The sale of security tokens is the fusion power of the blockchain space: it could change everything about its industry in one fell swoop, but it always seems to be just a few years over the horizon. Blockchain evangelists have been forecasting wide acceptance of security tokens to promise the moon from the very beginning of the blockchain itself -- and well-founded user cynicism is beginning to raise questions about whether blockchain-based securities will ever live up to their potential.
Incredible new tools like Etherparty’s Rocket 2.0,are poised to change that, though they’re just part of the huge overall shift toward support for blockchain securities. Now, it can be quick and easy to design an ICO in total compliance with local securities laws, just as those very laws become more friendly toward blockchain, itself.
While it may have been a question at one time, these days the future of security tokens is finally clear: they’re coming, and they’re going to fundamentally change the way we do business.
1. Ubiquitous blockchain infrastructure projects are finally here
The problem with brilliant blockchain ideas is that in order to work in the real world, they often require brilliant blockchain infrastructure to be in place. For instance, perhaps a company wants to track and report profits from a particular service offering, but can’t because there still isn’t an easy-enough crypto payment option for the point of sale. Historically, it seemed there was always something scuttling the best ideas.
At the same time, blockchain hosting platforms have gotten a lot more powerful and diverse. Ethereum is no longer the only game in town, and while it is still an extremely powerful platform, more modern alternatives like NEO and EOS can enable even more exciting ideas. And with private blockchains like MultiChain and Fabric, platforms can improve performance and compliance by specializing in a single type of client and application -- for MultiChain, for instance, it’s finance.
But probably the biggest impediment to the success of security tokens is the lack of liquidity; even if you can buy them, can you sell and/or trade them? Thanks to an incredible variety of security token exchanges that are about to open their doors, the answer is yes, you will be able to sell and trade them. Blockchain infrastructure is passing the tipping point from the adolescent stage into adulthood.
2. Legislators are finally catching up to their constituents
Many of the most challenging problems in blockchain have not been due to immaturity in the blockchain space, but rather to intentional roadblocks put up by legislators. By now, though, the crypto-lobby has been chipping away at this knee-jerk hostility long enough to have made real progress in virtually every jurisdiction that matters. **The law used to be crypto’s arch enemy; soon, robust support from major legal bodies could be the blockchain’s greatest asset. **!
Securities legislation still lags far behind the pace of technological progress, but government is starting to catch up. The US is beginning to give blockchain a formal definition, which will go a long way toward allowing it to be integrated into existing legal systems without confusion. The members of government are also getting more active in their support for the space, with constituents and donors both demanding movement on this important issue. And other major investment bodies are starting to make way for blockchain too, including the Dow Jones and NASDAQ stock exchanges.
This all helps ratchet blockchain forward in terms of acceptance, investing major players in the continued success of blockchain and turning them into the technology’s loudest advocates in government. But watch out for privacy-phobic governments the People’s Republic of China, where continuing legal change could someday go too far, and hurt blockchain’s growth potential with overly restrictive rules.
3.Easy-to-use software makes blockchain securitization easy
But ultimately, all this potential is useless if it only exists in a space where development is too difficult and expensive for the vast majority to get involved. Thankfully, now we are also seeing the release of advanced toolsets that make blockchain development “WordPress easy” -- something that’s been badly needed.
When a company wants to take a concept from idea to reality, they can now turn to Rocket rather than spending years employing expensive blockchain developers. From blockchain software developer Etherparty, Rocket allows new entrant to the space to quickly set up everything they need to launch a new ICO crowdsale, and get their blockchain-based platform up and running. Its intuitive interface brings the blockchain to a wider audience than ever before.
Rocket also incorporates automated compliance software, so companies looking to enter legally fraught spaces like the securities market can do so with peace of mind. The platform can quickly standardize contract terms for your region, making it all but impossible to run afoul of regulators, no matter how ambitious your idea. And if your idea is too ambitious for the current legal regime? Rocket’s ability to quickly vette blockchain projects for legal compliance makes it the perfect tool for finding those pain points, so they can be eliminated.
Security tokens are poised to be one the most important and profitable applications of blockchain tech, and the one that finally disrupts the financial world like blockchain was supposed to from the beginning. Blockchain infrastructure has finally advanced to the point that it can provide for real securities products, governments are finally getting out of the way of securities progress, and next-gen tools like Rocket are poised to provide the airtight software and legal platforms that securities need. So despite all the false starts that security tokens have experienced over the last several years, their future is looking bright after all.