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Tokenization Emphasizes the Tangibility of the Blockchain

The world is changing, and so are its fundamental systems. Having possessions is a natural desire inherent in human nature since the beginning of time.

Assets do not only measure the worth of a given individual, but could also be elements of utilities, currencies, commodities and securities depending on the issuer and they protect individuals and organisations from uncertainties.

Traditionally, tangible assets such as real estate, precious metals, artworks etc. could either be sold as a whole, or used as collateral when liquidity is needed in the form of a loan or equity.

Disruption activated

As time passed and innovation improved, erstwhile indivisible assets found a way of being broken down into smaller units.

Co-Founder of Helium, Jason Cassidy says:

“Never before in human history has it been possible to buy into fractional pieces of fine artwork or take a minority stake in and up-and-coming potential basketball star who could be destined for the NBA”.

With the emergence of Blockchain technology, tokenization is quickly becoming a universally convenient method of calibrating and transferring value across markets and the entire financial ecosystem.

Cassidy explains that the fact that real world assets become tokenized in a distributed and secure manner emphasizes how tangible blockchain technology has become.

Acknowledging the significance of the disruptive technology in relation to how assets are now being managed and distributed, Chairman of LDJ Real Estate Fund and member of LAToken’s Advisory Board, David Drake says:

“The secondary and primary markets of fractional ownership of home equity and mortgages are now on the verge of a breakthrough, thanks to cryptocurrency Blockchain smart contracts.”

Something close

Until recently, the closest that asset holding comes to the current disruption is systems run by asset management companies like US based home equity company, Point.

At Point, homeowners can convert their properties into liquid assets and sell them in fractions to willing investors. These fractions remain with their new owners until the contract expires or they are sold in the market. At any point of transaction, the value of these fractions is completely market dependent.

Cadre is an example of a technology-driven institutional real estate company, which offers investors the opportunity of buying into existing properties in parts.

Cadre partners with regular real estate operators in order to offer a form of decentralized market that is open for different levels of investors.

An open market with increased responsibilities

Blockchain tokens in the liquid asset industry is opening up the market even more and enabling the opportunity of simplifying the investment processes, thereby cutting cost and achieving faster delivery.

Cassidy notes that this new paradigm allows virtually anyone to take a stake in a diverse array of assets simply not available previously.

According to Cassidy the liquid asset concept amplified by the blockchain introduces increased freedom and increased responsibility as two undeniable facets of the industry.

He concludes by saying that so long as investors conduct their due diligence regarding these new types of investments they will be able to fully enjoy the newfound freedom blockchain technology has brought to the investment world.


Iyke Aru 2017

Iyke Aru (Leading Writer at CoinTelegraph)



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