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Basics

A blockchain is a ledger showing the quantity of something controlled by a user. It enables one to transfer control of that digital representation to someone else. Of the many possible uses for blockchain technology, the reporting of who owns what is one of its core functions. This is likely why the first, and to date most successful, use case for blockchain technology has been Bitcoin, which was announced by Satoshi Nakamoto on October 31, 2008. The Ethereum ERC20 protocol and other projects show tokenized assets that use another blockchain can be created with a wide variety of purposes and structures. Tokens offer several advantages to traditional shares or other participation mechanisms, e.g. faster transfer speed, increased user control and censorship resistance, and a reduction or elimination of the need for a trusted third party.

Bitcoin also has the capability of serving as the rails for tokens by using projects like Omnilayer, RSK, or Counterparty. However, neither Bitcoin nor Ethereum were specifically designed for facilitating ownership of additional assets, and the users and development teams generally prioritize other features.