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Top 10 Benefits Of Tokenizing/Digitizing Securities

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Tokenization

This is a guest post submitted on CryptoTapas.

Big changes to the traditional methods of storing financial assets and holdings are on their way, and they may not be as far off as some people think. Security tokens are going to be taking over banking and the rest of the financial worlds. All parties involved in the financial world will notice multiple benefits from this tokenizing of securities.

Tokenizing securities is essentially taking a number of traditional financial products and moving them from traditional recording methods to the blockchain recording method. Let’s explore the top 10 benefits of this move to digitizing securities.

1. Potential For Around The Clock Markets

MarketRight now, almost all traditional financial products are only available during normal banking hours. Whether it is a stock market or even some parts of your banking needs. When everything becomes tokenized this brings the potential for the financial products to be accessible around the clock.

Cryptocurrencies are a good example of this. You can trade currencies such as Bitcoin at any time of the day because the whole process is digitalized.

2. Stricter Compliance

crypto regulationsCurrently, compliance agencies around the world are focused on responding to governance issues and regulation issues after something has happened. This puts a lot of stress on the agencies and makes trials take a long time to be completed.

By tokenizing securities, there is much stricter regulation. Each token can be programmed with the laws that apply to that specific token. For example, if an owner cannot trade/sell a token for 12 months after assuming ownership, that can be programmed into the token. You can also program into the token who is allowed to take ownership of that token should it come time to sell.

With more of the compliance taken care of on the digital side, this will allow the various regulatory bodies to save money on manpower and resources.

3. Fractional Ownership Of Securities

With traditional trading, a party needs to buy a full asset. There are ways around this but they are time-consuming and not as reliable. With tokenized securities, you can make fractional ownership of an investment much easier. You can write directly into the token the ownership of the security.

Because the securities are digitalized, fractional purchases and sales are not only easier, but they are quicker. The whole process is done digitally and you don’t need to go through long, complicated processes for each transaction.

4. Introducing New Investors

new crypto InvestorsOne of the biggest reasons that investors from around the world stay away from international markets is that they can’t be traded during their hours. With the above potential for around the clock trading, more people will be able to access the markets from around the world.

New investors will also be able to be introduced through the above-mentioned fractionalization of securities. One person no longer needs to come up with the complete capital for an investment. That means groups can invest.

5. Transparency For Buyers

SecurityWe all want to be able to verify data on our financial transactions. With tokens, you can track the history of purchases and see where it is coming from. You can verify that the token is still valid and see all the other information on the token that you purchase. Better transparency means that you won’t have to worry as much about fraud and corruption when you are trading in securities.

6. More Efficient Processes

blockchain usefulDigitalizing the securities world allows for much greater efficiency. These systems will be moving to a blockchain model partnered with smart contracts. This removes a lot of the slow down in the modern market.

Banks have to have large back offices in order to facilitate transfers of ownership. This costs them a lot of money and adds time to your work. The work that is there is much easier as you don’t have to worry about complicated auditing and accounting as transaction history is much easier to view.

Lawyers and other middlemen are also not needed as almost everything can be handled digitally. At first, people might still turn to traditional middlemen and lawyers as they learn to navigate the world of digitalized securities, but this will go away quickly.

7. Better Liquidity

Because fractionalization and around the clock access to your securities is made possible by tokenizing securities, they become much more liquid. You don’t have to wait until banking hours to access your securities and then wait days while all of the paperwork is done. You can sell your ownership quickly and easily.

This includes more liquid fractionalized ownership. You can sell of your piece of a security or part of your security and make money. Partial ownership means that more people have access to investment opportunities and as such you can get cash much quicker. You don’t have to worry about trying to find an investor.

8. Security Interoperability

Securities are currently stored on a number of different style systems in each country. In order to send values from one platform to another, it takes days or more for conversion. Often this is due to a number of steps being needed. For example, if you wanted to send money from Paypal to Venmo you would need to send your Paypal money to your financial institution and then from there to Venmo. Each transaction takes an average of a day in this example.

Once tokenized, securities will operate on many similar blockchains and a good number of them will be designed to be interoperable. You will be able to trade assets between different blockchains as long as they are compatible with each other.

9. Easier Cap Table Management

For a business, having list of who owns which securities can be a great asset. Currently, that takes a lot of work as you need to track a number of different types of securities using different platforms. With blockchain management of securities, you will be better able to manage your cap tables. All of the trades and other information is accessible through the tokens so that they can be easily tracked.

10. A Real Value

Each token represents an actual partial ownership in a company or asset. That means that these tokens have a real value assigned to them. The worth isn’t some reliance on a third party stating that you own a stock. Having access to your ownership of a company or asset is why a lot of people feel safer with cash than traditional investments or are interested in Bitcoin over other investment options.

In simple, you have access to your token, and you don’t have to go to anyone else to sell it. There won’t be anyone else holding your asset.

Conclusion

TokenizingTokenizing securities will bring a lot of changes to the market, but almost all of them will be positive. Along with changes comes a lot of uncertainty and fear. This has led to a lot of discussions as to whether or not tokenizing is the right step for the financial system.

At this point, there are a lot of people working on making tokenizing happen. Even with all of that work having been put into digitalization, there will still be a decent amount of time before tokenizing happens to the market.

The benefits mentioned above are only the top 10 that the market will see. As digitalization happens, there will be many benefits brought to investors and businesses around the world. To banks and financial institutions too. The benefits will vary amongst each party, but we are sure to see significant improvements over the current market, especially after the conversion to blockchain has a chance to set in and people get used to it.

Thank you for reading the article.

Want to guest post?

You can submit guest posts to Cryptotapas to get your articles published here. Click here to Guest Post. 

Subscriber-Banner-smallIMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

This is a guest post. We do not endorse or guarantee the accuracy of the information and claims made.

 

CryptoSpace

All Roads Lead to $100K Bitcoin: Various Perspectives that Support $100K BTC

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Bitcoin to 100K

Bitcoin to 100K

There are a lot of theories in the crypto space that argue that Bitcoin will reach $100,000 before the next halving.  Some even argue that we could reach that price point before the end of 2021.

Here we have compiled a few perspectives that support a higher price point for Bitcoin.

IF we missed any, please let us know and we will be glad to add it for others to read.

Bitcoin’s ability to reward savers

If you saved $100,000 throughout 2017, today its value would have been $94,000, a total loss of 6% due to inflation. That is without considering the fees and hidden charges that institutes charge.

Even if you invested in the S&P 500 for 12 months at $8333 each month throughout 2017, your portfolio value today would have been $110,000.

If you saved $100,000 in Bitcoin throughout the 2017 (prices ranged from $920 through $14,000 during Jan 2017 through December 2017).  For the purposes of this comparison we are using the last week prices from each month as available on Coinmarketcap historical snapshots.

$100,000 invested in equal amounts throughout 2017 would look something like this.

Bitcoin to 100K

Since 2017, Bitcoin price has crashed and rebounded.  At the lowest point of the crash of $3000 per bitcoin, your portfolio value would have been $144,000.

In today’s average price of $16000 per bitcoin, your $100,000 savings would have been worth $770,000.

Due to its increasing demand and reducing supply, Bitcoin is expected to reach $100,000 in the next 4 years. Some models show that bitcoin will be worth $1 Million by 2030.

Only time will tell us whether bitcoin reaches these prices or not, but point being, no other asset of any class has crazy growth predictions like Bitcoin has.

Stock-to-flow ratio

According to Plan B, Gold had the highest stock-to-flow (SF) ratio of 62.  That is, it will take 62 years to produce the gold that is currently in the market.  In other words, you cannot willy-nilly inflate the supply in a year or two due to how scarce gold is and how difficult it is to find and mine it.

Current SF for Bitcoin is 25, however, by the end of 2020 or 2021, this could jump to 50.  By the next halving in 2024, Bitcoin could surpass the SF of gold.

According to Plan B, “The predicted market value for bitcoin after May 2020 halving is $1trn, which translates in a bitcoin price of $55,000. That is quite spectacular. I guess time will tell and we will probably know one or two years after the halving, in 2020 or 2021. A great out of sample test of this hypothesis and model.”

However, following the trajectory of Plan B’s SF analysis, Bitcoin could easily reach $1 Million dollars by 2030, according to some commenters.

Stimulus and unlimited printing of fiat

COVID has exposed another flaw in the fiat system.  It is that governments can print as much money as they wish whenever they wish to do so.

Whenever governments resort to simply print money without having a basis in asset value or growth in GDP, it erodes the value of the fiat in circulation.

This is what happened to Argentina, Venezuela, Zimbabwe and more.  

The US dollar has lost over 99.97% value since 1900.  For instance, whatever you could buy with $1 in 1900 will need $31 today.

COVID has added salt to the wound for fiat.  It exposed the blatant fact that governments can and will print money to their whim without regard to the inflation and impact on savers.

This increased supply in fiat helps stock market and market liquidity which in itself helps people who are invested in the stock market and other vehicles which is generally the wealthier part of the society.

Other factors strengthening the crazy Bitcoin price predictions

  • Institutional FOMO, for instance, Square, PayPal, Grayscale, etc., entering the market
  • Easier onboarding of new retail investors
  • Greater technologies and DApps being built on Bitcoin 
  • Great DeFi services to lend and borrow money
  • Globally accepted single denomination that does not need to be converted in the future (with enough places accepting bitcoin)

What other factors do you think will contribute to Bitcoin’s shooting past the $100,000 barrier?

Let the FOMO begin…

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

 

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Crypto Roundup: All Your YouTube Influencers in One Place

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Crypto Roundup

Visit our Crypto Roundup section daily for a dose of all your favorite Crypto YouTube influencers in one place.    

Worried about missing updates from your favorite YouTube crypto influencers?  

Welcome to the Crypto Roundup.  

On this page, we will post a quick summary of the videos from some of the most popular YouTube crypto influencers.

Ivan on Tech  Altcoin Daily

Crypto Zombie Box Mining

Ellio Trades Lark Davis

Data Dash Bitboy Crypto

MMCrypto Chico Crypto

Altcoin Daily

Video title: Bitcoin Will Be OVER $20,000 By Christmas 2020! BIGGEST WEALTH SHIFT OF OUR LIFETIME! Cryptocurrency

Date: 19-Nov-20

  • World’s biggest wealth shift of our lifetime is happening right now and no mainstream media is talking about it, except CNBC.

  • Preston Pysh predicted on August 26th that: “Bitcoin should be reaching its all time high by Christmas.”

  • If you are looking to buy a dip, there may not be one.
  • Ricardo Salinas Pliego, a mexican billionaire, has just revealed that 10% of his liquid assets are into bitcoin.

Lark Davis

Video Title: STOCKS HIT NEW HIGHS! WILL COVID VACCINES LEAD TO MEGA PUMP IN 2021? [Are You Ready?]

Date: 19-Nov-2020

  • Stock markets and bitcoin pumps higher on the news of the second successful covid vaccine.
  • There could be more chances for the new stimulus. Means more inflation, more debt and simultaneously pumps stocks, gold and bitcoin.

Crypto Zombie

Video Title: BITCOIN $18.5k TOP!!?! DON’T BE FOOLED!! HODL FOMO BEGINS!!! $TRILLIONS FLOOD!!

Date: 18-Nov-2020

  • Overall sentiment of Bitcoin has changed drastically from ICO craze in 2017 to a time where people are FOMOing to own more bitcoin.

Ivan on tech 

Video Title: BIG WARNING TO ALL HODLERS!!!!!!!!! DO NOT GET REKT!!! BITCOIN $18,500 REJECTED – NOW WHAT?

Date: 18-Nov-2020

  • Ivan expects bitcoin to shoot past $20K resistance before end of this year, giving it 85% probability

Chico Crypto

Video Title: World’s Most Powerful Turn BULLISH on BITCOIN

Date: 19-Nov-2020

  • All those who hold big bags of Bitcoin will come out of the shadows to talk up the Bitcoin rally, a $20K bitcoin could be on the cards before the end of this year
  • Ethereum mining could act as a big catalyst for Ethereum’s price
  • Big companies like google could play a bigger role in mass adoption of crypto

Let the FOMO begin…

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

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Lessons from the Veteran HODLERS to the Newbies!

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Lessons in Crypto

For all those who entered the crypto market after the 2017 bull run – here are few lessons from the HODLERS from the last bull run(s).

This is our attempt at making all you newbies aware of the mistakes veteran cryptoers did.

Let’s get started…

Don’t FOMO in to all the hype

FomoIt’s hard not to FOMO in crypto.  The trick is to make sure you don’t lose your shirt in crazy bets.  Always limit your bets to what you are comfortable losing.

The common ways you can become victim of FOMO are:

  • Following your favorite YouTuber without actually doing your own research on the project.
  • Investing into projects at the top.
  • Believing in promises of 100x or 1000x without any substance behind those claims.

HODLing far too long

Remember why you are into crypto – to make the money.

Never fall in love with your crypto, and HODL the tokens even when they are 10x and more.

Have a strategy to take your capital out before you become a HODLer.  

If you believe the project really has what it takes to go beyond 100x and more, just sell in instalments so as to not miss the ride.

One of the best ways to HODL is to take your capital in full and profit in tranches.

This rekt story will give you a right perspective of what it looks like, it’s one of many:

Don’t put all your eggs in one basket

Never go all in on one project. No matter how strong the project may look, even the projects with strong fundamentals don’t do well sometimes. 

And, you will be kicking yourself watching other projects go up and your portfolio just doesn’t seem to make a move.

And don’t over do it and have a portfolio with over 100 projects either. It is very difficult not to have invested in more than 15 projects but anything less than 20 is a good way to go, in our opinion. 

Put aside the share of Profits for Taxes.

One way you can get a good night’s sleep is by paying taxes. 

Always keep a habit of putting aside a % of your profits in USDT or other stable coins, as a reserve to take advantage of market volatility and also to meet your tax obligations. 

Exchanges are more evil during bull run

Foreign ExchangesDon’t trust exchanges. Yes we already know that, but they play more games during bullrun, some intentional and some technical. 

Many exchanges tend to go under maintenance when the prices shoot up too high too soon (Coinbase?), and you can’t sell. 

And the shady exchanges scam out before you know.

Regulators seem interested when the market cap of these projects goes through the roof, which then adds FUD around the project crashing the prices.  

Exchange may freeze funds pending investigations when such issues arise.

Take for example OKEx. Users are unable to withdraw their assets from the exchange for almost a month now, not certain if they ever will, and all that started with the legal dispute.

Never fall for Arbitrage gains

Arbitrage is when you buy in one exchange at a lower rate and sell on the other for a higher rate to take some profits. 

Some shady exchanges show a lot higher prices than the other genuine exchanges and when you deposit your assets to sell at those prices there won’t be actual volume to execute the trade. You may be stuck with either a high fee for withdrawal or other funky rules to take your own money out. 

Remember, there is no free Giveaway

Free CryptoScammers rise with the rising market.  

When the crypto market buzzes with all time highs – scammers cash in big time on newbies.

The most lucrative scam in crypto is ‘Free Giveaway’. Whether it be through YouYube ads or discussion groups and wherever they can get your attention.  Read this article on various sophisticated scams that are being deployed.

We hope these lessons help you through your trades and crypto life.  Stay safe and always DYOR.

Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

Top 5 Cryptocurrencies 2020

IMPORTANT DISCLAIMER

Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

 

Continue Reading

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