Explaining Asset-Backed Tokens to Your Family over Christmas Dinner

This Christmas, what gift do you intend to give members of your family? A nice trip? A family get-together? Packed gift boxes? Or a big home party? Whatever the conclusion you arrive at, it definitely sounds fantastic. But you should also include a box of knowledgeable information that can help your family members in 2022 and beyond.

Cryptocurrencies and blockchain technology are no longer alien even to kids nowadays. Your family might not have a good grasp of how this technology works, but the buzzword? It is certain they have heard it many times and over.

Leading your family in an enlightening and engaging casual conversation about the emerging future of investment is one of the things you need to give them this period, and we will show you just how you can do that.

In this article, we have prepared a point of discussion that you can use as a guide for family enlightenment during this festive season. You should teach your family about alternative investments and Asset-Backed Tokens (ABT).

This aspect of cryptocurrency is seeing exponential growth and you can prepare your family on the path to knowing all about it.

So let’s dive right in!

What are Asset-Backed Tokens?

Perhaps you got curious kids, the first place to start the discussion is to explain what Asset-Backed Tokens are, and we will do just that for you.

In the simplest explanation, ABT is composed of two keywords - Tokens and Assets. So, when a token is issued and it represents the value that your money can hold for a particular asset, we call that kind of token ABT.

Let’s put it this way, you want to invest in gold but you cannot afford to buy a whole bar, so you drop your money in a pool where others also drop theirs and all of you contribute to buy the gold bar. To show that you are a part-owner in the gold, you can get issued a piece of document that calculates your percentage based on the amount you contributed to the purchase. So the document you hold is valid as long as the gold bar exists. In other words, the document is backed by the gold bar.

That is exactly how ABTs work. They are tokens that represent your percentage representation in a given real-world asset. We have prepared a whole article on Asset-backed tokens on our website. You can read more about it with this link.

What are Asset-backed Tokens Used for?

Asset-backed tokens can be used for digital securities investments. With the advent of blockchain and cryptocurrencies, it is now possible to issue digital representations of securities that typically investment in traditional securities exchanges.

These securities are issued as tokens and can represent almost any asset in the physical world. Asset-backed tokens can represent a portion of your investment in real estate, oil, gold, non-fungible tokens (NFTs), venture capital, works of art and other collectibles, hedge funds, and virtually any valuable asset you can think of.

Once again, read out article on What are Asset-backed tokens, there is a broad section that details the class and kinds of assets that can be tokenized. Better still, check out the Tokenizer website for more information and live examples.

What are the two types of tokens?

You might also want to enlighten you family on what ABTs truly represent and the value they carry. Distinguishing between tokens is an effective way to get the message across. Here is what you need to know.

Essentially, there are two different types of tokens in cryptocurrency. There are utility tokens and security tokens. ABTs belong to the securities class. Security tokens are tokens that have real value in assets with the physical representation.

Unlike utility tokens, there are existing governmental regulations that  security token platforms have to comply with before they can be issued. Security tokens have asset backing while utility tokens only derive their values from project uses and lean heavily on speculations.

Here is an article that further clarifies the two token types.

Are there any Asset-Backed Cryptocurrency?

Yes, there are asset-backed cryptocurrencies. The chief among those currently present within the crypto space is the BCX token. BCX is the official securities token of the BlockX/ Tokenizer platform.

With BCX token you can easily have access to the Tokenizer platform and pick from the list of existing ABT options you wish to invest in. Once you have made your decision, you will then decide how many tokens you are willing to commit to a particular investment.

Fortunately, the BCX token is currently in the final round of its IDO and it is taking place on the P2PB2B exchange platform. You currently have the opportunity to purchase the securities investment token for a price @ $0.015. You can make payment using BTC, ETH, BNB, and USDT.

How much money can anyone make from Alternative Investments?

Well, we cannot give you a specific amount that can accrue when you make investments using  security tokens. But generally, this is how it works.

Prior to investing, agreements and investment-specific criteria are always specified. Important information about the returns and yield percentage, the maturity period, and the minimum investment amount (if one exists) would have been stated plainly.

Thus, the amount of money you earn is contingent upon the nature of the project in which you invest and its specific details.

Conclusion

By the time you're finished explaining ABTs in the order outlined above, you'll have led a knowledge-filled section over dinner. Your family can enter 2022 with confidence, knowing full well what asset-backed tokens are capable of. You, on the other hand, would have given one of the best gifts this season to your family.