We are living in rapidly changing times. The influence of technology on our lives is increasing day by day, in both scale and scope. Not only are more of our daily activities, and systems we rely on, being redefined by technology; each such breakthrough is also becoming more powerful and transformative. One of the most exciting innovations of recent times, with the potential to transform our world in ways that we are only scratching the surface of so far, is digital tokenization.
While cryptocurrencies have hogged the headlines in recent months, I believe tokenization is an even bigger story, when it comes to Blockchain related innovations. A digital token can be a unique identifier for any physical or digital asset. It allows data to be saved as randomly generated characters, which is worthless to a fraudster, without decryption. Let’s look at some exciting and unprecedented possibilities this opens up:
- Complete accountability
The digital token can be embedded with the legal rights, as well as responsibilities, of the person or organization it is issued to. At the same time, it also holds a record of ownership, which cannot be tampered with. So, in effect, tokenization enables complete transparency of transactions, without any need for an intermediary or a third-party verification.
- Compatibility with any type of asset
Digital tokens can stand in for tangible assets – like a piece of land, or a vehicle; intangible assets – such as a patent, or copyright; and fungible assets – which covers virtually anything traded on a commodities market.
- Part ownership – lowering barriers to investment
Because tokens can be used to sub-divide the value of an asset to any degree, they can be used to dramatically lower the value of minimum investment amounts. This is not just great news for investors with a limited amount of money; it opens up a fantastic new source of financial backing for businesses of any size, looking to attract investment.
- A new model for the patronage of art, innovations, and social initiatives
Digital tokenization can take crowdfunding to the next level, in terms of impact and effectiveness. Historically, artists and innovators have often had to depend on wealthy patrons, for support; but this has the major drawback of undermining opportunities for new aesthetics, and unprecedented breakthroughs. The same limitation applies to social initiatives that are considered fringe, by the mainstream. Tokens can democratize patronage of such ideas virtually overnight, accelerating evolution in these areas.
- Employee ‘stock’ options, for any size of business
Giving employees a piece of the pie is one way that many major companies have incentivized productivity, and the participation of their workforce, in the growth of the business. This has not been an option for smaller and medium-sized businesses, in the past. Digital tokenization can open the door for all businesses to give employees a stake through part ownership, leading to a more socially conscious model of capitalism.
A breakthrough that could supercharge the economy of the future
Perhaps the most staggering thing about the possibilities that digital tokenization unlocks, is that the ones listed above are just a small fraction of the innovations it is likely to result in. As a society, we have become accustomed to dramatic change, every few years. Yet, most of us have a sense that our world is on the verge of an era that will overshadow any previous growth enabled by technology. Carbon-free energy breakthroughs, from nuclear fusion to green hydrogen, are finally almost ready for commercialization. AI will soon be part of everything we do, helping us make informed decisions and be at our most productive. Automation, from nano to mega in scale, will make our environment and infrastructure inherently ‘smart’. But the economic impact of these innovations – and more – will only be realized to its full extent; if there is an easy, quick, and totally reliable means to exchange value, which gives all sections of society an accessible way to be part of this growth.
For maybe the first time in history, digital tokenization will allow us to end the monopolies that capitalism seems to always result in, without resorting to the sort of socialism that makes the individual a slave to an inflexible social system. It wouldn’t be an exaggeration to claim that it’s the right technology, at the right time in human history. While many other tech-enabled innovations will change the way we get things done, tokenization will transform how the fruits of this empowered new world are made available, for the prosperity of all.
