Security tokens are the next big thing?

Before we start, let’s have a brief understanding about utility and security tokens.

To ease the process, just remember the things below:

Utility Token: Token holders can use a service, purchase a product, trade value or vote for the good of the ecosystem.

Security Token: Token holders own company assets equivalent to the percentage of holding tokens. Holders could act the same way share holders of the traditional finance do (including voting in operational issues).

We’ve seen the fall of many ICOs from the recent months. I believe the most crucial reason is that it was too easy to raise funds.

Coinscheldule (https://www.coinschedule.com/stats.html) provides very good statistics on ICOs. An insane amount of funds were raised through various ICOs and it was not even hard to find projects with similar concepts.

Coinone, a South Korean exchange published a research report with the statistics of ICOs stating that 47% of them raised funds just with an idea. (http://research.coinone.co.kr.s3.amazonaws.com/report/20180912_Time_for_reality_check_EN.pdf)

I have no doubt that good ICO projects will bloom sooner or later but not all of them would survive nor will raise funds the way it happened in the recent past.

According to this background, I believe the next whale would come to either reverse ICOs or security tokens. However, the reverse ICOs that I’ve seen on progress recently were not necessarily token or blockchain required projects. My opinion on that could change if an innovative idea would come in front of me. Before it happens, I would say “let’s go security!”.

Security tokens have the following attractions:

1. Holders are investing in a more trustful company than ICOs.
2. There are no brokerage and middleman fees as there are in the traditional finance.
3. Expansion of investment opportunities: Not everyone can invest on a private US company. Security tokens will allow it.

There are still regulation issues and existing risks. It seems to be that Polymath (https://polymath.network/) a security token platform is doing their job very well. Also, one of the biggest South Korean Influencer, Heslin Kim is participating in this project and I believe we will face some fun actions here.