On this episode we explore the difference between shares and tokens. We look into how they are evaluated, the regulatory differences, the barrier of entry, how ownership works, why they each have value, the history and the future potential.
Show notes:
Shares are like tokens, but how do they differ?
Amazon doesn’t pay a dividend yet trades at a high market cap.
Tokens often do too but I feel people have more critic for a governance token e.g. it’s not attached to any value etc.
Tokens are more advanced: programmability: burn, mint, lock up all automated
Tokens often evaluated based on mechanism (governance) than on the business
Stocks are evaluated based on cash flow, potential future cash flow
What makes stocks valuable? Amazon vs. dividend corporation
Value and growth stock
How to profit from stock - selling it holding Amazon for three years won’t give you anything
Ownership in a business
Can’t cash out any piece of itI
Metrics of earning income eps, P/E ratio
Tokens are not evaluated on cash flow enough
What if we had two businesses with similar cash flows and other metrics. One would have a token one shares, what would be the difference?
If in the traditional equity/share world a corporation doesn’t pay any dividend or reduce supply or increase demand that’s not a problem, but if the same is done in crypto, people would be careful to invest.
But enough tokens shares to influence governance
What does ownership really mean
Watch this episode on YouTube:
Disclaimer
Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research.
None of this is legal advice. This podcast is strictly educational. Talk to your lawyer.
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#21 - Shares vs. Tokens