Then and Now of Token Economy

Historical references to the tokenisation of assets can be found as far back as the 13th century. The first known use of a token was for the exchange of commodities. In the 17th century, tokens were used to represent shares in joint stock companies. In the 19th century, tokens were used to represent gold and silver coins. Today, tokens are used to represent a wide variety of assets, including real estate, art, and even carbon credits.

#Tokenisation is the process of representing a #real-world #asset with a #digitaltoken on a blockchain. The token can be used to represent anything of value, such as an commodity, a loyalty point, or a share in a company. The first step in tokenisation is to identify the asset that will be tokenised. This asset can be anything from a physical commodity to a digital file. Once the asset has been identified, it is important to select a blockchain that is well suited to the needs of the asset. For example, if the asset is a physical commodity, then a blockchain with a strong emphasis on security and immutability would be a good choice. Once the asset and blockchain have been selected, the next step is to create the digital token that will represent the asset on the blockchain. This token can be created using a variety of methods, such as hashing or cryptographic signatures. Once the token has been created, it can be stored on the blockchain.

The benefits of tokenisation are many and varied. By tokenising an asset, it can be traded on a blockchain in a similar way to how cryptocurrencies are traded. This allows for 24/7 trading of the asset, as well as increased liquidity. Tokenisation also allows for the fractionalisation of assets, which means that they can be divided into smaller units and traded accordingly. This opens up investment opportunities that were not previously possible. Another benefit of tokenisation is that it can help to reduce #fraud. This is because the tokenisation process creates a permanent record of the asset on the blockchain. This record cannot be altered or deleted, meaning that it can be used as an authoritative source of truth. Finally, tokenisation can also help to reduce the cost of compliance. This is because the tokenisation process can automate the compliance process.

For example, if a company is required to comply with KYC (Know Your Customer) regulations, then the tokenisation process can be used to verify the identity of the customer. This can help to reduce the cost of compliance for the company. The tokenisation of real-world assets is a relatively new concept, but it is one that is rapidly gaining traction. There are a number of different platforms that are now offering tokenisation services, and the number of assets that can be tokenised is growing all the time. In the future, it is likely that tokenisation will become the norm for a wide variety of assets.

The history of tokenisation is long and varied, with references dating back centuries. The process of blockchain selection is a relatively new development, but one that has the potential to revolutionise the way in which assets are traded and managed. Tokenisation has been used in a variety of different contexts, including the sale of physical assets, the management of digital assets, and the transfer of ownership of digital assets.

The first recorded use of tokenisation was in the sale of physical assets. In the early days of commerce, merchants would often exchange goods and services using tokens. Historical references to the tokenisation of assets can be found as far back as the 13th century. The first known use of a token was for the exchange of commodities. In the 17th century, tokens were used to represent shares in joint stock companies. In the 19th century, tokens were used to represent gold and silver coins. These tokens would typically be made from materials that were readily available, such as clay or metal, and would be inscribed with the name of the merchant and the value of the goods or services being exchanged. The use of tokens allowed merchants to conduct transactions without having to carry large amounts of cash with them. Tokens also had the advantage of being difficult to counterfeit, which made them a more secure form of payment than cash. The use of tokens for the sale of physical assets declined with the advent of paper money and coinage. However, the use of tokens for the management of digital assets, such as computer software and databases, became increasingly common in the late 20th century. The development of blockchain technology has led to a new form of tokenisation, known as blockchain-based tokenisation. Blockchain-based tokenisation involves the use of a distributed ledger to record the ownership of an asset. The asset can be anything that can be represented digitally, such as a piece of artwork, a document, or a digital currency.

Blockchain-based tokenisation has a number of advantages over traditional methods of tokenisation.

1. Firstly, it is much more secure, as the asset is stored on a decentralized network of computers rather than in a single location.
2. Secondly, it is much faster, as the transaction can be completed in minutes or even seconds.
3. Finally, it is much more efficient, as there is no need for a third party to verify the transaction. The use of blockchain-based tokenisation is still in its early stages, but it has already been used to tokenize a number of different assets.

In May 2016, the blockchain startup Blockstack launched a platform that allows developers to tokenize app development projects.

In September 2016, the blockchain platform Waves launched a platform that allows users to tokenize any asset, including fiat currencies, commodities, and shares in companies. Whereas the history of tokenisation is long and varied, with references dating back centuries. The process of blockchain selection is a relatively new development, but one that has the potential to revolutionise the way in which assets are traded and managed. Tokenisation has been used in a variety of different contexts, including the sale of physical assets, the management of digital assets, and the transfer of ownership of digital assets.

The impact of asset tokenisation is not just limited to the world of finance. Tokenisation is also having an impact on the world of business, with a growing number of companies looking to tokenise their assets. In 2018, for example, it was reported that BMW was considering tokenising its cars. This would involve creating a digital token that would represent a share in a car. This token could then be traded on a digital platform, just like any other cryptocurrency. Similarly, in 2019, it was reported that the Japanese conglomerate, Softbank, was planning to tokenise its mobile phone business. This would involve creating a digital token that would represent a share in the business. The growing interest in asset tokenisation is not surprising, as it offers a number of advantages. For example, tokenisation can help to reduce fraudulent activity, as well as making it easier to comply with AML and KYC regulations. In addition, tokenisation can also help to improve the efficiency of trading and settlement processes.

The use of blockchain-based tokenisation is still in its early stages, but it has already been used to tokenize a number of different assets. In the future, we can expect to see the use of blockchain-based tokenisation become more widespread, as it offers a number of advantages over traditional methods of tokenisation.

The future of asset tokenisation

The rise of asset tokenisation is set to continue in the years to come. This is because the benefits of asset tokenisation are becoming increasingly well-understood, and the technology is becoming more sophisticated. In particular, the development of ‘smart contracts’ is likely to have a big impact on the future of asset tokenisation. Smart contracts are digital contracts that are stored on a blockchain. They are ‘smart’ because they can automatically enforce the terms of the contract. For example, a smart contract could be used to automatically transfer ownership of a tokenised asset when the contract conditions are met. This could help to streamline the process of trading asset-backed tokens. The use of smart contracts is likely to become more widespread in the years to come, as the technology becomes more refined. This is likely to lead to an increase in the number of assets that are tokenised. In addition, the rise of asset tokenisation is also likely to lead to the development of new types of assets. For example, it is possible that we will see the rise of ‘tokenised securities’ of NFAs, which are digital tokens that represent a share in a company or other asset. Tokenised securities could have a big impact on the world of finance, as they would offer a more efficient way to trade shares and other assets. In addition, tokenised securities could also help to reduce the costs of compliance with regulations. The future of asset tokenisation is looking very bright. The benefits of asset tokenisation are becoming increasingly well-understood, and the technology is becoming more sophisticated. This is likely to lead to a increase in the number of assets that are tokenised, as well as the development of new types of assets.

Remains to be seen!