Broadly speaking, there are two kinds of tokens in the blockchain space: utility tokens and security tokens.
Utility tokens – such as ICX – give you access to particular services.
Security tokens, on the other hand, needn’t be tied to a particular service. Instead, security tokens represent a particular asset. In short, they function much like shares in a company. With security tokens, you can tokenize real world assets – or parts of real world assets – such as real estate, art or precious metals such as gold, making them liquid.
But the big takeaway here is that security tokens are much more heavily regulated by national governments.
On the down side, national regulations usually dictate that you have to be an accredited investor to buy securities. To give you an idea of what this means, to be an accredited investor in the United States, you should have a net worth of at least US$ 1 million or an annual income of at least US$200,000 over the least two years and expect to make at least that this year.
On the up side, the added legal protections make it less likely that you’ll get scammed, Lehman Brothers notwithstanding.
To quote from The Tokenist, “For those coming from more traditional forms of finance and investing, security tokens offer the speed and ease of blockchain without sacrificing strong legal protection. For those with a background in blockchain investing, security tokens bring enhanced protection against fraud and misselling.”
The Block recently ran a very good, very simple rundown of the misconceptions and actual benefits of security tokens – read it at your own leisure.
Anyway, let’s return to ICON’s IRC16, the platform’s new security token standard. In short, this standard enables third parties to develop tokens representing their assets using ICON’s public blockchain network. The four features of the of the new standard – Check for Token Transfer, Token Control by Operator, Document Management, and Partition – ensure that these tokens comply with national laws and regulations to combat money laundering and protect investors.
In its announcement, ICON said it hopes security tokens will increase the liquidity of high-value assets and expand the size of existing investor pools over the long term. It also said the use of smart contracts would make the trading experience simpler.
Elsewhere in the ICON Republic:
- 5 Best Upcoming Cryptocurrencies to Watch in 2019 (Mar. 5)
U.Today includes ICON’s ICX and AION on its list of five cryptocurrencies to watch in 2019. They really seem to dig the interoperability. Also: ICON’s public and corporate partnerships.
- ICON Sponsors Deblock Japan (Mar. 7)
Deblock is opening a Japan office. Deblock Japan will also operate the Tokyo Launchpad of ICON’s accelerator, ICX Station.
- Kyber Network Crystal (KNC) Up 90 Percent this Week as Alt Season Continues (Mar. 9)
The Kyber Network — in addition to quite a few other altcoins — has been having a nice run as of late. Not as nice as it was a week ago, but a solid last month nonetheless.
- ICON to sponsor “Blockchain Innovations in Public Services” (Mar. 11)
ICON will be the only private entity attending this seminar, which will also feature presentations by the Korea Internet & Security Agency (KISA), the Korea Customs Service, the Korea Mint, Security Printing & ID Card Operating Corporation (KOMSCO) and the Korea Ministry of Agriculture, Food and Rural Affairs (MAFRA).
- ICONLOOP Participates in the ‘2019 World Smart Sustainable Cities Organization (WeGO) Business Information Session’ (Mar. 13)
At this international gathering in Seoul, ICONLOOP’s Josh Choi introduced loopchain use-cases and synergies between blockchain and smart cities.
- Wanchain Will Integrate With EOS In Q2 (Mar. 15)
Wanchain will soon integrate with one of the world’s biggest blockchain ecosystems, connecting it to other big ecosystems.
- ICONLOOP to Take Part in ‘AWS Partner Summit Seoul 2019’ (Mar. 18)
ICONLOOP CTO Edward Ryu will introduce key technologies of ICONLOOP, businesses using them, future plans, etc. during the “partner success stories” session after the keynote speech.