If you have ever used your supermarket coupons or visited the casino and won a chip, you have a basic understanding of tokens.
Just like one casino chip can be worth a hundred dollars when encashed, a digital token works in the same manner. It represents a monetary value in numbers.
You can use the digital token-
- Own a set of monetary resources or assets
- Make cross-border payments with the same
- Assign it to a different individual or business
- Redeem it for formal currency (dollars, pounds, euros, etc.)
In recent years, new technologies have been making their presence felt in the financial payments ecosystem. The advent of Cryptocurrencies, Blockchain Technology, NFTs, etc. have revolutionized how financial systems would operate.
If you wish to explore digital tokens that can use, click here to know more.
In this resource article, we are going to look at how Digital Tokens work. We will examine some of the benefits as well as discuss the future implications of using the same.
Digital Tokens: Meaning and Definition
In the last few years, there has been a growing clamour for improving the efficiency and shareability of financial assets. This has led to the innovation and development of- digital assets and securities, crypto tokens, security tokens, and utility tokens.
A Digital Token like a Bitcoin or Ether is created on a defined software and ordained with a value. In some instances, the value is fixed, while in others, it is subject to the forces of the open market. Specifically, a digital token’s best understanding is to consider it as a form of virtual currency.
Just like cryptocurrencies (Bitcoin, Ether, and Litecoin), a digital token is created and run on Blockchain technology. The same makes it interoperable, efficient, safe, and dynamic. Many digital tokens are considered as ‘securities’ by governments.
Benefits of Digital Tokens over Traditional Finance
Convenience and Usability-
Carrying physical currency, debit, and credit cards everywhere is simply not possible. With digital tokens, all you need to do is carry your smartphone and get payments done with one single tap. This is a simple, easy and convenient way of making payments. This is perfect for those who are always traveling for work-related activities.
Safety and Online Security-
Every time your bank sends you an OTP for verification, did you know that the same can be intercepted? Digital tokens help in establishing additional security levels over the already existing ones. For example, there is no OTP activation required, as only one phone is linked. Additionally, you have multiple encryption layers that make interception impossible.
Simple and Uncomplicated Set-Ups-
You do not have to be a technical wizard to start using digital tokens. The process is relatively easy and straightforward. This is what adds to the convenience of using digital tokens over-complicated mobile wallets. The set-up encompasses adding your phone and email id. You can also enable notifications to help you be aware of successful transactions that are completed.
Environmentally Friendly and Responsible-
If you are someone that cares for the environment, you would want to stay away from paper currency and plastic cards as much as possible. With digital tokens, you are not contributing in any way, shape, or form towards polluting the environment. According to environmental activists, this is the cleanest and most responsible way of accessing your finances.
How Digital Tokens are Shaping the Future of Global Finance?
One of the most important things that you need to know about digital tokens is that they run on Blockchain Technology. The same makes them-
We all know how digital has made it possible for businesses and individuals to send money to different parts of the world. We are also aware of the fact that banks, financial organizations, and payment gateways exploit users by extracting through a ton of hidden charges.
This is why organizations like Mantra Dao have taken it upon themselves to cleanse global financial systems. They have innovated on digital tokens that run on open networks (Blockchain Technology) and help improve financial inclusion to the world’s unbanked populations.
The future of economic systems is running and promoting decentralized financial services. It is a model that is run by the users themselves. This makes it accountable, responsible, and far more efficient than any other payments model that exists in the world today.
The Bottom Line
If you are looking to experience a revolution in global finance, you need to start using digital tokens. They are at least five steps ahead of mobile wallets in terms of their usability, efficiency, and safety. You do not have to pay huge amounts in processing and conversion fees.
If you have any other questions, you would like us to answer on digital tokens, please let us know in the comments. We will be more than happy to address every one of your queries as soon as possible.