Today, blockchains are finding applications in a variety of industries. They are no longer restricted to functioning as a ledger for storing and trading cryptocurrencies. The technology is used extensively for optimizing different supply-chain and documentation processes among other things.
Another sector where blockchain is gaining popularity is the area of tokenization. To understand simply, tokenization is nothing but the conversion of physical or virtual assets such as buildings and business stocks into digital tokens and storing the same on blockchain technology. These tokens denote ownership rights and can be transferred between different users. Many experts proclaim that this type of fragmented ownership has the potential to disrupt traditional industry practices and also help liquidate large or expensive assets with relative ease.
The reason behind many investors prefer to use this form of blockchain-based asset ownership is because of the many advantages attached to it. This is because of the following factors:
Of late, tokenization is finding applications in different fields such as real estate, business, art, commodities trading, and other asset-based industries. Presently, there are several accredited platforms that allow the trade and exchange of tokens is a seamless fashion. Meanwhile, countries such as Singapore, South Korea, and England are taking the lead in embracing this technology.
Types of Token
As tokenization is becoming a commonplace practice, different platforms are emerging to cater to the various sectors. Broadly speaking, there are three types of tokenization platforms:
Tokenization platforms enable the entrepreneur or business to issue tokens to investors. These platforms are protected with end-to-end encryption and are required to adhere to regulations such as KYC and AML. By integrating smart contracts, it is possible to automate the different processes and optimize operations.
Usually, these tokenization platforms are built on existing blockchains such as Ethereum, Quorum, Stellar, Hyperledger and other popular ones. However, it is still possible to develop private blockchain networks and host tokenization platforms on them.
How To Build A Tokenization Platform?
Tokenization Creation Process
Building a tokenization platform is not an easy task. This is a long and time-consuming task that an entrepreneur has to consider different features when developing one. These features have been listed below:
It should be noted that these features are over and above the basic functions such as security, reliability, and functionality. Fortunately, in 2019, it is possible to launch a full-fledged tokenization portal without any hassle. With the presence of different blockchain and cryptocurrency development firms, it is possible to develop and launch meticulous platforms. Often these development firms offer OEM solutions that grant complete ownership status to the platform owner. While a simple Google search will catalog a number of service providers, it is always wise to conduct in-depth research before entering into any commitment.
Tokenization platforms offer a seamless and secure way to sell assets. They do so by focusing on transparency and immutability which help make record-keeping and documentation a breeze. While it is easy to develop a portal with the help of a tokenization platform development company, there are different factors to keep in mind, such as security, functionality and user-friendly features.
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