In the present financial world, assets are tied to one’s name. Whether it’s a car, a house or a gold brick, it’s all connected to just our names and they can only be exchanged or traded as a whole. But, in a future where tokenization reigns supreme, assets can be broken down to smaller chunks or pieces.
What that essentially means is you can have a single proof of ownership for all your assets.
Let’s break it down. Assume that you have 100,000 dollars. Now, your 100,000 can be broken down to 100 tokens, each worth a $1,000. Since your assets are now represented as tokens, you can trade them within the blockchain system.
The benefit is that you can trade peacefully without having to depend on middlemen.
So, to put it simply, tokenization assumes a world where all assets can be traded with the utmost ease. Liquidity isn’t limited by cash or other tangible assets. Tokens can be used to represent anything that you own. In fact, it can be used to represent your own time as well.
Tokenization eliminates the need for middlemen. It facilitates online transactions through a decentralized system, breaking down barriers to access and power. Though we may still have to deal with inequality in the uneven distribution of wealth, people will have more control over how and what they can trade.
These transactions are made faster, secure and more affordable, thanks to blockchain technology. Assets can be liquified and investing made accessible to those who have traditionally been restricted due to geographical barriers or technological barriers.
Interoperability
Blockchain technologies are currently being used to solve the issue of operability, which means that everything can be programmed. These technologies are relying on automated market-makers to serve as the medium.
A good example is the internet, which has already eliminated gatekeepers in the arena of information sharing. Similarly, once we eliminate the hierarchies in financial systems, we’ll start to see costs decrease, volume increase, and more trading. This results in a more connected system that spans the globe.
Personal Tokens
In the future, blockchain technology will allow us to create coins for each asset or investment. For example, you can create tokens for your house and denote a value to each token. This will allow you to sell your home or parts of it, which will allow you to liquify the asset without getting rid of the whole asset.
So, you can exchange a piece of the asset for something that appreciates at a higher rate.
Carrying out such trades is possible without being present in a given location. Borders can be brought down. Unlike it is in a global currency system, tokenization allows assets to retain value within a single profile that contains many decentralized paths of the transaction.
At Jointer.io we realized the scalability issues by tokenizing assets one at a time. Therefore, we set out to tokenize the entire market!
About the Author
Kyle is the Chief Make-It-Happen Officer at Jointer.io, which seeks to tokenize the entire real estate industry rather than a single property. Believer and Investor in DLT / Blockchain technology.
