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12:26 21.07.2021
alexhayes2444@gmail.com
What’s the difference between crypto-asset trading and common stock trading?

Modern trading is taking new forms. As a trader, you can enter crypto-asset trading or stay with good old stock trading. But what is the difference?

Stock trading is a developed, older system where you can only execute operations in specific conditions. Usually, it is concerned with shares of companies. Crypto-assets trading, on the other hand, is something new, which is still taking shape. You can start trading at any time and do it 24 hours a day.

If you are interested in crypto-asset trading (how to make money with tokens), this article is for you. We will cover everything you should know about digital asset management and how to quickly enter the crypto-asset trading marketplace.

How do tokenized assets work?

Let’s explain how the whole system works first. Tokenized assets, or shares, are securities converted into a digital security token using blockchain technology. A security token is backed by a real asset and tied to its value. While such assets have no physical form and are fully digital, the securities these assets are tied to do have value in our physical world.

There are two types of digital assets – fungible and non-fungible.

Fungible assets are those that users can exchange one for another. For example, in fiat money every $1 bill is equal to another $1 bill because every $1 holds the same value.

Non-fungible assets have brought something new to the table. When the first digital art was sold using a non-fungible token (NFT) on the digital market back in 2017, it was a real digital revolution. While some have dismissed it as a bubble, it doesn’t undermine the fact that artists have earned thousands of dollars in such deals.

The essence of these tokens is the opposite to fungible assets. They are not interchangeable, and every piece has its own unique value. Their management is time-consuming compared with fungible assets. It requires more power, time, and storage to collect and identify each element.

Benefits of tokenisation of physical assets

Why does everyone seem obsessed with these assets? To answer this, it is important to understand what you get with a tokenised asset. Here are some of the main benefits:

    Retain all characteristics of any traditional asset

    You can use both fiat and cryptocurrency to purchase them

    Have no territorial barriers

    No need for third parties

    Operate well with both low and high liquidity assets

    Don’t require much time to purchase or sell

    A comparably low investment risk because a portfolio can be diverse.

Where can you buy tokenized assets?

The crypto-assets market is still young and requires further development. The adoption by art markets is just a small part of their potential. At some platforms you can not only buy or exchange cryptocurrencies but also purchase tokenized assets for global companies, as well as digital gold, oil and other natural resources.

How is the placement of such assets carried out?

To complete a deal and make sure that it is secured and protected, traders use specific protocols, including a security token offering (STO). It is used when the asset has a big value, usually in the case of investment projects. Think of it as a contract between two parties, but a digital one.

There are specific reasons why STO is becoming popular among traders and investors:

    Transaction commissions are smaller than usual

    Transactions are fast thanks to the absence of a long list of users and participants in the network

    There is a broad network of investors and potential investment projects

    Automated deals

    No interference from third parties. 

Who can get the most benefits from tokenized assets?

Digital assets have a high chance of becoming a new form of legal ownership in the near future. Some financial experts have predicted that cryptocurrencies will replace fiat money in the next five to seven years. 

Tokenized assets are a path to success for many. First of all, these are investors. Most of them should consider diversifying their investment portfolio. And what can diversify it more than investment in digital assets or projects? It is an innovative approach that has all chances to generate a profit.

Tokenized assets and the crypto market guarantee its users not only security but transparency of the operations. [1] 

Conclusion

To sum up, here are some key points for you to keep in mind:

    Tokenized assets are already becoming a part of our lives.

    Every such token is a line of computer code that has no physical form but has a physical value on the market.

    There are two types of tokens – interchangeable (fungible tokens) and non-changeable (non-fungible tokens).

    As a trader, you will find such assets as tokenized energy, real estate, art, natural resources and many other things to consider purchasing.

    Digital market is beneficial for investors and users who can’t or don’t want to create a brokerage account.

    In order to complete a deal, especially in investment projects, a security token offering is used.

 

Again, I'm unsure about this section. It seems to consist of comments and very little factual information. It may need rewriting or deleting.

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