead to a positive consequences. In "traditional" economy it is a time when market is cleaned up of unprofitable businesses. The same thing may happen in Blockchain, as it is no longer profitable to run a shoddy ICO. This may also result in a situation when it is only economic to run an STO which will certainly make them more popualr.
That's very good point. The situation when company is selling ownership is probably also more comfortable for itself. They wouldn't be afraid that price will fluctuate significantly which may cause a loss of 30% of their funds overnight.
Greetings,
Jan
I love to see how responsive you are @neavvy. That's just way to go :)
Steemit need people like US :)
Thank you. I figured that it will be easier "to feel" this kind of comparison since we're all affected with price of STEEM.
If you would look closer at companies on traditional stock market (like facebook) then you would notice that sometimes those companies are re-buing their own shares. Something that hardly ever happend here in crypto-space. So it's not only constant selling pressure coming out from those businesses launching token.
When the price go down they are sometimes buying "back the ownership" to their own business. This way they also ensure some sort of stability of price of their own shares. Which in long run builds more investors trust.
Cheers buddy, Piotr
This huge difference meams a lot to blockchain and crypto.
@crypto.piotr thanks for inviting me for this great initiative.
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Indeed it really does @abidemiademok21
it really does ....
You pointed this out very good. If they are interested to keep ownership they could not sell all.
But if they want to take the money and go away they could sell all.
The other question is how it will be possible to get power (not only profit) from your token.
By a private limited company their will be every year meeting of shareholders- would be something like this also by companies based on security tokens ? maybe online ?
Voting with the DPos system like Steem would be interesting since in traditional markets your vote also depends on your stake.
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Thanks for the head's up in my wallet @crypto.piotr. This is 100% over my head as I am a weight loss coach barely understanding most of what goes on here. But I have a lot of crypto connections on twitter, so I tweeted :)
Thank you for your support and tweet @fitinfun. I have taken a look at your profile and it seems very interesting and qualitative. If I want to loss my weight I will definitely get on to you. Great to have so various people here on steemit :)
All the best,
Jan
Thank you very much. I hope I hear from you if I can ever help :)
Great article! I was brought here by @crypto.piotr. I have a question though, the tutorial you have written is on the kovan testnet. Do you know when the actual Polymath mainnet will be launched?
As with any utility token, it is important to prove that the network will only accept their native tokens for all functions. This tutorial is good as it proves that POLY is required for transactions on the Polymath network
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That's indeed very good question @culgin, @neavy
Janek do you know when will they launch their mainnet?
Cheers
Piotr
I appreciate your support very much @culgin! Indeed, tutorial is written in Kovan testnet, but this is due to economical reasons :) I just didn't want to spend 500 Poly tokens in order to create the test token. Actually, the Polymath mainnet already exists, so you can freely issue your token.
Greetings,
Jan
Very useful article indeed! I think security tokens have better future compared to ICOs. Crypto market has a tough time these days. I hope SCO will change this situation.
Thank you for your support @akdx!
As I stated in one of the previous comments:
So this tough time nowadays may have a positive impact on Security Tokens, which may have a positive impact on the condition of blockchain in the future. At least I hope so :)
All the best,
Jan
@crypto.piotr has set 4.000 STEEM bounty on this post!
Bounties are a new way you can earn rewards irrespective of you Steem Power. Go here to learn how bounties work.
Earn the bounty by commenting what you think the bounty creator wants to know from you.
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Happy Rewards Hunting!
Thank you so much @steem-bounty ...
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I love the idea of security tokens.
Sadly, in the United States selling a security without a license is a major criminal offense. To create and sell security tokens, one needs to become a licensed broker. One also needs to have a legal team on hand.
As I understand, this cost to become a broker starts at around $100,000.
What happens if you sell a security without a license is the SEC confiscates all of your property and you get thrown in jail.
I would love to see security tokens happen. Anyone selling a security token in the US needs to have a strong legal team at the ready.
This is why no-one has done this.
Hi @yintercept
I was actually wondering what would happened if company registered in Switzerland would launch their STO and allow US investors to purchase their tokens?
How could they possibly thrown anyone to jail? Any idea?
Yours
Piotr
A large number of companies register on the Isle of Jersey and in small nations in the Caribbean.
The SEC really has a hard time regulating companies outside of the United States. What they do is confiscate all properties in the states. But this, of course, hurts US standing abroad.
Quite frankly, I think a huge number of companies have been taking this route. They create entities outside the US so that they can hide assets from the regulatory excess of the SEC and IRS.
Hi @yintercept
I did not know that. Interesting fact. It seem that you're very knowledgable. Love the fact that I got to know you.
Im already hungry. And I do not mean that I want to eat some chicken. Im hungry for your knowledge :)
That make sense. Thank you for your valuable comment.
Appreciate it a lot. A LOT.
Wow, indeed you are knowledgeable @yintercept. Thank you for sharing with us :)
That's terrible for me. At the beginning of my journey with blockchain I was hoping this technology will break out of the current economical system, defining a new one, independent from the governments. What I am currently observing is blockchain being fitted to this system. Anyone who stands out from the crowd and wants to think differently ends up in a jail.
All the best,
Jan
The open ledger used by cyrpto-currency could still completely revolutionize investing.
The open ledger proves that most of the SEC regulations are superfluous.
The SEC has antiquated security laws. Crypto-currency has cracked open the doors to reform.
The crash in crypto-currency prices might be fortuitous. With crypto, people really are investing in nothing and that there is interest in new technologies.
The next step is to start creating real world securities. If people could start trading with real world securities, we could change the world.
Thank you for your reply @yintercept
Currently, the governments are afraid of cryptocurrencies because they take away the possibility of controlling citizens. It has to be admitted that users of crypto represent a small fraction of society, so there isn't enough pressure on SEC and governments to allow cryptocurrencies develop unproblematically.
In my opinion we need to build awareness among society in order to create such pressure.
Indeed, this opens up unimaginable possibilities.
Cheers,
Jan
The huge drop in the price of crypto shows that the crypto market can't survive on investing in cyber tokens alone.
My hope is that crypto enthusiasts take the leap from just trading tokens to actually trading securities.
This would put a huge pressure on the regulators.
Unfortunately, what will probably happen is the regulators will use sharp drop in crypto prices to justify more regulation.
I am not master on ICO's and i'm trying to understand everything even it is too difficult for me to understand english languages but i thank you bro for posting this useful information to us!
Looking forward more about your crypto post bro! God Bless!
Thank you for your support and desire for the knowledge even despite these difficulties @bien :)
God bless you too!
just come in and show my support,
i don't understand too much about bitcoin
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Thank you for your support very much @tanlikming
Greetings,
Jan
Hi @neavvy
I know you from @ crypto.piort and I really don't really understand the crypto world, but thank you for your support and greetings from me
hi @anitacarolina
Thank you for showing your support :) Im sorry for bothering you with topic that may not interest you.
All the best
Piotr
It is okay😊
hi @anitacarolina
Thank you for showing your support :) Im sorry for bothering you with topic that may not interest you.
All the best
Piotr
Thank you, I appreciate your support very much @anitacarolina :)
Greetings,
Jan
You're welcome @neavvy
In my humble opinion, transparency and honesty of the projects, rather than demonizing ICO or sanctifying STO, are the current problems that affect trust, with the natural implication in the loss of cryptocurrencies, which surely affect both an ICO and a STO and even to pretend to make STO popular in the future as it should be, according to my vision that I share with the good analysis of this publication.
I believe that the characteristics for ICO versus STO should be analyzed and enhanced in order to help restore confidence and even make the whole system more transparent (of course I prefer STO...).
In fact, I agree that security tokens in conjunction with smart contracts are the way forward, but necessarily improved in the transparency and honesty of the Blockchains projects associated with them...
Good Work Team, @neavvy & @crypto.piotr
I love your comment @josevasquez
Absolutely brilliant. You can tell that you know your stuff.
Have a great weekend ahead
Piotr
Thank you for sharing your point of view @josevasquez :) Indeed your knowledge is admirable.
Definitely we need it in a crypto world.
All the best,
Jan
Security tokens are definitely going to be the next stage of Crypto.
However, Polymath is not the next Ethereum.
Ethereum pioneered smart contracts; meanwhile, after reading this piece, I can see that Polymath is similar to a generic token launch platform, only it focuses on security tokens.
hi @hatu
Would you consider comparing Polymath to platforms like Waves, Bitshares or Eos?
yours
Piotr
I really feel that for a security token platform to become Ethereum's equivalent in the STO market, the platform needs:
Internal Exchange: Not much value to STOs if they lack the liquidity that had made ICO tokens so popular. The most popular Crypto exchanges are not approved to trade STOs. LAtoken is meant to work on filling this gap but there hasn't been much progress on their part.
Bureaucratic Experience: Once you enter securities, things become more traditional. As CCN once reported, SEC denied Gemini's Bitcoin ETF because the twins didn't look the part.
I wonder if STOs is not just another name for stocks?
Maybe they cost a few cents instead of dollars or euros, but the principle is the same, isn't it?
No, it's beyond stock, as those represent equity in a company.
STOs are, potentially, backed by any financial security or asset.
Ok sounds interesting, but in the end if you have f.e. part of real estate it can also raise or drop their worth.
hi @hatu
Thanks for your valuable comment
Why it does have to be an internal exchange? Polymath seems to be working well with tzero and that seems to be solution good enough. Or perhaps Im missing on something?
Definitely, current exchanges cannot be taken into consideration. I don't think that there can be any exchange which would allow trading both ICO and STO.
Yours
Piotr
What does Polymath do?
From this article, it seems that it just provides a platform to launch tokens for a very high cost. It seems to be nothing more than an ICO agency dedicated to security tokens.
Why is an internal exchange important?
Well...
What good are security tokens if there's no secondary market for them?
Current cryptocurrency exchanges cannot support them. A real STO platform is in reality an exchange that can support security tokens. Sure, they can even place an ICO launch platform in it; that won't take much effort.
On a closing note, I genuinely wonder what did Polymath spend its $200M+ ICO funds. Ethereum, Binance, NEO, ICON, MIOTA combined, were built with a fraction of that.
Hi @hatu
Did they raised that much? Well. Perhaps they have lost 70% of it already since market crashed so badly?
But yeah, I get your point.
Excellent and very informative post. Polymath, indeed, will revolutionise the crypto sphere. Thanks @crypto.piotr for inviting me to read this article.
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Hi there :)
It's great to see how responsive you are @himalayannomad
Have a pleasent weekend ahead,
Piotr
Thank you for your support and feedback @himalayannomad :)
Greetings,
Jan
Thanks for the invite to this post @crypto.piotr. Well written article about what STO is and the simple steps to set up an account for owning STO - Polymath.
STO to become a way to monetize assets has still not taken off. BUT same thing- delay in acceptance- goes for all the great ideas from Email to Bitcoin.
Keep Steemin!
Liked Voted and Resteemed
Thank you for your support @sarez :)
That's the point! I think rapid development of STOs is the matter of near future.
All the best,
Jan
hi @sarez
Im glad to hear that you're familiar with STO.
You've been very responsive and supportive. I will be happy to delegate 40 SP to you. Just give me 1-2 days so I could reply to all those comments (still over 100 of it ahead of me).
Yours
Piotr
Great analysis of the polymath STU creation process. But what does that mean for our Steem ecosystem? When most ICO will become STU how can Steem profit from this market? Should Steem related projects also think about KYC/AML and a more secured structure of there Tokensale?
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You raised very interesting and problematic questions @masterthematrix. Probably the greatest minds in Steemit's managment are trying to solve this issue :)
I think that Steemit and related projects definitely should reorganize their structure and make Steem more secure and resistant to speculations, because fluctuations in spectrum from $0.25 to $7 are unacceptable. However, I am not sure if KYC/AML are the proper solution, becuse Steemit establishes community which cannot be limited only to big investors.
In my opinion something needs to be changed directly in the way that content is distributed and rewarded, because it currently doesn't seem to depend on its quality.
All the best,
Jan
Hi @masterthematrix
Im not sure if we can see direct relation between STO and our Steem ecosystem. The only way I see that STO could benefit STEEM is related to trust. STO will bring more trust into this market and with trust there will be more money. So price of BTC will grow again, which naturally will reflect on price of Steem.
Would you agree?
Yours
Piotr
This is a well-written and thoroughly explained article here @neavvy
Thanks @crypto.piotr for bringing me here.
This is a great read.
I appreciate your support @maryclare :)
Cheers,
Jan
Pleasure is all mine @maryclare :) Im glad you dropped by and showed your support. Means a lot to us :)
yours, Piotr
Very comprehensive article on security tokens. I came here to thank you for supporting @crypto.piotr in his efforts to help out new Steemians, but I read your article and the comments. I recently saw an article about a security token being launched on Bitcoin Cash's blockchain, backed by diamonds. And one of your other articles about WAVES, I assume you saw they are up 50% today, presumably because of the launch of their new mobile app that allows you buy WAVES with a credit card (but not available in the US as usual!)
Thank you for being so responsive @blueeyes8960
:)
We both appreciate your time and support
Have a great weekend ahead,
Yours
Piotr
Thank for your support @blueeyes8960
Wow, that's really interesting. Do you remember the name of this token? I would like to find out more about it :)
I wasn't aware about that. Great to see this project developing so dynamically.
Greetings,
Jan
Here's the article I read about the diamond backed coin to run on Bitcoin Cash blockchain:
https://ibsintelligence.com/ibs-journal/blockchain-powered-diamond-platform-moves-to-bitcoin-cash/
Here's another I found though when I was searching for the article I had read before:
https://cdiamondcoin.com/#whitepaper
I was sent this link by @crypto.piotr And found it very interesting, although way above my head, but I will continue to follow your posts and see if I can gain more knowledge into how this may be a big part of the new crypto world.
Hi there :)
It's great to see how responsive you are @andyjem
Have a pleasant weekend ahead,
Piotr
I may not have voting power @crypto.piotr but I can still have my say, which costs nothing. People who post good content deserve our support however small 😎
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I appreciate your support very much @andyjem!
yeah, in my opinion it is definitely going to be :)
Greetings,
Jan
Thank you Jan. Keep up the good work. I am eager to learn more about how the blockchain works. We need people like you to help the newcomers to this very exciting platform. 😎
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Another form of keeping securities (stocks) with digital currency.
What I can say to it is that it is an investment opportunity for potential crypto investors to divert their attention towards investing with their money.
I really support this great development anyway awareness is much more needed.
So I will advice everyone to resteem this post so that potential supporters will see it
Thanks @crypto.piotr for inviting me
##signed
A²¹
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Definitely yes. I really appreciate your support @abidemiademok21
All the best,
Jan
Hello, @neavy! The reason to drop you a comment here is the personal recommendation of @crypto.piotr who made me aware of your support for his contest. I'd just like to say Thank you and will gladly follow you!
Best wishes!
Thank you for your support @ravijojla, obviously I will follow you too :)
Hi there :)
It's great to see how responsive and supportive you are @ravijojla
Have a pleasant weekend ahead,
Piotr
I do not know much about it yet but you have explored very good ways and our friend @crypto.piotr made a suggestion, so I came and checked it very well.
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Hi there :)
It's great to see how responsive and supportive you are @vickykarma
Have a pleasant weekend ahead,
Piotr
I really appreciate your support @vickykarma :)
All the best,
Jan
I may be on the other side of this. I think that the security token might not be a great thing for crypto if it makes it the same as a stock market item. The stock markets are artificially high but they are listed as securities so where’s the trust in that phony system? I think it also limits decentralization. What do you think?
Hi @cmplxty
Trust will come with the fact that purchasing STO tokens will means that you're purchasing some ownership of company that is behind it.
Example: Right now Steemit can flood market with cheap STEEM to cover their costs (which are mostly in fiat) without any fear that someone will take over their business and tell Ned and others BYE BYE.
That is a game changer (in my opinion). Does it make any sense?
Cheers
Piotr
Okay, I should be able to follow those instructions. Here in Western Australia the Government has decided that as of December the 1st. all conveyencing of property will be via blockchain. Sounds fine at first, then you find out that they set up the site as a monopoly that makes a profit and charges more than the old paper based transfer of property, after that throw into the mix that the federal government legislated to allow authorities to demand un encrypting of data to protect us against terrorist activities and then went on a 2 month holiday before it could be implemented. Wait, there's more: one of the banks has been rewriting the contracts to change the amount they receive with no explanation!
Wow, that sounds dismally @lucyho. So they only pretend to make a decentralized revolution while making your country even more centralized and depending on particular bank and company. It's just like my country organizing United Nations Climate Change Conference while maintaining that emitting CO2 to the atmosphere does not affect the climate. Insane.
All the best,
Jan
Hi @lucyho
That sounds like a big news. I didnt hear about it. Thx for letting us know.
Great comment . Seriously. Very informative and valuable
Cheers
Piotr
By sheer coincidence I as reading about STO few days ago. You have done the brilliant job in explaining the polymath role in STO.
Actually SEC is currently evaluating ICO on its own parameter to check whether ICO is security or utility. If it falls on security then it need to be registered with SEC to be able to raise fund in US. The STO concept gives more power to the regulatory authorities,investor are more secured in STO where ICO do not promise anything to investor and most of them scammed the investor.
I believe we still have pros and cons for STO.
Pros:
Actually you are investing in the real assets.
More regulated so very less chance of getting scammed.
They will be get support by institutions that are interested in blockchain but do not want to do ICO due to legal resons.
General public might get more interested to STO.
Cons:
STO/ICO are not legal in china so still a large market is out of scope.
I guess STO will not be decentralized , so it might not go well with cryto currency enthusiast
hi @r1s2g3
Great post buddy.
I didnt know that. Interesting and valuable information.
Yours
Piotr
Amazing comment @r1s2g3. Let me refer only to cons that you mentioned :)
That's indeed terrible situation, obsession about control of their government has really bad impact on the crypto world.
Unfortunately yes, STO will never be as decentralized as ICO so it looses part of its benefits. However, I think that this kind of centralization in the crypto world is somehow needed.
Greetings,
Jan
Great tutorial. If anyone thinks cryptocurrencies and smart contracts are difficult they should try some tutorials like yours. As for my views on STOs @knircky expressed them in his post https://steemit.com/security/@knircky/thoughts-about-security-tokens and my thoughts align with him. Short term price volatility is going to happen on everything. Even massive blue chip stocks like FB and many of the S&P500 stocks take dips every once in a while. I simply put my focus on solid projects that are bound to grow up. That's why I'm slowly increasing my STEEM account even though I've pretty much depleted my fiat reserves.
Thank you for sharing this article @vimukthi.
Interesting point of view. Short term price volatility is obviously unavoidable, even in case of big companies, but I think in case of utility tokens this volatility is long term and significantly more intense. Obviously there are interesting projects with potential like Steem, but I am afraid that this is still some kind of speculation where you can't be certain if something for which you transfer some value actually has this value.
Regards,
Jan
Great comment @vimukthi
And thanks for sharing that link. Going to read it before bedtime today :)
Cheers, Piotr
A lot of information for someone like me who knows nearly nothing about it. I did resteem your post and hope to reread and understand it better next times I read it. I follow you and hope some easier posts for dummies like me to read as well. If it comes to cryptocurrencies... by now there are so many and the Dutch taxes is already present, so it is no taxfree anonymous income nor payment for us. I doubt if they will overtake the banks as the idea was since the banks already interfere plus a fee is already payed for every transaction. I hope this will not turn out to be a hype.
Thank you @wakeupkitty for valuable comment and sharing your point of view :)
All the best,
Jan
Graecum est, non legitur.
I came to have a look at the request of crypto.piotr, hoping perhaps he might do the same for me some day, but I fear my 4-year Liberal Arts degree from a notorious Southern California party school has done little to prepare me for this.
Lebanese politics I can discuss intelligently, likewise the START treaty or the Punic Wars, or theory of insurgency, or history of the wars in Southeast Asia, even the basics of orbital mechanics (thank you, Kerbal Space Program), but this is definitely Greek to me.
I do however know enough about crypto to realise that I shouldn't be fardling around with things I don't understand. I'm just a simple old school HODLganger.
I really love your comment @redpossum. In order to cheer you up I will say that I have no idea about Lebanese politics, Punic Wars and theory of insurgency. I suppose we can learn a lot from each other :) Thank you very much for you support and I will definitely follow you closely because you seem to be really interesting person!
All the best,
Jan
This is interesting. I am considering tokenizing my ad-free cryptonews platform as a way to monetize it without subjecting the users to spammy ads and popups when they just want up to date information in the crypto space... dailycryptonews.org for anyone interested. I am considering making a proof of stake smart contract tied to the wallet the tokens are held in and so as the site increases in value so do the tokens and the hodlers. This is just an experimental idea for me but I may give it a go.
I was just visiting your site the other day @kryp70kn1gh7 and I was wondering what is your business strategy?
Is this site kept because of your passion towards crypto or are you planning to find a ways to monetize it?
What's your traffic if you dont mind me asking?
ps. I would consider changing color of your font. It's really hard to read. Dark blue on black background is not the best combination for users/readers.
Yours
Piotr
Hey,
Thank you very much for taking the time to review the site and I value your suggestions. I will change the font. It looked good on my monitor but I didn't think about everyone else. This is the kind of feed back I really need before trying to monetize it.
I have 3 plans for monetization. If you check out dailycryptonews.org/about then you can learn about 2 of them.
1.) A pay to blog service so coins and other crypto bloggers can promote their content by paying to make a post on the newsfeed.
2.) A crypto store where I will be selling crypto t-shirts, mining gear, and other swag/crypto goodies. I plan on offering these goods for sale for crypto only, no fiat will be accepted.
3.) My own product which I am developing the proto-type for right now. It is a digital piggy bank that earns the owner a passive crypto income using proof of stake technology. It will also be able to be upgraded so that users can run their own BTC lightning node to support the network and earn an additional small passive income... I don't know how popular they will be but I will be happy to make "mining" crypto affordable for the masses using the lightning network and proof of stake instead of power hungry, expensive proof of work... It will allow less tech savvy people, or just people who may not have the time to build such things and would rather just buy it pre-built from me, to get into crypto and earn some passively.
I have 18,000 followers that have subscribed to my mailing list since I launched in April and I intend to market these products and services that way, without ever sending "spam" in order to keep the site ad-free...
Wish me luck. I will need it, with these markets!
Dear @kryp70kn1gh7
Wow. What an amazing comment. I appreciate your time and effort. Seriously.
I love that concept. Seriously great! :)
18k followers? That's a lot. Seriously great job.
ps.
you're very responsive which is absolutely great and steemit community surely will benefit by having you here.
if you would ever like to keep in touch and support each other closer, then drop me a message [email protected].
This will allow us to communicate easier. Also I may help you to promote your website once it's ready. Out of charge. Simply because you're so very supportive and responsive on Steemit and I value your work already a lot.
No pressure of course,
Cheers, Piotr
Thanks, man. I really appreciate the support, it means a lot.
Firstly, I would like to say "thank you" for your support and amazing comments @kryp70kn1gh7.
I like the concept of your ad-free site and plans of monetization. I think every of them is interesting and definitely has potential, especially combined with 18,000 followers (wow).
The one suggestion I have is that when you go to a particular article the first thing that you actually see is still this bitcoin banner and categories. You have to scroll down in order to see the heading of article. In a first moment I thought that there is no article because there was no difference between starting page and it. Hope it helps :)
Wish you the best luck,
Jan
Thank you very much for letting me know. I will certainly see if I can't fix that on the next update. You rock. The feedback is much appreciate. Keep up the good work here on steemit!
So basically owning security tokens is similar to owning shares of a company where in you can really have influence like voting and stuff. I have been reading and hearing about security tokens a lot in the recent past. Your post has drawn more attention over the topic and would love to see more articles about securities from your side. I am more of a Mobile user than PC user so I don't think I can get metamask and get tokens. However I am going to try it and get it somehow. One last question: If security tokens are based on real world assets, can they be inflationary or deflationary like Ethereum and bitcoin respectively??
Because that really decided the price potential of coins sometimes.
With warm regards,
@n1hal
Hi @n1hal
Excellent question. The way I see it is that noone wants to sell ownership to their own business for very little.
Do you think Steemit Inc would be flooding market with cheap STEEM only to cover their crazy expenses if that would mean that they may be bought over very easily and then lose their jobs and being replaced with someone else?
I bet google/fb or some other giant would already do it. So it will be in interest of each business not to allow it to happend. Right now there is simply no fear and all those projects are panic selling whatever they have just to cover their costs.
Does it make any sense?
Yours
piotr
Hmm I think I get it. So let me frame it again in a better manner "Can security tokens nos. be altered once a real world asset is tokenized?"
Im sorry @n1hal
My knowledge is to limited to answer that question :(
I am afraid that I also didn't understand the question @n1hal. Could you rephrase?
I meant can the circulating supply be changed after tokenising a real world asset. Like Ethereum which keep on increasing or like BNB which keeps on burning it's tokens at regular intervals???
Thank you for your support @n1hal and good luck in process of creating your own token :)
All the best,
Jan
It is something of convenience, people only think about getting repounds, sometimes we can see projects that are dedicated to supporting common or very important things, they only take their project to the market to become ambitious and that makes me asic, but good I thought about making a crypto and take a stop or ico where you can help medicine with funds and among other things in my country Venezuela but it is a bit complicated for low resources ero to realize that take money for your own things is like something that does not fit in my head .....
thanks @cryptopiotr for showing me this publication, I understood a better the wonderful and the future of the economy which is the cryptocurrencies
Thank you for your amazing comment @memes777. Venezuela is really incredible country, I would like to visit it in the future. I know the situation in there is complicated and hard, but I think that blockchain may have powerful solutions to solve it.
Wish you all the best,
Jan
It really is something sad and hahaha except the economic Venezuela is very nice. The state Merida is something very beautiful I invite you to investigate and if you come notices would be good to know more people from the blockchain (although my English is not very good xd)
Perhaps the elusive satoshi nakamoto needs to buy back his bitcoin in order to recover the current low price. I figure something to do with the fed is causing this current crash as they feel threatened by the possibility of btc’s disruption of their control over the worlds money supply. It is somewhat unfortunate for all blockchain technology seems to be resting on the fate of bitcoin. Disrupting th disrupter of the primary disrupter. On and on. To put viable resources to a utility coin is a dangerous proposition in my opinion.
Thank you for your comment @jazzresin :)
Definitely yes. Current low price of Steem is only the effect of crisis of bitcoin and ethereum.
Why is it dangerous? Do you mean that if we put viable resources to a utility it will depend on bitcoin and may fluctuate like it?
All the best,
Jan
Dear @neavvy indeed. At least at this point in time. I am in disbelief that the price of bitcoin is so low. Some people have noted that this is probably due to end of year taxes avoidance but i have a feeling this low price is due to some controlling force aligned with the federal reserve. Crypto has certainly disrupted the fed....to the injury of all the fed is now disrupting cryptocurrency. Just two bits. Intuition only.
Thanks for your reply @jazzresin. Tax avoidance is an interesting hypothesis but consider that this time last year bitcoin had a record-breaking price, so in my opinion this cannot be the main reason of the current dip.
You are right, this is very probable.
Regards,
Jan
Hi @neavvy. Your post made me aware of polymath. I just wondering if I can tokenize a small apartment and share the net profits with investors. I see polymath offer advisors that probably can help me with legal & tax issues. However such advisory costs can turn my small project into an unfeasible business. Therefore, these security tokens could not be appropiate for small companies that want crowdfunding. Under such scenario, there is not decentralization.
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hi @caribehub
maybe it will be possible in the future. right now cost of entire process would be probably to big
But I know already that some luxurious appartments in manhattan in US are being tokenized. With small apartment it would simply not make much sense from financial point of view.
You would have to expect that those services are not cheap
Surely it's not for small companies. But your business don't have to be as big as it would have to be if you would like to enter wall street. Plus you can have an access to international market.
I've lost you here.
Great comment buddy,
Yours
Piotr
Hi @crypto.piotr. Thanks for your feedback. I gave some arguments to the extent that cryptocurrencies Will allow any individual to use its benefits. This is utopical. That's the reasoning behind the last comment. In fact, you're comments are valid. The article is also good. It opened this discussion and provided great insight. I Hope to see more of this
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Dear @caribehub
Seriously its great to see how responsive you are. Steemit indeed need more people like you.
Considering fact that author is just 17 years old, I would say that this article is a great piece of work :) right?
Have a great sunday ahead
Piotr
Interesting insights @caribehub. I suppose that Piotr has already resolved all of your doubts, so I will just express my grateful for your support :)
All the best,
Jan
Hi @neavvy. You put a lot of effort on your post. I really apreciated it. I'll try to provide feedback as much as I can.
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Hi, how are you? I really like to read about this type of project, but I was not clear about the objective of Polymath, I really do not know what this platform consists of. I would like you to give me a comment with the clarification. Thanks for your time to respond. Bye
Nice post, neavvy. You provided the steem community with a very lengthy and beneficial guide on using Polymath for security tokens. Thanks for the hard work.
You were upvoted for $0.01 and resteemed by @hobo.media. Follow for future random upvotes!
Thank you for such pleasant words @hobo.media :)
All the best,
Jan
STOs could be game changer indeed. Thanks for sharing the token creation process, @neavvy.
I also believe it will be game changer @zorank
I hope so @zorank. Thank you for your comment :)
All the best,
Jan
Great write up, to had written it in a very wonderful way, I hope it will be helpful for them who are interested in STO :)
Thank you for you support @freecrypto. I also hope it will be helpful :)
All the best,
Jan
It is fascinating how security has different directions ... I will share your publication so that other people read your wonderful analysis.
Thank you very much @leomaryszabala :)
Greetings,
Jan
Thanks crypto.piotr. nice @neavvy post mate lots of details which is great. I think for the common person they are very cynical and negative about crypto because of the bad press so not sure what they would think about token? Would you agree?
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Thank you for such kind words @steemingmark.
I think common people will become more unsuspicious about crypto thanks to security tokens. One of the most popular accusations about bitcoin is that it is used for illegal weapon or drugs trading. Mainstream does not understand the core of bitcoin so they are evaluating it basing on things they hear in media.
Security tokens are very similar to things we know from the traditional economy. They will be significantly more secure, as there are KYC/AML procedures. Therefore I suppose the public will become more trustful.
All the best,
Jan
Thanks for getting back to me. Great point I also think the mainstream see crypto going down but not the huge rise in the amount of people buying it. I look forward to the future of security tokens and crypto 😀😁
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Another form of keeping securities (stocks) with digital currency.
What I can say to it is that it is an investment opportunity for potential crypto investors to divert their attention towards investing with their money.
I really support this great development anyway awareness is much more needed.
So I will advice everyone to resteem this post so that potential supporters will see it
Thanks @crypto.piotr for inviting me
##signed
A²¹
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Hi @abidemiademok21
I really appreciate your support. Thank you!
Cheers,
Jan
I participated in the POLY airdrop months ago as I was excited given the potential of STOs becoming the next wave in the blockchain adoption cycle. The current bear market has delayed that progress but if you consider the amount of potential assets that could be tokenized like real estate, VC funds and others the potential to raise capital is enormous which truly plays into POLY and other projects models. I look forward to continue seeing the development in this area as it is a great example of how blockchain technology and disrupt an industry and lead more more efficiencies.
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Thank you for your amazing comment @newageinv!
You are right, security tokens will open up so many possibilities for the blockchain technology. Of course, the current bear market has delayed the progress, but a drop in the level of trust for ICOs may bring more popularity to STOs. I think this is a great opportunity.
Currently the biggest problem I see in STOs is that there is no possibility of trading with security tokens. Polymath and other similar platforms haven't implemented any decentralized exchange yet. It is also a serious issue in terms of architecture of independent exchanges.
Greetings,
Jan
I think this is about to change fairly soon. I think 2019 will be the year where security tokens start to find their ways to regulated exchanges. I am currently watching the tZERO project which has created its own STO and looks to open it to secondary trading on a regulated exchange sometime in 2019 using their technology and platforms. I think others will follow shortly thereafter!
Hi @newageinv
Great and valuable comment. Would you happend to know anything about Smart Valor? They are apparently also trying to tackle security tokens.
cheers, Piotr
I have not heard about that project...
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Excellent presentation on creating security tokens, I wish you continued success in this endeavor. At this time in my life I can barely keep up with new projects on Steemit and dTube, but I will follow you and resteem this for more exposure. Merry Christmas! 🎄
I appreciate your support very much @wonderwop.
Interesting. I will take look at those projects ;)
Merry Christmas!
Thank you @neavvy for your comment.
It is really funny that you mention Poly because my attention got drawn into security tokens a couple of weeks ago :)
You explained it better to me than several youtube videos I watched, so thank you for that. The platform is definalty something I will investigate further. I think current prices will drop even further and the market has to get faith again, maybe via security tokens.
Cheers
M
would you believe @mcnestler that @neavvy is just 17 years old? and he did just such a great job explaining it step by stem
some people are amazing
Cheers
Piotr
Crazy, really good job @neavvy :) I liked his text
Thank you for such pleasant words @crypto.piotr, @mcnestler :)
Hi @mcnestler
Great to hear that!
Wow, I fully agree with you. Something definitely has to be changed, and the Security tokens is the only appropriate direction that I am currently seeing.
All the best,
Jan
This is a very nice initiative, one that will rebuild trust in the cryptosphere but its a very complex one.
However I have some questions; How do we verify that the assets tokenized actually exist and how binding would the contract be on all parties involved?
Thank you for your comment @straighttalk :)
You raised very interesting questions:
I suppose that this is a responsibility of the country in which the company is registered. In many countries there are rigorous restrictions that securities have to meet. Taking a look at the American SEC which limits even honest companies I think they would never allow to offer tokenized asset that actually doesn't exist.
Also I think that Polymath or any other platform would never allow to that.
I am not sure if I understand the question properly. What do you mean by 'binding'?
Greetings,
Jan
This is great info. Thanks for sharing. I believe we need options about creating our own tokens. Each day this becomes almost a fashion but the difference will be done by the purpose or each project.
STEEM ON.
You are definitely right @theghost1980. Thank you for your support :)
All the best,
Jan
RE-steemed for you with pleasure.
Thank you for your support @shepz1
Greetings,
Jan
Most welcome, and hello from Poland. :-)
It is incredible to see how many fantastic Polish people are here on Steemit. Have a pleasant Saturday :)
I am originally from England :-) My wife is Polish, and we moved here almost 5 years ago, to escape the dull life in the UK.
Another stuff to learn . I just learn about ICO and STO from you account . Thanks for sharing , please share more for me to learn. Upvote and follow
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I am very happy to have an opportunity to share my knowledge with you @tommyl33. Thank you also for your feedback, I will definitely share more soon :)
Greetings,
Jan
Hello @neavvy a well written and balanced post indeed. A few months back I followed the same path and created tokens on the Polymath testnet.
It is an enriching experience before we go and spend our hard earned crypto to launch our STO.
It sure does let one test the waters before launching our crypto ship.
Thank you @thetimetravelerz
Initially I haven't known that it is possible to launch token on the testnet, so I have even bought 500 POLY tokens. I was just a step away from spending them when I realized that Polymath supports Kovan testnet :)
Greetings,
Jan
Oh my! You had said everything!
Thank you for providing us with very informative and useful writeup on security tokens. I like how you had explain in depth especially not all has the same knowledge on the matter, just like me. This is very handy for those who have plans in taking crypto seriously.
I believe this will have a great effect on the market. Investors have to fully decide which is more better.
Great work!
Cheers!
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Thank you for such kind words @maquemali
Definitely :)
All the best,
Jan
You are most welcome..
Have a blessed sunday! ❤
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Wow ... it's a very long writing, but it's interesting to read.
Your writing makes me think that the ICO is really doubted for the future, it needs a revolution as a whole about that, maybe STO becomes a logical mix for public trust.
Thank you for sharing @neavvy.
Thank you for your feedback @sudutpandang
I hope that STO will increase the trust among crypto community. Right now it is really big issue as even the biggest project may suddenly disappear or turn out to be a scam.
Greetings,
Jan
Which big project do you mean suddenly disappear and fraud my friend ...?
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For example, check out this article
As there is stated:
Crypto's biggest detraction comes in the form of hacks. Hopefully Security Tokens can put an end to it and make our lives happier as we continue to move toward a blockchain economy.
I hope so @cyemela :) Thanks for your support.
All the best,
Jan
Hi @neavvy,
Thanks for this article. I've been running into the STO concept recently but didn't exactly understand how they work. Thanks for clarifying it here.
I've been in the crypto scene for since 2014 and I have seen so many scams that I couldn't understand how people could trust all these ICO's. The nicer the whitepapers the more people threw their money after them. The nice packet doesn't make a good content.
Reading your article above makes me believe that STO's are a step in the good direction. STO's are something like shares of a company. Meaning that in theory every token has some real value.
Where is the asset behind a token?
What I didn't get (maybe you wrote it but I didn't find it) is how the real value object is linked to a token? If I sell parts of a hotel, how can the buyer be sure that I actually own the hotel? What guarantee does he have that I don't sell the hotel in the meantime?
Best regards,
Achim
hi @achim03
this is indeed very good question. one that noone could answer to me yet. at the moment is seem that STO is still kind of "theory" and we need to wait for Polymath or other platforms to launch their final products.
Yours
Piotr
Thanks for your comment @achim03
I think that's the point of those regulations. If you try to trick citizens and tokenize something that actually doesn't exist, organizations such as SEC will react instantly. But Piotr is also right, we have to wait until the final product of Polymath is released to see how are they going to meet the regulations.
Regards,
Jan