Understanding How New Wallet Backed Tokens Work

Published On October 28, 2017 | By Edward Panos | finance

 Cryptocurrency is probably one of the most talked about topics today. What exactly is a cryptocurrency? It is a digital currency that makes use of a peer to peer system called blockchain. There are different forms of cryptocurrencies such as the bitcoin and tokens. Bitcoins have popularized the cryptocurrency technology. Next to bitcoins are crypto tokens. They represent a specific value. They are new wallet backed tokens.

They embody a tradable good and can be used to represent a share in the company. They have a multitude of uses. They can be used as a central committee voting rights, used to raise funds in a crowd sale, and anything that gives further value. Wallet backed tokens do not always represent monetary value. It pertains to anything that can increase the token’s assets and equity.

Coins and tokens are used interchangeably

Coins and tokens are the two most commonly used terms in the cryptocurrency world. Are the two the same? Are there any differences? A coin has its own blockchain whereas a token is hosted by another currency’s blockchain. If you are new in the cryptocurrency technology, you will surely be confused with the different terms. As you go along, you will be able to understand what wallet backed token is all about and the entire cryptocurrency world.

Exchanging crypto tokens

The developer of the token gets to decide whether they want to publish the token on cryptocurrency exchange or not. By doing so, token users will be able to purchase and sell the token the initial coin offering has finished. Check beforehand if further crypto tokens are going to be minable so that you will have an idea if the inflation rate might be too high for the value of the tokens. You also need to know beforehand the freezing ability of the digital currency.

Freezing protects the currency just in case something happens such as in the case of hacking or government regulation. During the freezing period, no cryptocurrency tokens are going to be removed. Your assets are protected from uncertainty. This made cryptocurrency a more appealing option than the traditional currency.

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