The Most Compelling Use Cases for Tokenization

9th May 2019 Off By binary
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As real-world assets increasingly become tokenized they’ll become more accessible, and there will be greater ease of trade and increased efficiency.

The tokenization of assets provides asset managers with the opportunity to diversify investment opportunities in both traditional financial markets and emerging cryptocurrency markets.

Tokenizing real-world assets is a challenging problem requiring innovative solutions that go beyond technology. In some cases, this will require legal reform, and in other cases, it will involve clever combinations of existing legal rules, new business structures, and new digitization standards.

Digital tokens can be to assets what bank accounts are to money and the year 2017 was just the beginning. As many people and countries begin to appreciate digital tokens backed by real assets, it’s clear that many assets will become tokenized.

Photo by Clint Adair on Unsplash

A good example is what’s happening now, where some governments are starting to create cryptocurrencies backed by oil, fiat, or other assets.

1. Blockchain for Artists

Your painting may be in Pitcairn Island or artwork auctioning in the heart of Christie’s — New York.

You may be an unknown artist or the world most famous like Van Gogh, Picasso, and Warhol. You may be painting the next Salvator Mundi or the seller like Dmitry Rybolovlev. The problem is the security of your artwork and the procedure of art auction.

How to make it more interesting & amazing?

We need to think one step forward! Let’s democratize the art market — Art on the Blockchain. This methodology makes availability for non-conventional art collectors and directly creating the new market for sellers globally. Leverage the art using encoding, encryption on the decentralized network for the global marketplace.

Yes, the marketplace is decentralized.

And Buy/Sell with Cryptocurrency!

Simply, Blockchain to store artwork images in digital format on the ledger. Because Blockchain is based on security, immutability & encryption. These characteristics are fundamental for the art auction use case; by perfectly secure the art using Blockchain digital certificates.

2. Blockchain for Real Estate

A tokenized real estate asset is a building or property that issues tokens (digital shares) when someone invests in it with cryptocurrency.

Suppose there’s a $300,000 apartment.

Tokenization can transform this apartment into 300,000 tokens (the number is totally arbitrary, we could have issued 3 million tokens), where each token represents a 0.001% share of the apartment.

We can then issue the token on a platform supporting smart contracts, for example on Ethereum, so the tokens can be freely bought and sold by people on different exchanges.

When you buy one token, you own 0.001% of the asset. If you buy 150,000 tokens, you own 50% of the asset. And if you were to buy all 300,000 tokens, you then own 100% of the asset. But obviously, you’re not becoming a legal owner of the property.

Because Blockchain is an immutable public ledger it ensures that once you buy tokens, nobody can “erase” your ownership, even if it’s not registered in a government-run registry. So we can take an asset, tokenize it, and create a digital representation of it that lives on the Blockchain.

3. Blockchain for Auto Insurance

Auto insurance is one of the most affected sectors by insurance fraud. In an innovative approach using the Blockchain, this POC aims to secure auto insurance by submitting a digital signature. Tokenized conventional currency with cryptocurrency.

Deliver registration document certification. The insurer generates an address containing the registration information and signs in. Proofs — insurance certification is stored into the Blockchain. And a QR — Code containing the insurance registration information and address verification is delivered. So, the signature and the validity of the insurance can be checked within the Blockchain.

The benefits will be a breakthrough in the market. Reducing costs significantly, Insurance proofs based on Maths, Immutability of the certification.

Then — Anyone can scan a car to check if it is insured.

We at Go4 Blockchain, are helping our clients by providing full scale and full cycle consultancy, advisory, strategy, research and development types of services to unlocking the potential of businesses with the power of Blockchain. — Muhammad Ahsan Khan, Founder & CEO — Go4 Blockchain


The Most Compelling Use Cases for Tokenization was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.

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