What is Security Token Offering?
Let's find out Security Token Offering meaning, definition in crypto, what is Security Token Offering, and all other detailed facts.
Security Token Offering (STO) is a public offering term that describes the exchange of tokenized digital securities, also referred to as security tokens.
In general, tokens store and validate transactions within the blockchain ledger systems. Someone who holds tokens can use them to obtain real financial assets.
Now, a security token is a type of token that allows users to verify their identities when trying to access something in a digital environment and can be used alongside other authentication elements like passwords. Just like passwords, security tokens can be lost or hacked. Additionally, they can be stolen since a security token is a physical device.
STOs are sold in security token marketplaces and other cryptocurrency exchanges.
Security tokens are provided by a specific security token service. They can be issued on a blockchain that’s either for public or private use, also known as permissionless and permissioned blockchains.
It's important to note that STOs and ICOs should never be mixed up. That is because ICOs, unlike STOs, are genuine coins of a cryptocurrency that is completely digital.