Why Is Tokenization The Future?
As young of a technology as it is, blockchain is all the rage these days, at least in some circles. And while not everything is quite riding on top of it, there is strong evidence that this just may be the future. Many compare it to the evolution of internet. Heck, it’s even called web 3.0, but why and could it really come to be.
Brief Internet History Lesson
When internet first began, it was used in very small circles (military, as you may know). Then, as the development continue and the network web was growing, we started to see small pockets of private companies start to utilize it and even start building on top of it. Netscape was a big thing and websites we mostly boring (sort of like a newspaper on the screen, except you could search easier). In the 80’s nothing moved, colors were limited to red, green, blue, and many things relied on command line works. Machines were giant, space was limited, and getting on the net meant fighting the rest of the family for the phone line (if you were so lucky to have a computer that can do that). This was web 1.0:
In the 90’s technology improved and more of us had PCs. Floppy disks were all the rage and offices started to replace type writers with these magical things. Website designs improved and as more of us got on computers and figured out how to use them, the web grew. I was easier, faster and getting cheaper to get online and join random chat rooms. Online advertising started to pop up (literally) and things started to heat up. Images started to appear but things were still mostly static.
By the new century “.com” became all the rage. Companies and websites were sprouting all over the place. Google released it’s beta version and Myspace emerged. Amazon started selling books online and you could download the latest songs and movies for free (albeit illegally). The big boom (and bust) came and web 2.0 was born. Many companies failed and are thing of this exciting history. But many became behemoths of the corporate world.
At the time progressed, the website design continued to improve, becoming more complex, yet more eye appealing. User experience became important and buttons were easier to find. Audio, video, moving images and backgrounds, all started to come alive. The web was getting bigger, more connected, more interactive, more appealing. Slowly but surely it wasn’t only the techies that were using this thing, it was everyone; from infants to elderly in nursing homes. Tech and interned started to affect every bit of our life… school, work, entertainment, dating, support groups, celebrations, buying, selling, trading, and deliveries. It went from the computers in offices and homes into cars, phones, watches and beyond.
Today, especially TODAY during the global pandemic, it’s impossible to imagine our lives without it. Right?! But back in 1980 and even 1990, many believed that internet is a fad, a phase, a thing that will come to pass.
That was the history of internet, the thing that everyone thought it won’t ever be and yet here we are.
Even Briefer Blockchain History
Approximately 12 years ago, blockchain saw the light of the day. Sure, this wasn’t the first attempt at it, but it was the first attempt that actually made it and was starting to have an ever-growing following. Bitcoin came to be and who knew that it would grow from less than a penny to the price of a really nice, brand new car (soon perhaps, a house or more)?!
Not much later, other blockchains started to emerge and develop, following in its footsteps. Alongside with branching out, we started to see different features that each one was bringing out. Some became privacy centered. Others focused on speed or safety. Yet others, wanted to give the power to build more on top of it. And the race was off!
Twelve years later, nearly everyone on the planet has heard of thing called “blockchain” and “bitcoin”. But the certainty of whether it will survive is still something that many question.
Today, this tech is mostly used (and developed) within tightly knit circles. Although, like ripples in the lake, the circles keep getting bigger and there are more of them. The eco-system is being built and expanded upon before our eyes.
We went from HODLing to farming, to storing, exchanging, swapping, staking, pooling and so much more. Projects and business names went from serious to silly (Yam, Sushi, Pancake…) and the ecosystem continued to grow. The whole new web is being created, web 3.0.
More people started to jump into the space and the crypto market cap grew from approximately $650B to nearly $2T in approximately 4 months and number of people using and investing in blockchain is somewhere around 40–60 million people (kinda hard to tell at the moment). That’s less than 1% of the world population.
Yes, it’s still early… really, really early and while many have doubts that it will remain, I don’t!
While it’s hard for the 12-year old in me to believe, my 40-year old self actually enjoys the history (now). Looking back at things, we can see that EVERY innovation was dismissed as it was being developed and starting to encroach into the current way of things:
- Cars
- Printing press
- Electricity
- Aviation
- Elevators
- Internet
- Online shopping
- Electric vehicles
And the list goes on.
For each of these things, there were many prominent (at the time and mostly men) individuals who claimed that these things will never be. They are unsafe, they will never work, it is a fad and it won’t see the light of the day. Yet, here we are, yet again and ahem…
Aside from history lessons we’ve all received (time and time again) that innovation and technology typically make headway and stay (and evolve continuously), I believe that tokenization is the future (alongside blockchain).
Sure, right now we see tokenization within the tech-specific sectors (online gaming, art, exchange, etc.) but it’s starting to bridge outside of it as well (art, jewelry, collectibles, etc.).
Tokenizing items is becoming easier by the minute and having the digital information and representation protected by (thus far) the only database that is un-hackable (a.k.a. blockchain) is a really big deal. And sure, right now it’s mostly NFT art (predominantly digital), but folks are starting to protect their intellectual property as a whole (books, music, video, etc.) as well as other items of importance.
Like internet and computers, right now it’s a bit challenging, a bit clunky, a bit expensive (can we say HIGH gas prices on Ethereum, right?!) and kinda painful. But once it’s digitized and protected, transfer and transaction makes it super easy.
And all joking aside, we can all agree that paying $100 fee to transfer $2 from account to account is expensive, but to transfer (and settle that transfer) $300,000 or $1M from account to account for $100 instantly (okay, do give it a few seconds / minutes), I think we can all agree is cheap. And you may be thinking,
well, the bank doesn’t charge me $100 to wire money…
Sure, they don’t. They may charge you $20–50 but it will take a few days. And if you try to do it internationally, forget it. It’s $50 for you and $50 for the person getting it. On top of that, it can take up to 2 weeks for that to happen.
And, what if we go beyond just transferring currency? What if we want to transfer say property? Can we talk about the expense of doing that?! Agent alone will be approximately 6% of the price (and that doesn’t count everyone else who wants a chunk). On transferring $1M property, you lose $60,000 right there. Does $100 seem expensive now?
There are simply too many use cases that tokenization solves. It will make business, transactions and ownership simpler, faster, cheaper and safer. And who doesn’t like that? Heck, if you can get just one of those things, you’d likely want it.
Think about it. Traditional banking isn’t really simple, fast, nor cheap. But for vast majority it feels safer to keep money in the bank than in your pocket, right?
For all those reasons, I believe that tokenization is the future. How about you?
