Token: what is it?
What is a token
Token is a digital certificate that guarantees the company’s obligations to its owner, analogous to shares on the stock exchange in the world of cryptocurrency. To put it simply, tokens are like amusement park coupons. Coins with the park emblem bought in the register can be used for carousel rides, shooting or ice cream. Visitors to the park buy tokens for real money, but these coupons work only on the grounds of the park. Blockchain projects produce their own unique coupons – tokens. The token purchaser can, for example, increase the volume of its storage in the database. Or, if the company’s tokens are essentially its digital shares, leave for better times in the hope that they will rise in value. One person gave an example: imagine we’re building a new subway. We issue tokens in advance for this subway, tokens, and say: “you will pay now, we will build a subway, and you will be able to use them to drive it”.
It is also important to note that not every individual entrepreneur or legal entity is entitled to issue tokens. But anyone can buy digital assets.
It is convenient to sell or buy tokens, bitcoins, ethereum or other cryptocurrency on the Tokenexus platform.
Tokens from the bank work on mathematical functions, and either a counter or sequential hashing is used to calculate each key. Roughly speaking, some one-way function and some starting number are sewn into the token. The server also knows what function and how many numbers are used in the voucher attached to your account. If this is a counter model, then your function calculates a function from an insurance number, and then this start number is increased by one or changed as much as you like, just so that by a known algorithm. If this is a sequential key calculation, then each subsequent key is the result of the function running on the previous key. Accordingly, every time you click a button, the token calculates the next key. When you enter it for authorization, the server also computes the same key and compares it.
The token contains a crypto-representation, which you submit a document at the entrance, you are authorized by a one-time password for signing with a private key that is stored in a token, it is not possible to receive it by means of token, and at the exit you get the EPP document, which, together with the document, goes to the bank and is verified there.
What does token do?
Data protection is one of the most important tasks in modern society. Protection is a set of measures to ensure the security of company secret, personal and commercial data.
Tokens can be implemented to protect the company’s data instead of the usual passwords to access the user’s computer.
It is especially important to use additional authorization for users whose computers can store locally restricted information or for access to computers that can be accessed by outsiders who do not work at your company. So just to avoid computer access problems and not to force users to change passwords every 40 days, you can use tokens. All you need to do is enter the password from the screen or insert the key into the USB connector. This will simplify authorization for users and provide additional security information in the company.
Variety of token forms
These coupons are represented in different variations:
- Application tokens or coupon tokens.
- Service tokens, this category of coupons gives access to the goods and services that will be released by the project in the future. In addition, these tokens can be used to obtain a discount or premium access to the project’s goods and services. If the service token does not improve the performance of the product and is relevant only for investment purposes, then it can be considered as an investment token. Service tokens are used in more than 95 per cent of projects and are sometimes assigned to completely ridiculous functions as a result of legal restrictions.
- Cryptocurrency or Payment Tokens. Normally tokens in this category do not have additional functions and are not related to other projects. Generally speaking, cryptocurrency should become an integral currency instrument, similar to money or gold, allowing purchases, sales and other financial transactions. Cryptocurrencies are intended to perform the same functions as long-established currencies, such as the American dollar, the euro, or the Japanese yen, but they have no support from the government or other governing bodies.
- Investment tokens or Token assets. This category of tokens entitles them to basic assets, dividends and interest payments. The economic function is similar to equities, bonds or derivatives.
The selection must be taking into account all features pf the tokens.
Digital art and tokens
Investing in digital art is one of the hot and debated trends in intellectual property. Not only were the artists or popular singers making money in the virtual world, but also those who were not known at all yesterday. Successful sales and setting of price records both picture, photo, collages, gif-animation, music. Not least because of the active use of tokens – digital certificates of title. For collectors, both yesterday and today, the fact of owning an object of art is important, and in this sense the digital asset is better off offline: there is no need to maintain special climatic conditions, pay protection, carry out restoration, etc. Online-Collecting is about owning something in a pure form. It is relatively easy to become an investor in digital art. For example, by registering on a platform where you can buy tokens with a credit card.
The important thing is to figure out which project to invest in. In order to evaluate the project, it is important to analyze the biographies of developers, partners and working solutions where the technology is used. If we’re talking about market place, we need to see which artists and celebrities they plan to attract. Such projects, with solid and well-known participants, tend to grow well immediately after the start. I must emphasize that all these are not investment councils, as is customary to add after detailed statements. But the important thing to consider is that tokens are not considered to be an investment. And more as a replacement for securities with simple words. Such a unit of accounting for certain assets of certain companies. The prices of tokens are very different, depending on the company that produces them. Companies issue them in order to attract investors and financiers. Besides, any user can buy them.
It is important to understand that service tokens are not an investment instrument. Despite this, many investors are buying service tokens in the hope that their price will rise due to the growing demand for the goods and services provided by the project. However, the increase in the price of the token data is often speculative, making it unprofitable to invest in them. Before buying a token, you have to perform an analysis of the token type and its economy before making investment decisions. It is always important to remember that token price is based on the basic principles of the economy, such as the law of demand and fair value. It is also desirable to always understand the base and present value of the trading token, as well as its potential value if all targets are met.