The new age of asset investment: Tokenization

Tokenization is the approach of taking some physical asset or non-liquid assets and tokenizing it like breaking into smaller groups and putting them on the Blockchain. Anything and Everything from Equity to Real estate properties, Pieces of Artwork, Gold, Music, Intellectual Properties, trademarks, your favorite football club/team, or painting can be broken into smaller parts with equal rights as if they were shares of a company and can acquire a block of it becoming a token holder and owner of a portion of the property. you no longer need large amounts of capital to be able to invest in illiquid markets.

So let’s take real estate investment because real estate has been the biggest use case so far in terms of tokenizing in today’s world of real estate Some of the problems with it is it’s highly illiquid for example¬†Mike invested in this particular apartment/flat located in a prime spot in the plush neighborhood put his money in and buys it at the current rate as a long term investment, however after months or years Mike become financially stressed and want to sell a small portion of it say it he requires about half a million, the value of this apartment is 1 Million, so if mike tokenized it that can be split into 10,000 different blocks or tokens.

Now Mike holds 10,000 tokens worth 100$ each so his apartment/flat becomes digitized and available to interested buyers not necessarily institutional investors but any who have small capital mike apartment tokens will be listed on exchanges and will be open to all for purchase, this not just benefits the seller but also the buyer since it reduces Time as to execute such transaction normally attracts a lot of paperwork, legal aid, consent, etc because this transaction is done on Ethereum platform using smart contracts and blockchain technology so everything is safe and secured no scope of fraudulent thus providing more Transparency That’s what Tokenization is all about. And through TOKENIZATION anybody can acquire a block/piece becoming a token holder and keeper of a portion of that property.

Similarly, in the entertainment space, you can think of a creative in nature art film, best tv shows any kind of entertainment-based content these can all be tokenized and it’s a great way to fractionalize the ownership of these things which starts to open up a whole new world of sort of community and in a sort of mutual investment right if you think about a movie right imagine you can envision sort of the entire fan base of a movie owning a piece of that movie or part of you know the products or services or concepts that are being talked about in that movie right there are all kinds of avenues where you can start to attach some kind of token or value to these types of assets so pretty interesting stuff you can get pretty creative with it, this might sound crazy but these are possibilities with this technology which is pretty compelling. 

The market is projected to grow rapidly it has already created lots of buzz in the real estate market lately however with advancements in technologies, threat levels would also rise, creating the demand for understanding and absorbing new solutions, need to establish the right set of security protocol, strong measure to deal with jurisdiction legal compliances for the token to remains compliant in both issuer and buyer when doing cross border transactions, platform integration for providing technical and economic solutions.

You should not tokenize everything even though you like the idea of tokenizing that’s probably something that needs to be said to hear, just because you ‘Can’ doesn’t mean you ‘Should’ so need to think about the old used cases and also just the difference between what we’re calling security tokens and utility tokens it’s all confusing right now it’s incredibly frustrating sometimes, tokenization paving its way to go fully mainstream and achieve limitless possibilities.