What are the Advantages of Security Tokens? A huge advantage that security tokens provide is that they bring accountability and compliance to the blockchain world, which has been a proverbial Wild West thus far. Scams and shady businesses have been able to run amok with little control by regulators. This all changes with the use of security tokens, however, as enterprises utilizing these tokens legally must comply with governmental regulations. This regulatory framework that governs security tokens results in increased credibility and trust.
Moreover, security tokens allow for the democratization of investment access. Large assets such as real estate have traditionally been an exclusive market to investors with large sums of capital. Security tokens are able to take these large assets and fracture them up into much smaller shares, opening up the investment opportunities to a much larger pool of investors. As security tokens enable crowdsourced investments of real-world assets and lower the minimum required investment, liquidity of the market also increases. It is much easier to buy and sell small fractions of a property as opposed to the entire property.
Thanks to digitizing these assets on a blockchain, investors have global access 24/7 to the security token market. Transparency is increased as all data is verified and tracked on the immutable blockchain, which helps prevent fraud and manipulation.
Finally, security tokens allow a reduction of costs associated with investing, as they reduce the need for intermediaries such as bankers. This also greatly improves efficiency in the investing world. All of these benefits make security tokens a very attractive investment opportunity.