Steemit Crypto Academy Contest Season 6 Week 6 - Security Token Offerings STO

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Greetings to everybody in this community and in this platform at large. I believe that we all are in good health and if so, praise be to the almighty. I welcome you all to the end of this season's engagement contest in this community which was initiated by the steemit team in other to improve engagement among users in this platform.

It has been a wonderful journey so far and today I will also be participating in the last contest of this week in this community which has been titled Security token offering.

I will be dropping my entry regarding this contest today and as such I urge you all to relax and stay put as I drop my article below.

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In your own words, define the STO by explaining its process?

The word STO which in full represent Security Token Offering is in no doubt seen as the integration of the digital token alongside the block chain technology that represents investment in an asset.

In other words the Security Token Offering allows the process of digital funding but this is done in accordance with the terms and conditions of the government.

So just like I said earlier, the Security Token Offering is integrated with the technology of the block chain and this is done to achieve more securities markets that assist in the process of providing more funds available through the medium of assets liquidity for the purpose of making funds available to all.

The Security Token Offering is also regarded as the scenario by which digital tokens are given out in a block chain arena in a particular medium called regulated Security.

It is seen as a unique type of security that enables legitimate ownership of certain assets in the real world such as houses, estates and other properties as the case may be but note that these tokens are not traded in certain exchanges platforms.

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How does it work?

The Security Token Offering works absolutely based on the block chain and as such, allows cryptocurrency to secure an investment of ownership regarding certain asset.

The Security Token offering is a more secured way of raising funds as though it still maintains the rules and regulations of the government. So it operates on a well secured medium that enables the block chain Security processes.

So it works in a process of smart contract distribution medium which provides firm security and also protect your real-world assets as though it uses the block chain technology system of security that register users through validation and confirmation of ownership which all information is then saved on a distributed ledger.

So with this, the Security Token Offering is considered more secured when compared to the cryptocurrency as though it works with real-world assets that is backed with the block chain technology system to provide more protection to assets.

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What does STO bring to the world of cryptocurrencies and also to the traditional financial world?

Main looking at the scenario, I would say that the Security Token Offering brings both t
Transparency and Security in both the cryptocurrency world and also to the financial world.

Yes, Transparency is seen in the security token offering especially in the cryptocurrency world. We have seen a lot of cryptocurrency assets projects that came up and promised investors certain things they couldn't keep.

They make empty promises but then having bad intentions to scam investors. Transparency is not seen in the picture as though many of them do not reveal their true identity just because cryptocurrency was developed based on a system that does not reveals users information.

But with the Security Token Offering you get to notice a high level of transparency in there. A system that indulge in fund raising alongside adheres to the rules and regulations of the government is indeed a transparent system.

So with the Security Token Offeringsystem of operation, transparency will be seen in cryptocurrency world and this will certainly flush out bad individuals with a mindset of scamming investors of their hard earned money.

The Security Token Offering also offers solid protection to users real-world assets through a system of ownership validation that is recorded on the distributed ledger. With this, the traditional financial market will have confidence that the Security Token Offering can sure safeguard their real-world assets through the block chain technology system.

So this will be an eye-opener to many individuals about the cryptocurrency system that operates on the block chain technology, and as such many users will then appreciate the use of cryptocurrency as though it provides solid protection to funds and assets through various means of technology.

So what the traditional financial world wants to see is a system that can safeguard their asset and also that system should be transparent. And all of these features are seen in the Security Token Offering.

So it is a win-win scenario regarding the cryptocurrency world alongside the traditional financial world when the Security Token Offering is been embraced with two hands.

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What are the differences between STO and ICO, IPO and IEO?

I will be providing the answers to this questions in batches. First of all I will begin with the first two which are the STO AND ICO.

We all are now familiar with the STO which means the Security Token Offering and also the ICO which also means the Initial Coin offering.

Remember they are both a medium by which funds are raised by investors but now we are to state out certain differences between them but for me, the solid differences between the both offerings is that Security Token Offering offers a better security and transparency system as though is operates based on the rules and regulations of the government but Initial Coin offering has no governmental backings and as such it is considered insured.

In no doubt there are certain differences between the STO and ICO. The below are some differences between them.

STO	ICO
1 - The Security Token Offering performs certain transactions such as utilities and Investments	1 - Initial Coin offering only renders investments operations.
2 - Security token offering is strictly concern with real-world assets and investments.	2 - Initial Coin Offering has nothing to do with real-world assets or legitimate investments.
3 - The Security Token Offering is well organized and operates on a well regulated security.	3 - Initial Coin offering doesn't not have a well regulated security and as such it is not safe.
4 - The Security Token Offering operations are based on the terms and conditions of the government and so it is well protected.	4 - Initial Coin offering doesn't not operates on any authority terms and as such it is not protected.

Now talking about the difference between IPO AND IEO is seen in the below table of comparison but before I do that, It is expedient to be familiar with these acronyms. So I will give a briefing about them.

The IPO is considered to be Initial Public offering and this is done by certain industries, companies and other big sectors. The purpose of the Initial Public offering is to get funds through the medium of distribution of certain percentage of an investment shares to certain individuals through a written documented agreements between the both parties afterwards they will then be considered as shareholders before a live kickoff such investment.

In the case of IEO which is regarded as Initial Exchange Offering. This is an Exchange offering that is done in the digital currency environment be it a decentralized exchange platforms or a centralized exchange platforms.

Whereby individuals give out some of their digital currency for staking regarding a particular project that is yet to be launched in other to be a part of the investors that will get a particular cut or shares of the investment when it go live.

Now below are some differences between IPO AND IEO.

IPO	IEO
1 - Initial Public offering is an offering that is related solely to real-world assets.	1 - Initial Coin offering solely deals with the offering of digital currency upon release of the project.
2 - Initial Public offering investors are called shareholders upon getting of certain properties of the investment.	2 - Initial Exchange Offering investors only get certain amounts of a digital currency upon staking their digital token and as such they are regarding as the early investors.
3 - Initial Public offering offers assets that only appreciates in price value year after year and the case may be and these assets are not volatile in nature.	3 - Initial Exchange offering offers digital currency that can either appreciate or depreciate with time as though the digital currency is highly volatile in nature.
4 - Initial Public offering is governed with solid security benefits as though it's based on the government approval	4 - Initial Exchange Offering has a very poor security and as such anything can happen to a user token upon staking since it doesn't have a solid government approval.

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List and explain some types of security tokens?

There are certain types of security tokens which I will be listing alongside explaining them below.

ASSET-BACKED TOKENS

The Asset-backed tokens are strong backed by important and visual assets such as artworks exhibition, real-world assets, real estate and lot more. It uses the block chain technology system which provides adequate security to these properties and as such all information are recorded on the block chain system.

So with the Asset-backed token the real estate information is stored on the block chain technology as though is operates just like the digital asset on the block chain since it has enabled the block chain system.

As such, the price values and necessary information of the assets are now stored in the block chain. So when a given real asset price value such as an estate goes up or down, it shows the information just like that of cryptocurrency token.

So with this token, accountability, security and transparency are seen in the block chain without any forms of panicking because the block chain technology provides strong security to real-world assets.

EQUITY TOKENS

This system of equity tokens offers equal benefits such as voting right and earnings in the company. Although Security Token Offering and Initial Public offering offers such benefits to their investors as though they are considered shareholders since they also have a part of the company's property.

The equity tokens are kept on the block chain although certificate of agreement will be sign traditional on an agreement document to be kept for evidence regarding the shares of the shareholders. So with this, decision are made alongside the shareholders since they also have right in making of certain decisions through their investments in the company.

DEBT TOKEN

The Debt Token is regarded in a loan form by which the said company receives from their investors which is strictly on a less time condition. It is seen as an agreement between the company accepting loan from their investor based on a short-term agreement.

And this is also recorded on the block chain as a proof of the loan received by the company and as such, the price of the token will be tampered with depending on the mode of refund and risk regarding the loan received from the investor in question.

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Do you think these types of tokens are secure and reliable?

I vividly agreed. Yes is is strongly reliable when these types of tokens are rendered in any cooperatives or organization. The sole purpose of winning the heart of investors is to have a strong security just like that of the Security Token Offering.

With the above information regarding these three tokens, investors are rest assured that their money and assets are safe and properly secured because the Security Token Offering has the backings of the government and with that approval, it make sure everything that happens in regarding funding and transaction is done based on the terms and conditions of the government.

With a wonderful feature of the Security Token Offering regarding storing of information of certain real-world assets such as estates, houses, artworks and so on on the block chain technology system is indeed a proof of transparency and solid security display.

So indeed, I vividly considered these tokens secure and reliable because every transaction is recorded on a distributed ledger and as such, those information can not be jeopardize.

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if you want to participate how does it work?

Supposing I want to participate in it, there are certain procedures to follow-up in other to attain it and these procedures are as follows.

SELF REVEAL AND KNOW YOUR CUSTOMER(KYC)

This is a wonderful approach which the token offers before going viral. It is important to share information to the people regarding the operation before launching it because this will help to eradicate doubt and fear in the mind of the public.

People will always want to know the brains behind such activity before they can have faith in it and so it is necessary to create awareness of oneself before the kickoff of the project.

INTENTIONS AND TRANSPARENCY

People wants to know the reason for the project such as what's in for you and other questions. So pouring out the intentions and reasons for coming up with such a project is necessary to the investors.

Everyone is skeptical this days about certain projects that comes out of the blue without a tangible reason and no intentions revealed. So it is important to be transparent enough by revealing your intentions to the investors before the kickoff of the project, for this attitude will prove the legitimacy of such project.

I strongly believe that with the above procedures listed, many people will be drawn to the project as though it has both Transparency, Intentions, Self reveal and Know your customer rule.

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CONCLUSION

With Security Token Offering both the cryptocurrency world and the traditional financial world will sure benefit from it as though it helps more users to see the need to accept cryptocurrency through the security it offers based on the block chain.

And also scams and fraud will be limited to a fault in the cryptocurrency world through the Security Token Offering system of operation. With it function, we get to see legitimate ownership of certain projects and not just some sort of wicked individuals that are after investors funds.

Thank you all for taking your time to read from me today. I want to use this medium to invite some users to also participate in this contest and they are @badmus-official, @jueco, and @skilocy.