Since the start of 2019, the introduction of security token had been looming large in the cryptocurrency space. Vinny Lingham, CEO of Civic, had recently stated that as security tokens enter the mainstream crypto ecosystem, the “crypto-bubbles” are likely to disappear.
Tone Vays, however, had a different perspective on the security token’s place in the virtual asset industry. He stated that it was safer for a token to be a security on a centralized market and not a decentralized blockchain.
Virtual currencies are all based on a decentralized blockchain. He said that it would be impossible for Bitcoin to be a security as it would open up the blockchain, but if Ethereum [ETH] achieves security token status, it would likely be unsafe on the decentralized blockchain of Ethereum.
He explained that Bitcoin might survive in the market for the next 25-30 years but in the case of Ethereum or EOS, the security tokens in their blockchain would be in jeopardy in terms of their safety.
Tone Vays said that in the event of a hack or bad smart contract in the Ethereum blockchain, for example, the government would directly hold its user responsible for making a bad decision unless the government validates the Ethereum blockchain’s legitimacy and takes the responsibility on itself; in an event that Ethereum disappears or the tokens loses value.
“The tokens can be given regulatory compliance which is already very difficult if your token is being traded on anonymous exchanges. The main issue remains that there is still a technological risk on which database the token would be sitting on and how secured that database would be.”
The post Security Tokens are only safe if they are based on a centralized market, states Tone Vays appeared first on AMBCrypto.