Three Kinds Of Tokens
Basically, there are three types of tokens as the Swiss financial regulator FINMA have recently defined (https://www.finma.ch/en/news/2018/02/20180216-mm-ico-wegleitung/) them in the country’s guidelines for ICO: payment, utility and asset tokens.
Payment tokens are only used for purchasing and selling services and products provided by a company or when dealing with others participants, for example, when a photographer pays to a designer within their IPStock cooperation.
Utility tokens are needed for getting access to a service, that’s something like an entry tickets to the cinema. Yes, that looks like a payment token, but remember that a ticket to the cinema gets you to the cinema’s hall but cannot buy you popcorn.
Asset tokens give a right to take a stake in a company or a piece of its equity or a voting right when electing a board committee or whatever else.
By the way, as IPStock is a Switzerland-based startup, it will fall under these guidelines which seem to be very favorable and friendly towards ICO campaigns, which guarantees IPStock the absence of regulating barriers for the company to operate and the protection by the country’s laws.
All kinds of token can be bought and purchased outside a service they are designed to serve, for example, through a crypto exchange, if the issuer wants to get them publicly traded and a crypto exchange has an interest in having them on its platform.
Who is Mr. IPS?
IPStock’s token is called IPS. This is a purely payment coin needed for consumers and creators to pay each other for images and services. Under the Swiss guidelines mentioned above it’s not treated as a security. Neither it promises and guarantees any passive income, a voting right, etc. It’s like money, the dollar or euro, to pay and be paid, nothing more.
Why does IPStock then need a token for operations and why it’s not possible to deal with fiat money only? After all, IPS earned through business within IPStock need to be exchanged for traditional money or cryptocurrency to buy a ticket to the cinema or book a hotel in a resort.
The answer is clear and simple. IPStock like vast majority of startups running ICO campaigns is a global company which means the necessity to deal with consumers from all over the world. Using traditional currencies would result in a need to establish a great multicurrency exchange within the platform and hiring a financial intermediary (i. e. a global bank) to keep it running and pay it for its services. Let alone a need to pay attention to nuances of currency legislation in all the countries in the world and monitor changes to it. The startup would be turned into a 20-stored office with numerous financial accountants and lawyers with their high salaries to be paid by the platform’s users.
The token is like the US dollar in global trade, a commonly accepted utility, a common financial language, which lets you escape the necessity to spend time for calculating exchanges rates.
Totally, 60,000,000 IPS will be issued with half of them to be distributed during an ICO campaign. Parties to obtain the tokens through the ICO include both investors and IPStock founders and developers. Part of the emission will be spent for the purchase of visual content to launch the trade within the platform and attract massively consumers.
The second part to be reserved during the ICO will be further spent for establishing new services and implementing innovations, for instance, adding VR/AR content to the system.
Does It Make Sense To Buy IPS As Investment?
IPS as a payment token will rise in value and, consequently, in price, but it’s first of all a means of payment, not an asset to buy for further reselling at a higher price.
Why a payment token can become more expensive though it’s just a method of transferring money? The answer comes from macroeconomics practice where currencies rise and fall on the basis of performance of the economies they represent. The foreign exchange market fluctuations depend both on fundamental and occasional parameters and events, first and foremost, on the state of trade balances. In case of IPStock, the price will significantly depend on the performance of the service: the better performance – the higher demand for the tokens – the higher the price of the tokens.
But the demand has positive stimulus not only in the form of the performance, it is also encouraged by the limited edition. Just in case of the Bitcoin, the strictly defined figure of coins in circulation creates additional hype around it.
All these thoughts are based on the practice of the crypto market. The prominent startup Sia (https://blog.sia.tech/sia-triannual-update-september-december-2017-8afdf9c10325) with SiaCoin as a payment token launched its services of decentralized cloud storage which borrow free space of hard discs drives of ordinary people worldwide and sell it to those who need their files securely stored for reasonable money. Sia is not still operating in full mode and adds some features from time to time, but its basis services work. Look at the chart of SiaCoin (https://coinmarketcap.com/currencies/siacoin/). With 32.6 billion coins circulating their day trading volume is about $20 mln, the capitalization is incredibly more than $887 million. The price of the Sia token has skyrocketed since April 2017 a few hundred times. And it’s undoubtedly going to reach new highs.