What is a blockchain?
A blockchain is an immutable database or ledger that records transactions. This record is highly-secure, publicly verifiable and personally anonymous (excluding IP). The structure of a blockchain is decentralised, meaning that no one person or organisation operates or owns it – it’s run instead by the community of users.
Many people are familiar with large cryptocurrencies like Bitcoin, Ethereum and Cardano, and a growing number of people are familiar with non-fungible tokens (NFTs).
A Coin
Is a digital currency (cryptocurrency) that’s similar to traditional payment
Used as exclusively as source of payment (e.g. Bitcoin, Ethereum, Ada)
Is mined
Has its own blockchain (e.g. Ether is the coin of the Ethereum blockchain)
A token
Represents a digital asset or deed
Used as a source of payment, but also in digital contracts
Is minted
Is issued on top of an existing network
What is a utility token?
Utility tokens are increasingly popular across various blockchains. A utility token gives holders access to a special service or product within a defined ecosystem. Common utilities include access to real-life events, fractionalised ownership of fine-art, or lucrative investment opportunities.
What’s the difference between a security token and a utility token?
Security tokens derive value from external tradable assets (such as nickel), and they are subjected to strict federal securities and regulations. While regulations are essential, the blockchain industry itself is nascent, meaning the barriers to accessing certain industries are substantially higher than average.
A crucial difference between utility tokens and security tokens is investor expectations. Security tokens are tied directly to the company’s valuation, whereas utility tokens are not. This means that if a company takes a tumble, a utility token will more-or-less retain its value, whereas a security token would rise or fall in line with the company. We opted to mint utility tokens rather than security tokens because they come with a lower risk of loss to our partners.
NIKL is the first token of many more to come. When the community and industry reaches maturity, we plan to mint asset-backed security in order to increase returns on investments.
NewTek is not a means of getting rich quickly – it’s a long-term roadmap that aims to grow wealth in a way that is stable and secure, while making a positive impact on the planet.