Tone Vays: Security tokens are only safe if based on a centralized market

30 Apr, 2019 | Updated: 30 Apr, 2019
by Richard Allen
Opinion
Tone Vays: Security tokens are only safe if based on a centralized market

Many have viewed the emergence of security tokens as a positive thing, with CIVIC CEO Vinny Lingham recently stating security tokens may be the end of “crypto bubbles.” Tone Vays, however, has a different opinion, AMBCrypto reports.

In Vays’ opinion, it’s safer for a security token to be a security on a centralized market rather than a decentralized blockchain. While all virtual currencies are based on a decentralized blockchain, Vays argues that Bitcoin could never be a security as it would open up the blockchain. If Ethereum, however, were to achieve security status, it would be unsafe on Ethereum’s decentralized blockchain.

He adds that Bitcoin may survive in the market for the next 25-30 years but with Ethereum or EOS, the security tokens running on their blockchain would be putting their safety in jeopardy.

Vays explains that in the event of a hack or a bad smart contract in the Ethereum blockchain, for example, the government would hold the user responsible unless Ethereum’s blockchain is validated by the government and takes on the responsibility itself.

He added:

“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.”

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