What Does Crypto Equity Mean and Why You Should Pay Attention to It
People who invest money in cryptocurrencies always stay updated with the latest news and concepts related to the crypto space. Here I will be sharing everything you need to know about crypto equity.
Crypto equity refers to the issuance of digital tokens that backs equity shares of an organization. It is evolving as an effective way to raise funds for businesses to share issues in crypto coins.
However, many people get confused about the concept. In this article, you can clearly understand what crypto equity means and why they are essential?
Crypto equity is issued to the public through initial coin offerings. Blockchain projects that want to raise capital offer crypto coins to the public similarly as a traditional stock that offers their shares through IPOs.
For your understanding, I have compared IPOs with ICOs as they work similarly. There are some differences which you can understand after reading the below points.
- Consider the crypto equity as the shares of a company listed in the stock exchange, with the only difference that the stakes are in digital tokens.
- When you purchase a listed company’s shares or from the initial public offerings, then the shares get deposited to your Demat account. Similarly, when you are buying crypto equity from an ICO, the company’s shares are deposited to your blockchain-hosted account instead of a Demat account in the form of digital tokens.
However, the issuance of shares in the traditional form is very complex, whereas the digital tokens can be issued to you seamlessly. So, let us understand the advantages of crypto equities over conventional equities.
Advantages of Crypto Equity
Unlike traditional equity, crypto equity does not require banks, regulatory bodies, and compliance with the stock exchange rules. It offers complete control to the investors to invest directly in the business instead of complying with authority bodies’ regulations. However, it also involves high-risk than traditional equities.
Anyways, here are the benefits of investing in crypto equities over traditional equities:
- Decentralization: For investing in the crypto equities, you do not need any regulatory bodies like banks, financial institutions, and governments.
- Transparency: You can see every transaction in the network, which is not available in the traditional equity form.
- Globalization: Blockchain is an open-source network so that anybody can invest in crypto equity. But some countries banned their citizens from using cryptocurrencies, so you can check out whether it’s legal in your county or not.
Remember, never invest in something which you don’t understand. So, first of all, educate yourself about the risks and potential of crypto equity. After that, you can decide whether you want to take the risk or not. Now let us see some examples of crypto equities.
Crypto Equity Examples
After the disruptive technology blockchain gets into the mainstream, businesses are raising funds by crypto equity. They offer their company shares in the form of tokenized equity.
For example, a biotechnology company in the US named Quadrant Biosciences Inc. offered its shares in digital tokens. It raised more than 13 million dollars from the offering.
Like traditional equities, crypto equities also offer dividends, voting power, and other activities. However, all of these activities are operated by blockchain technology. Some tech companies are now providing blockchain-based solutions for crypto equity.
Why Should Pay Attention Crypto Equity?
It is clear from the above that crypto equities offer better services in terms of control, transparency, and use. So, the future of crypto equities will be bright in the future, but many developments are needed.
However, you need to consider the dark side of crypto equities, too, as they are vulnerable to cyber-attacks. If you want to invest in crypto equities from your android phone, visit bitcoincode.
Hopefully, the article has helped you to understand crypto equities. Now you can check out different companies that are offering tokenized equity on the internet.