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Why tokenization is a disruptive technology for the global economy
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Why tokenization is a disruptive technology for the global economy

Let's think about how decentralization, tokenization, and Web 3.0 will change the global economy and all areas of our lives.

Soon the global economy and Internet services as we know them will change dramatically. What will be the difference? We now live in a Web 2.0 world that is mostly centralized. The next stage will be Web 3.0, which will decentralize all areas, the widespread use of blockchain, distributed registry, artificial intelligence, and machine learning. This article looks at how decentralization and other modern technologies are changing the global tokenization economy and why this is important.

What will the tokenized world of the future look like?

As part of Web 3.0, all assets worldwide will be gradually tokenized, and their data will be stored in distributed registries. This will open up many opportunities for their fragmentation, sharing, and almost instantaneous transfer of ownership to other people anywhere in the world, without intermediaries. The whole world will be tokenized. This is happening right now, gradually penetrating deeper and deeper into the global economy. Just as computers were invented once and people moved from storing data in paper folders to databases, soon, all data will move to decentralized registries.

Some examples of the tokenized world can already be observed. For example, creator tokens allow people to show support for various content creators. Another example is NFTs, which are used to transfer rights and authenticate tokenized art, both digital and physical. Also, tokenization allows the implementation of the scenario of fractional ownership of real estate, enabling thousands of investors to become owners of properties around the world and make a profit. All these are scenarios already being implemented by the Stobox team for their customers. We will see even more use cases for tokenization in the coming years.

How tokenization improves data integrity 

To understand how tokenization can quickly change social and business interactions, we can look at the case of iPhone development. The first iPhone was released in 2007, and the apps available in minimal numbers then are very different from what we have today. Few could imagine that in 2022, the number of applications will grow to 2 million, and they will be available to billions of people worldwide.

Today, we perform many actions from our smartphones through applications: banking programs, instant messengers, video viewing applications, etc. This ubiquitous use of applications has led to a significant increase in user-generated content in Web 2.0. In the next generation, websites and applications will provide greater data integrity. In practice, all the information you will receive from the Internet will be more consistent and with a clear source of origin. Ultimately, each user will receive the most reliable information.

Tokenization will be a natural extension of this process. Web 3.0 is based on a decentralized structure, which will allow the representation of all areas of the economy, finance, and other areas in distributed registries. A distributed ledger cannot be hacked, and its information cannot be faked, so all data will be authentic, with the ability to track its source. The tokenized economy of tokens pegged to real-world assets will also develop.

The tokenization economy will provide additional benefits, such as increased liquidity for all asset classes, reduced transaction costs, and reduced processing time. Decentralized registries will be used to define new rules for transferring rights to assets and establishing value, becoming the basis of subsequent economic relationships.

tokenization economy

Various use cases for tokenization economy now and in the future

Various types of tokens for the token economy are already being used to prove ownership and verify transactions. The year 2021 saw a boom in NFTs, primarily used as digitized ownership of artworks. Non-fungible tokens have quickly evolved into a vast, trusted marketplace where collectors, artists, musicians, illustrators, and other creative class members can sell, buy, and claim ownership of various objects using unique digital identifiers on the blockchain.

Related: How to monetize art with NFT: all there is to know

In the field of finance, tokens are also used now. Banks issue stablecoins for instant international transfers. This is another example of how decentralization will change the global tokenization economy in the future. Moving financial transactions to distributed ledgers allows millions of people to make cross-border payments faster and cheaper.

STOs are gaining popularity right now, and we are holding security token offerings for our clients in various industries. The tokenization of classic financial instruments such as stocks and bonds will also increase liquidity and transparency in the traditional capital markets. A much larger number of investors will be able to participate in security token offerings, buying tokenized shares and earning income while being fully protected from a legal point of view. Also, tokenization increases the availability of investments through fractional ownership because one token (equal to some part of a share) can cost $500 or even less. This opens up opportunities for millions of retail investors with little capital.

In the field of entertainment and arts, creator tokens for the token economy are used as a means of interaction between content authors and their followers. Thanks to such tokens, users can access unique content and personalized services.

All scenarios listed above are real now. Going forward, they will provide the ground for the tokenization economy to flourish. Tokens for the token economy will be implemented everywhere to guarantee trust, increase the liquidity of traditionally illiquid assets, and new options for financial integration, transforming entire markets and industries, from real estate to natural resources.

Full integration of the tokenization economy

Right now, law firms, investment funds, non-governmental organizations, financial companies, and businesses from other fields are exploring options for issuing and selling their tokens. Asset tokenization significantly speeds up the interaction between parties, fundamentally changing the processes between market makers and intermediaries.

Of course, an STO alone will not be enough to create a full-fledged tokenization economy. It also requires exchanges, wallets, regulators, auditors, and other elements integrated with each other and make up a whole ecosystem. Distributed ledger technology will support the market, allowing all participants to easily incorporate into the tokenized economy.

Related: Why the best time to conduct tokenization is today?

Summary 

Right now, we are taking the first steps into a new era of the Web 3.0 Internet, one of the foundations of which is decentralization. Soon the tokenization of assets will cover all sectors of the economy and entire industries. Together, new technologies will significantly change existing business processes, providing greater liquidity, transparency, speed, and low cost of transactions through the blockchain. The investment market is already undergoing a renaissance thanks to STOs and the ability to raise capital from investors worldwide much cheaper and easier than traditional financial markets. Don’t miss your chance to integrate into the tokenization economy before your competitors do! Learn more about asset tokenization at a free consultation with our experts.

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