PMN 101：What Is a Security Token?

If you’ve heard terms like “tokenized assets” or “RWA” (Real World Assets), chances are you’ve already come across the idea of a Security Token — a real-world investment recorded and managed on a blockchain.

It’s not a speculative “meme coin.” It’s a legally recognized security, just like a stock or bond, but in digital form.

In this PMN 101 article, we’ll explain what it is, how it works, what it means for investors, and why PMN chose this structure.

1. From ICO hype to real protection

In 2017, the crypto market was full of ICOs (Initial Coin Offerings). Many raised money quickly, but without regulation or transparency.

It didn’t take long for regulators — especially the U.S. SEC — to step in and say: most ICO tokens are actually securities and need to follow securities laws.

That’s when Security Tokens emerged: digital securities backed by real assets and issued within a legal framework.

2. How it works: Blockchain + Legal compliance

A Security Token is simply a security — like equity, debt, or revenue rights — issued and tracked on a blockchain.

• Blockchain ledger: a transparent, tamper-proof record of ownership and transfers.

• Smart contracts: automate compliance rules (e.g., KYC checks, transfer restrictions, payouts).

• Licensed platforms: such as INX, Securitize, Republic handle investor verification and regulated transfers.

PMN, for example, is issued on Ethereum, so every investor’s ownership is recorded transparently and managed automatically.

3. How it’s different from traditional securities

4. Why investors care

✅ Legal protection & transparency

PMN follows U.S. Reg D (for accredited investors) and Reg S (for non-U.S. investors). Your rights are legally defined.

🌍 Global access

Traditional private deals are often limited by geography. Security Tokens open the door to qualified investors worldwide.

💰 Easier payouts

Smart contracts can distribute returns directly to your wallet — no middlemen, no delays.

🔄 Liquidity potential

Unlike private shares that lock you in for years, Security Tokens can have regulated secondary market options.

5. Examples you might know

🟢 INX (USA)

The first SEC-registered Security Token IPO, raising over $80M, now a regulated marketplace for multiple digital securities.

🟢 Securitize / tZERO (USA)

Platforms providing tokenization and compliant trading for real estate, private equity, and funds.

🟢 BlackRock BUIDL Fund (USA)

A $1B+ tokenized money market fund launched in 2024, issued via Securitize, accepted as collateral on major trading venues.

🟢 Republic Note (USA)

A profit-sharing digital security issued by Republic, representing an investor’s right to receive a portion of the platform’s profits from successful exits across its portfolio companies. Designed to give investors exposure to a wide range of startups through a single compliant token.

🟢 Blockstream Mining Note (BMN) (EU)

Issued by Bitcoin infrastructure company Blockstream, BMN is a regulated security token representing exposure to Bitcoin mining hashrate. Investors indirectly receive mined BTC over the token’s term, without having to operate mining equipment themselves. BMN is offered under Luxembourg’s securitization framework and targets accredited investors, bridging Bitcoin mining and institutional capital.

🟢 PMN (Pivotal Mining Note) (USA)

A Japan-based product issued by PTS, backed by real Bitcoin mining revenue rights through a 3-year hashrate contract, bringing Bitcoin production to everyday investors via a compliant structure.

6. Holding a Security Token is almost the same as holding any crypto token

One of the biggest concerns for newcomers:

“Will I need special software or complicated steps?”

No — holding PMN (ERC-1404) is almost identical to holding USDT or USDC (ERC-20).

Same experience:

• Use your usual wallet (MetaMask, Trust Wallet, etc.)

• Tokens arrive directly at your wallet address

• Add the contract address to see your balance

• You control your own keys

Extra safeguards:

• Only KYC-approved wallets can hold/transfer

• Lock-up periods to meet legal rules (e.g., Reg D = 12 months)

• Transfers to unapproved addresses are blocked automatically

For you as an investor, it feels the same — but with extra legal and security layers built in.

7. Why PMN chose this path

1. Compliance first — trust starts with legal clarity

2. Backed by real assets — 3-year Bitcoin mining revenue contracts

3. Accessible to individuals — not just institutions

Bottom line:

A Security Token isn’t about reinventing the wheel — it’s about making ownership and investment safer, more transparent, and easier to manage.

For PMN, it’s the right way to open Bitcoin production to everyday investors.