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Security Tokens Bring New Prosperity?

August 20, 2018



Is there a light at the end of the tunnel? Will we see an end to this bear market in the near future? Some Blockchain professionals like Trevor Koverko, who is the CEO of Polymath, believe that security tokens are the answer.


The fact is, as Coindesk’s article on the idea suggests, Koverko is far from isolated in his views. What might be difficult to understand is what they mean by security tokens being the answer. In beginning to understand the significance of this idea, it is important to grasp that there is another way to articulate it.


In effect, these people believe that “tokenized assets are the future of capital markets,” with the Blockchain industry as the key example of this, which brings to mind the question: what exactly is a tokenized asset, given the uncertain regulatory status of the industry at this time?


A multitude of explanations exist on the internet and in printed form on what tokenized assets are and what sort of significance they have in the Blockchain space. Perhaps the best way to sum this up is to say that tokenization of assets means putting the ownership of something real and physical into digital form.


In doing so, it is argued by one industry professional on Medium that the number of tokens that are created to represent this item is arbitrary and up to the users involved to determine.


In connection with defining this, however, there is the matter of why asset tokenization matters to the Blockchain industry as well as how it and security tokens, could possibly be the answer to the industry’s current woes.


Completely delving into these matters would bear a series of pieces, but it is also possible to examine the facts as they are are at this time and make summarized conclusions.


To understand why asset tokenization matters to the industry,  look no further than the major use case of the Blockchain. It was created not just to enable and facilitate the use of Cryptocurrencies, but also to put the storage of data back into the hands of the common man.


Because of this paradigm shift in data storage, we now have asset tokenization as the prime use case that has been spreading Blockchain technology to various industries.


 Think about some of the specific implications of this tokenization for a moment.


It could settle most land disputes. Upon the purchase of a large amount of land, the ownership of this land would be recorded on a Blockchain. Once this happens, because of the nature of the technology, this data becomes immutable.


To begin, it would enable groups to easily own such things in percentages, which would also be public record to avoid any disputes. Secondly, land transfers would most likely be a simple matter of transferring the public and private keys of the Blockchain version of the land to the intended new owner.


When you understand this, you understand clearly that asset tokenization could be said to be the be all and end all of the Blockchain industry. The main issue is that since it is nothing new, the statements by those like Koverko seem to fall flat.



By: BGN Editorial Staff

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