What is the difference between security token and utility token?

in #blockchain6 years ago

View the original post on Musing.io

The sole difference between these two are,

Utility tokens are not investment tokens, but basically a non-physical user tokens that grants future access to products or services that are offered by a company.

An instance is, a dealer could accept orders for a product that will be released several months later, meanwhile a startup can create utility tokens and sell digital coupons for the services or products it is developing.

A Security token on the other hand is a digital asset that derives its value from an external asset that can be traded because the tokens are connected to federal regulations and securities and due to these reason they are regarded or deemed as security tokens. They are also deemed as cryptographic tokens use to pay dividends, share profits, pay interest or invest in other tokens or assets to generate profits for the token holders.

CHEERS

Sort:  

Congratulations @victorevan! You have completed the following achievement on the Steem blockchain and have been rewarded with new badge(s) :

You made more than 50 upvotes. Your next target is to reach 100 upvotes.

Click here to view your Board of Honor
If you no longer want to receive notifications, reply to this comment with the word STOP

To support your work, I also upvoted your post!

Do not miss the last post from @steemitboard:

Meet the Steemians Contest - The results, the winners and the prizes
Meet the Steemians Contest - Special attendees revealed
Meet the Steemians Contest - Intermediate results

You can upvote this notification to help all Steemit users. Learn why here!