Tokenization and Blockchain

Hello again everyone. Last time, we talked about tokenization: what it is, what it’s used for, and how tokenization is already being implemented today. However, today we’re here to talk about tokenization and how it’s been integrated with blockchain to introduce asset tokenization.

The basic gist of asset tokenization is that rather than having to deal with lawyers and banks and other third parties to confirm your ownership of an asset, all you would need is a virtual token. Think of it like this, in the same way, that you can own stocks in a company and those shares would represent a specific ownership stake (no matter how small) in that company, with asset tokenization, you could own a token that would represent your ownership percentage in any asset from a residential building to a pokemon card.

So what are the specific advantages of tokenization you ask? One big one, convenience. Because asset tokenization runs on a blockchain, there would be no need for a third party (like a bank or government) to verify the transactions' legitimacy and transactions could be completed instantaneously. Furthermore, if a deal runs on a smart contract, the transaction could be executed immediately after the requirements from both parties are met, making the whole process even more efficient and safer for all parties involved. Rather than a transaction requiring days or even weeks to be completed, with tokenization, a transaction could take seconds. Blockchain eliminates the hurdles these types of transactions would traditionally need to jump through.

Tokenization isn’t only popular because it’s convenient, it is also cheaper than traditional asset transactions. Rather than having to spend money on intermediaries or third parties to complete the transactions, both parties could just contact each other directly and set up a smart contract to execute the transaction when ready. The very fact that tokenized assets are easier to transfer and more liquid makes dealing with assets cheaper.

One last thing to point out about asset tokenization is security. Because blockchain is a digital ledger that everyone is constantly adding to and always has access to, that means that it’s almost impossible to alter or change the information once it’s recorded. So by tokenizing an asset and using blockchain to do so, you are making transactions more transparent. Every transaction that takes place on the blockchain is available to all its participants. This is important for any user, as they can trace the entire history of all actions with a particular asset, verify its origin, and see how its ownership has been transferred.

In a world where society is rapidly heading towards everything being digitized, it can be comforting to some to still have control over something physical. Tokenization makes it so that people can still have control of their physical assets but in a way that is still up to date with today’s tech. As everyone knows blockchain is the future and tokenization is just one of the areas where blockchain can benefit anyone from a property manager to a card collector.

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