Security Token

What is Security Token?

In essence, a security token is a digital version of traditional securities. Equities, debt, and a combination of debt and equity are the three main categories of traditional securities.

Security tokens, however, are distinct from cryptocurrencies, it is vital to remember this. On their blockchains, cryptocurrencies like Bitcoin, Litecoin, and Bitcoin Cash function. A security token might function on the Ethereum blockchain because security tokens run on an established blockchain. The blockchain that security tokens are deployed on most frequently is Ethereum. ERC-20 tokens, which are Ethereum-compatible tokens that may be used with smart contracts to run on the Ethereum blockchain, are widely used by businesses.

Owners of security tokens can make money off the token's performance. They occasionally receive dividends in the form of additional tokens, and they frequently receive other advantages like voting rights.