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How Security Tokens Can Be Created In Blockchain?

In recent days , the concept of Security Token Offerings sounds louder than Initial Coin Offerings . This is because of the advantages of security tokens over the utility tokens

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How Security Tokens Can Be Created In Blockchain?

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  1. How Security Tokens Can Be Created In Blockchain?

  2. Introduction In recent days , the concept of Security Token Offerings sounds louder than Initial Coin Offerings . This is because of the advantages of security tokens over the utility tokens.All the investors are aware of the importance of security tokens and also the risks involved in ICO process. This made Initial Coin Offerings move aside and providing a way to security token offerings to move forward on crypto world . In this blog let me tell you something about security token and security token blockchain's architecture .

  3. Security Token Security Token is one which says YES to Howey's test . In short , the tokens which allows investors to claim for profit / share after the launch of ICO are known as security tokens . Hence , the process is termed as a new form of ICO ,called Security Token Offerings (STO ) . If you want to know about Howey's test and as well as about security token in details , just refer at : Crypto Tokens and its Classifications

  4. Security Token Blockchain As security tokens function different from utility tokens , they require a different or a new blockchain . Blockchain of security token will be in different infrastructure from utility token blockchain . The building blocks that makes secuity token blockchain are listed in detail .

  5. Building Blocks The blockchain building blocks can be imagined into two tires for easy understanding . Tier 1 Infrastructure • Components • Protocols Tier 2 Infrastructure • Protocols

  6. Tier 1 -Blockchain Runtime The tier 1 blocks involves Components that abstracts main participants in security token offering process and Protocols that abstracts the interactions between those participants . • Components 1 . Assets : An assets represents the legal ownership claim , represented by set of documents of ownership of specific physical or virtual entity . 2 . Owners : Owner are individuals who have ownership on specific assets.

  7. Tier 1 -Blockchain Runtime 3 . Validator Nodes : The ownership of assets should be estabilshed by legally reputable financial institutions .These institutions should participate in the blockchain network as validator nodes . 4 . Experts Delegate Nodes : Expert Delegate nodes that represents different players in the architecture of financial systems, abstract functionalities such as legal assessments, broker-dealers, clearing-custody and other key participants in crypto-security transactions.

  8. Tier 1 -Blockchain Runtime • Protocols : 1 . Tokenization : The basic protocols responsible for the creation of on-chain representation of real assets . 2 . Identity : The participants and the assets should be identified both legally and technically .

  9. Tier 1 -Blockchain Runtime 3 . Ownership-Consensus: A protocols that maintain the validity of a transaction on financial correctness and on immutable transfer of ownership . 4 .Privacy : The ability to establish privacy protections on different information sets related to assets and owners comes under privacy . 5 .Oracles : Oracle is responsible for access of off-chain data that is relevant to crypto-securities .

  10. Tier - 2 Crypto securities Protocols : • Crypto - security Primities • Compliance • Disclosures As there are many different interesting blocks in security token blockchain , since the above listed are most important blocks in implementation of security token blockchain . To know more refer : How Security Tokens Can Be Created In Blockchain?

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