What Are Energy Company Cryptocurrency Tokens And Why Do They Exist?
That’s a great question, and there is no simple answer. Generally, most energy company cryptocurrency tokens exist because blockchain companies are using them as a way to raise money without going through the traditional funding mechanisms. There are a lot of problems with that. There are a lot of scams out there. It’s not great. However, it does allow some legitimate companies ways to raise money directly from retail investors with no middlemen. Incidentally, that’s the same reason why there are so many scams!
There is plenty of information and opinions out there about what a crypto token is and isn’t. A lot of companies are saying that their tokens represent some real useful value. They use that concept to label their tokens “utility tokens” (i.e. not securities). That’s because they don’t want their tokens to be treated like the sale of securities by the Securities and Exchange Commission. That is a topic on ongoing debate, and the SEC is actively working on when and how to define tokens as securities.
Why Would I Buy Tokens?
Here is where it gets interesting. Most people out there buying tokens as a form of speculative investment. Their hope is to purchase the token cheap, and if the company behind the token does well the value of the token will increase. Of course, that contradicts the idea that a token used for that purpose is not a security. Even worse – crypto tokens are traded on the same unregulated marketplaces as cryptocurrencies. Price is rarely (if ever) tied to the performance of the company that issued the token. It’s actually kind of madness.
That being said, I have bought (a very small amount) of some tokens. I can show you how to do the same, but I felt compelled to give an overview of the situation first considering the outrageous risk associated with buying these things.
First A Gateway, Then Transfer To An Exchange
The first step to purchasing energy company cryptocurrency tokens is to convert money to a major cryptocurrency. The term gateway is generally used to describe any platform that allows you to turn government-backed money (termed fiat by the cryptocurrency world) into some type of crypto. There are a lot of gateways out there, but the only one I’ve ever used or done any research on is Coinbase (full disclosure: that link to Coinbase is my referral link. If you sign up with that we both receive 10$ worth of bitcoin). A gateway is necessary because you need to turn your fiat into crypto before you can start buying and selling crypto. However, you generally can only buy a small subset of cryptocurrencies on a gateway such as Coinbase.
That’s where exchanges come in. There are also a ton of exchanges out there. First you purchase some crypto through a gateway (most likely BTC or ETH). Then you will need to transfer it to an exchange that allows you to buy the token you’re interested in. For example, when I purchased WPR tokens (WePower Network), I purchased ETH on Coinbase, sent that ETH to the exchange Binance, and traded ETH for WPR on Binance. Coinmarketcap is a great resource for determining which exchanges have marketplaces for which tokens.
Conclusion And Caution
In conclusion, there are three major steps necessary to purchase energy company cryptocurrency tokens. The first step is to convert fiat currency to cryptocurrency (BTC or ETH) on an exchange like Coinbase. The second step is to transfer that cryptocurrency to an exchange like Binance. The final step is to trade that cryptocurrency into whatever energy company tokens are available on the exchange.
I’ll end this with a warning: this is super risky stuff. Energy company cryptocurrency token prices are rarely linked to company performance, a lot of tokens are scams, exchanges get hacked, prices are volatile… the list goes on. Be careful.
I am not a finance or investment professional and nothing on this site or in this article constitutes investment or financial advice. (unrelated – I am a registered professional engineer so please feel free to contact me if you happen to need professional advice on engineering high voltage power systems!).
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