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There’s a good chance security tokens will change the way we look at the stock market in the very near future. Just like owning shares in a company by buying its stock, security token offerings create the ability to own fractionalized shares of any asset on the blockchain in a process known as tokenization. Besides the ability to trade 24/7, the best part of the concept of tokenizing assets is that in that process, you unlock liquidity – and investors love that!

Big time investor houses are starting to notice security tokens. Purchasing these offerings provides investors with the same perks derived from traditional stock market shares in the form of cash dividends, voting rights, etc. The immutable nature of the blockchain (which acts as a ledger) makes these transactions safe, secure, and fully verifiable.

Anytime you turn a real-world asset into digital tokens, you are performing the tokenization process. Smart contracts within the tokens allow for unlimited possibilities, all without any human interaction. When an investor participates in a Security Token Offering (STO), security tokens are issued to that investor where that deal is backed by a verifiable and valuable asset. This is what sets an STO apart from the initial coin offerings (ICO) of yesteryear where many turned out to be scams. Even still, ICOs raked up about $6.6 billion in 2017 and $21.5 billion in 2018. With that aspect of security, the future for STOs is absolutely astonishing since Security Token Offerings emphasize regulatory compliance and by their very nature are inherently valuable, again since they are based on underlying assets.

There are so many unlimited possibilities. You can tokenize debt. You can pay dividends instantly. You can trade them on secondary markets. And you can do it all without the need for brokers or intermediaries making the entire process speedier, safer, and less costly. However, this concept isn’t an either-or scenario. It’s not like security token offerings have to replace stock market deals completely. They just provide investors with another avenue to trade “shares” over secure platforms on a timely basis.

As Security Token Offerings become more prolific (and they will), the way investors view the stock market will definitely be transformed. With the 24/7 trading ability of a blockchain platform, and by providing liquidity to previously illiquid investments, as well as offering fractionalized ownership in real-world valuable assets, opportunities of security tokens will make them an investor’s (and issuer’s) dream! The continued development of blockchain in the investment space is inevitable.

Better get on board! Request a tokenization platform demo and learn how to tokenize investments as a form of crowdfunding for your business.