ABC Tokens is committed to educating property owners and investors about the emerging opportunities for cryptocurrency and digital asset securities in the real estate industry.

What is Blockchain?

Blockchain Basics:
Blockchain technology was created in 2008 as an Internet-based network for issuing, transferring ownership, and confirming Bitcoin cryptocurrency transactions. The most notable feature of blockchain is that after a transaction has been recorded and confirmed, no one can make changes or alter transaction details. This provides assurance to all parties that no one has falsified information about the transaction.

Today Blockchain has also become widely used in many non-financial industries to improve timeliness and provide a secure, permanent system of record for all types of transactions that require an accessible record of chain of custody and ownership. For example, to assure quality and wholesomeness food producers are now using the blockchain to track products through every step in the supply chain from seed to store.  

How ABC Tokens uses Blockchain Technology:
We use blockchain technology to create and maintain a record of ABCTokens which are SEC regulated digital asset securities...also known as “Tokens”. In data science a token is a unique value—like a randomly-generated number—assigned to sensitive data representing the actual information.  Thus, in a blockchain, a token is a unique private key number assigned to data stored within the blockchain. Assigning a token to an asset is called "tokenization."

What are Digital Asset Securities?

While crypto tokens, like cryptocurrency, can hold value and be exchanged, they can also be designed to represent physical assets or more traditional digital assets, or a certain utility or service.

For instance, some tokens represent tangible assets such as real estate and art, as well as intangible assets such as processing power or data storage space. The process of creating tokens to serve these various functions is known as tokenization.

Security tokens are a bridge between the traditional finance sector and blockchain and they benefit both equally. That’s because assets divided up via tokens already exist in the traditional market—even the biggest markets like equities (either public or private equity) and real estate.

Security Tokens are both a digital asset and a cryptocurrency. They are essentially liquid, digital contracts, representing fractional ownership of any asset that already has value, like real estate, a car, a painting, or equity in a company. ABC Tokens are Security Tokens, and by calling them security tokens, we’re acknowledging that our tokens should be treated like any other investment offering of securities.

The Howey Test refers to the U.S. Supreme Court case for determining whether a transaction qualifies as an "investment contract," and therefore would be considered a security and subject to disclosure and registration requirements under the Securities Act of 1933 and the Securities Exchange Act of 1934.

Under the Howey Test, an investment contract exists if there is an "investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others."

Here at ABC Tokens, we take SEC regulatory compliance very seriously, and we’ve taken every precaution to comply with United States securities laws, so our investors can feel confident about their investment and any future regulatory laws the SEC could implement against cryptocurrencies.

What is a Digital Asset?

​​If you’re just starting out in blockchain and cryptocurrency, it’s essential to understand the difference between digital assets, cryptocurrencies, and tokens. While these terms are often used interchangeably, they are different in a number of key ways. Broadly speaking, a digital asset is a non-tangible asset that is created, traded, and stored in a digital format. In the context of blockchain, digital assets include cryptocurrency and crypto tokens.

Cryptocurrency and crypto tokens are unique subclasses of digital assets that utilize cryptography, an advanced encryption technique that assures the authenticity of crypto assets by eradicating the possibility of counterfeiting or double-spending.

What does “Asset-Backed Crypto” mean?

Let’s start with the most popular cryptocurrencies, like Bitcoin and Ether, which have no hard assets supporting their value. Over their short lifetime, both Bitcoin and Ether have seen astronomical swings in value, and the main cause of that volatility is speculation. There is a growing belief that blockchain technology is “the future”, and while Bitcoin and Ether are valued by investors for different reasons, many don’t have a deep understanding of the underlying technology and their differences. So, their values sometimes rise and fall based on speculation, and of course, FOMO (fear of missing out). For those who are new to crypto investing, this can be scary, and it often prevents larger and more conservative investors (pension funds and institutions) from participating in the marketplace.

At ABC Tokens, we took a different approach. The value of our cryptocurrency is not based on technology or speculation. Instead, the value of ABC Tokens is supported by a well-known & trusted hard asset: Commercial Real Estate. The best part? Marrying the two together (blockchain and CRE) creates the best of both worlds, i.e. commercial real estate, historically exclusive, inefficient, and illiquid, is now: DEMOCRATIZED, EFFICIENT, AND LIQUID!

What is a Cryptocurrency?

A cryptocurrency is the native asset of a blockchain network that can be traded, utilized as a medium of exchange, and used as a store of value. A cryptocurrency is issued directly by the blockchain protocol on which it runs, which is why it is often referred to as a blockchain’s native currency. In many cases, cryptocurrencies are not only used to pay transaction fees on the network, but are also used to incentivize users to keep the cryptocurrency’s network secure.

Cryptocurrencies typically serve as a medium of exchange or store of value. A medium of exchange is an asset used to acquire goods or services. A store of value is an asset that can be held or exchanged for a fiat currency at a later date without incurring significant losses in terms of purchasing power.

Cryptocurrencies typically exhibit the following characteristics:
Decentralized, or at least not reliant on a central issuing authority. Instead, cryptocurrencies rely on code to manage issuance and transactions.Built on a blockchain or other Distributed Ledger Technology (DLT), which allows participants to enforce the rules of the system in an automated, trustless fashion.Uses cryptography to secure the cryptocurrency’s underlying structure and network system.

What is Liquidity

Generally real estate is an illiquid investment class with long transaction times, significant transaction costs, long hold periods and limited turnover of heterogeneous assets. Within the asset class, liquidity can also vary considerably between different assets, markets and time periods.  

The ABC Tokens process improves liquidity for property owners by providing an alternative source of capital. We also provide liquidity to investors seeking alternatives to stocks and bonds with digital asset securities that can be independently traded or sold.

What is Tokenization?

Tokenization is a process that divides the ownership of an asset (such as a building) into digital asset securities also known as “Tokens”. These tokens act as “shares” tied to the value of the asset. ABC’s investments in real estate property are converted Tokens to represent shares in our combined real estate portfolio.

We market Tokens as fractional ownership interests to investors.  One advantage of ABCTokens is to provide Investors the freedom to sell or trade their Tokens using our blockchain technology much the same as shares in the stock market are traded.

This process is simple and doesn’t require any real estate investment experience.

What’s Better than Real Estate?

Well, when it comes to investing, not much beats commercial real estate. Historically speaking, publicly traded REITs and the S&P 500 have produced nearly the same average annual return for their investors over the last 50 years.

However, it wasn’t until the Jobs Act of 2012 and the birth of Fundrise that commercial real estate became easily accessible to the average investor through crowdfunding. Fundrise has since been selected for Forbes’ FinTech 50 list four times in the past five years, with over 150,000 investors currently and nearly $10B in assets under management.

Less than ten years later, blockchain technology has demonstrated a real ability to disrupt and transform the commercial real estate industry.

With equity fractionalized on immutable and distributed digital ledgers, and then represented as security tokens, now the ownership of these high-performing assets can transfer between investors faster and cheaper than ever before.

What is a Token?

Tokens — which can also be referred to as crypto tokens — are units of value that blockchain-based organizations or projects develop on top of existing blockchain networks. While they often share deep compatibility with the cryptocurrencies of that network, they are a wholly different digital asset class.

Cryptocurrencies are the native asset of a specific blockchain protocol, whereas tokens are created by platforms that build on top of those blockchains. For instance, the Ethereum blockchain’s native token is ether (ETH). While ether is the cryptocurrency native to the Ethereum blockchain, there are many other different tokens that also utilize the Ethereum blockchain.

Crypto tokens built using Ethereum include DAI, LINK, COMP, and CryptoKitties, among others. These tokens can serve a multitude of functions on the platforms for which they are built, including participating in decentralized finance (DeFi) mechanisms, accessing platform-specific services, and even playing games.

Typically, tokens are programmable, permissionless, trustless, and transparent.

Programmable simply means that they run on software protocols, which are composed of smart contracts that outline the features and functions of the token and the network’s rules of engagement.

Permission less means that anyone can participate in the system without the need for special credentials.

Trustless means that no one central authority controls the system; instead it runs on the rules predefined by the network protocol.

And finally, transparency implies that the rules of the protocol and its transactions are viewable and verifiable by all.

How is ABC Complying with SEC Securities Regulation?

ABC understands and embraces the SEC’s role in protecting investors from fraud, hacks, money laundering, and market manipulation. There are thousands of cryptocurrencies to choose from, but only a few are backed by hard assets (like gold or real estate) and comply with United States securities law.

At ABC, we’ve adopted a blockchain protocol named “Polymesh”, designed and built specifically for security tokens, with a transparent, immutable, and cost-effective solution which enables our clients to invest with confidence. Commercial real estate investing is now more inclusive, efficient, immutable, transparent, AND LIQUID than ever before.