Tokenization is a way to turn real-world items, like art and property, into digital tokens that can be traded on blockchain. It’s a fast-growing trend in the world of finance that promises to add liquidity to markets and expand investment options for individuals.
What is tokenization?
Tokenization is the process of converting rights to an asset into a digital token. Tokenization can be used to represent any asset, including real estate, art and even collectibles.
Tokenization allows you to trade your assets in a decentralized market without having to physically move them around. This means greater liquidity for you as an investor and lower costs associated with selling or buying your assets
Why do you need a tokenized infrastructure?
Tokenization is the process of turning a real-world asset into a digital token that can be traded on blockchain. In other words, it’s the digitization of assets.
The most common examples are tokens issued by cryptocurrency exchanges; these tokens represent ownership in their respective platforms and allow users to trade cryptocurrencies without having to pay fees themselves. However, there are many other types of tokens which hold value in different ways:
- Equity tokens give investors shares in an enterprise or project; they’re similar to equities (shares), but instead of being issued by companies they’re created by startups who want funding from outside sources like crowdfunding platforms like Kickstarter or Indiegogo.*
- Utility tokens provide access rights within their ecosystem–you need them if you want to use certain services within their network.* Security tokens represent equity stakes in companies that offer securities such as stocks, bonds etc.; this means that security token holders receive dividends from profits made by those businesses.* Tokenized fiat currencies (e-dollars) are backed up by real dollars held at banks/financial institutions
How do you build a tokenized infrastructure?
The first step to building a tokenized infrastructure is choosing the right blockchain platform. This can be done using either a blockchain platform or a tokenization platform, depending on your needs.
When deciding what type of infrastructure you want to build and how you want it to work, there are many factors that need to be considered: Who will be using it? How often will they use it? What level of security do they need? Is there any sort of personal data involved? What kind of data storage do you need (e.g., high availability vs low latency)?
These considerations should help guide your decision about which type of infrastructure would best suit your needs–and once this has been decided upon, then comes choosing between using a blockchain platform or one specifically built for tokenization purposes (as I’ll explain below).
What are the tools that make tokenization possible?
The tools that make tokenization possible include blockchain technology, tokenization software, cryptocurrency and smart contracts.
Tokenization means turning digital items, like real estate and art, into digital tokens that can be traded on blockchain.
Tokenization is a process that turns assets into digital tokens. The result is a token, which can be traded on a blockchain.
A tokenized asset represents ownership in an underlying asset or group of assets. It allows you to sell or trade your stake without physically moving the underlying asset, thus making it easier for investors to buy and sell fractional ownership of high-value items like real estate or artwork.
Tokenization also reduces transaction costs since there are no middlemen involved in processing payments between buyers and sellers; instead, all transactions happen directly through smart contracts on the blockchain network itself (e.g., Ethereum).
Tokenization is a new way of thinking about assets and their value. It’s not just about money, but also about things like real estate, art and other types of property. With tokenization, you can turn these things into digital tokens that can be traded on a blockchain network without ever having to leave the comfort of your home or office.