A radical thought...
tokenisation
Around the world tokenisation is developing as an alternative to cash and digital forms of national currencies.
The essential legal structures and safeguards are now moving ahead, or sufficiently in place, that It’s time we all considered how to incorporate tokenisation into our lives, our business transactions, and our investment portfolios.
Tokenization is the process of converting rights to an asset into a digital token on a blockchain or distributed ledger.
This token represents a unit of ownership or access rights and is often used to fractionalize traditionally illiquid assets, such as large infrastructure project, large retail complexes, high rise office buildings, or a portfolio of collaboratively-created innovation - making them more easily transferable and divisible.
How come? Because you are only acquiring a small percentage ownership of the whole. And the percentage can readily increase or decrease.
This decade, tokenisation has gained significant attention and is being used in various ways across different industries, including the business world, cryptocurrencies, and beyond.
Tokenisation Example 1: Real Estate
Tokenization allows for the division of real estate assets into tokens, enabling fractional ownership.
This makes it possible for smaller investors to participate in real estate markets that were previously only accessible to high-net-worth individuals and institutions.
RealT, for example, is a platform that tokenizes real estate properties.
Tokenisation Example 2: Venture Capital and Startups
Tokenization has enabled startups to raise funds through Initial Coin Offerings (ICOs) and Security Token Offerings (STOs).
It has provided a new way for companies to access capital and liquidity.
This has disrupted traditional venture capital funding models.
Tokenisation Example 3: Art and Collectibles
Tokenization has been used to represent ownership or shares in valuable art pieces and collectibles.
This allows multiple investors to hold a stake in a piece of art, and it can facilitate easier trading of these assets.
Companies like Maecenas and CurioInvest have explored this space.
Tokenisation Example 4: Supply Chain & Logistics
Blockchain-based tokenization is used to track and manage supply chains efficiently.
Each product or batch can be represented by a token on the blockchain, allowing for transparent and traceable supply chains.
IBM's Food Trust and VeChain are examples of such projects.
Tokenisation Example 5: Financial Markets
Traditional financial assets like stocks, bonds, and commodities are also being tokenized.
This can streamline the trading and settlement process, reducing costs and increasing liquidity.
Tokenisation Example 6: Tokenization of Assets and Ownership Rights
Beyond financial assets, tokenization can represent ownership rights in various assets, such as intellectual property, patents, copyrights, and more intangible assets.
Tokenisation Example 7: Cryptocurrencies
Cryptocurrencies themselves are tokens. Bitcoin and Ethereum, for instance, are tokens that represent ownership of value within their respective networks.
These, and other, cryptocurrencies have revolutionized the concept of money and digital value transfer.
Tokenisation Example 8: Utility Tokens
Many blockchain platforms use utility tokens to access services or resources within their ecosystems.
For example, Ethereum uses Ether (ETH) as gas to pay for smart contract execution and transactions.
Tokenisation Example 9: Non-Fungible Tokens (NFTs)
NFTs are a type of token used to represent ownership of unique digital or physical items.
They have been widely used in the art, gaming, and entertainment industries.
Tokenisation Example 10: Decentralized Finance (DeFi)
DeFi platforms use tokens to create decentralized financial services such as lending, borrowing, trading, and yield farming.
Tokens are often used as collateral or for governance within these platforms.
Tokenization offers several benefits, including increased liquidity, fractional ownership, transparency, and programmability.
However, it also comes with regulatory challenges and security risks, which businesses and industries are working to address as tokenization continues to evolve and disrupt traditional models.
The technology is likely to play a significant role in reshaping various aspects of the global business landscape in the coming years.
Join the conversation
How can you create and use your own tokens – like High Intrinsic Value Units - as you form your Dream Teams of Collaborating Businesses that pool resources and networks, act to futureproof each other’s core businesses, and innovate a portfolio of new add-on business that share equity based on the value added?