Blockchain development for asset tokenization at iTizzi Software Development Company, Kyiv, Odesa, Ukraine. You can tokenize anything!

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Its original design, created over a decade ago, was intended to serve the bitcoin cryptocurrency. Nowadays, blockchain is also intended for many other purposes, and more and more applications continue to appear. Today, its development in Eastern Europe is most often used to tokenize assets. What is a token and a blockchain, and what can actually be tokenized?

Token Definition – Useful Payment Features

The token is not a cryptocurrency, but it is also a digital asset with no physical form. However, what distinguishes these two concepts is that the cryptocurrency plays the role of a digital coin, while the token is valuable, it can function like money, but not only. For this reason, tokens are divided into: service, investment and payment.

Tokenization and digitization of businesses and companies

The concept of tokenization is a form of business digitization by creating both cryptocurrencies and tokens used in the economy. Here, the token acts as digital ownership of, for example, real estate, people, or assets. Thus, it replaces the traditionally used registries.

With this approach, the token is a digital bearer of value that can represent almost anything – a work of art, gold, or real estate. The only limitation is our imagination. Thus, investments are not about “investing in tokens”, but about what the token is (the specific value that the token itself carries).

Thus, tokenization is the transfer of the value of real assets to the digital world. For this, the blockchain technology is used, which is discussed in this article. It is she who ensures the safety of the values ​​”hidden” behind the tokens.

Tokens – like digital property rights – cannot be copied, but only transferred, that is, traded on an exchange. Tokenization provides one very important advantage: it allows digital assets to be listed on exchanges from around the world based on blockchain technology. Thus, it facilitates online trading without the need to submit paper contracts for the purchase of real estate or company shares. Instead of paper, a token plays the role of a document. As a result, the asset trading process is much more efficient, cheaper and faster than the traditional way.

What can be tokenized?

Almost everything – all types of assets, for example, works of art, products, ideas, precious metals, real estate, company stocks. The most frequently selected areas covered by blockchain tokenization include:

Alcohol tokenization was carried out by Ernest & Young (EY) in 2019. The company has created a blockchain-based asset tokenization platform that authenticates wine. Each token represents a bottle of quality wine. In addition, it gives the buyer an insight into its history and origins. Thus, the development of blockchain software has eliminated the risk of wine counterfeiting as each bottle has its own identifier. Effect? The buyer has a 100% guarantee that the drink is authentic and meets high standards.

The popularity of real estate tokenization is also growing, because then it is a fast, safe and transparent process without intermediaries. The deal goes through quickly and does not create financial barriers to entry for investors with less capital. How does this happen? Real estate tokenization is carried out as a result of issuing tokens on the blockchain, and then they are assigned to specific real estate (existing or still under construction). Sometimes, tokens are also of interest in buying real estate.

Blockchain and tokenization

National Securities Registers are traditional registries that are institutions of public trust. However, they have some disadvantages, such as: slow operation, high risk of errors (human error), high cost and problematic use of their services. The way to get rid of these inconveniences is to transfer registers to the blockchain. It perfectly replaces typical formal actions, for example, related to a change in the name of a company or its registration.

As you can see, blockchain has many advantages for implementation in Ukraine with iTizzi:

Provides more possibilities than traditional solutions, incl. allows you to control and operate with digital property rights. This eliminates the need to involve a government agency to verify the authenticity of the transaction. Its work is based on a peer-to-peer network. This is a peer-to-peer network without a central administrator. As a result, all users have the same rights and every transaction is authentic and transparent.

Blockchain is an intensively developing technology that provides users with many interesting opportunities. Therefore, its popularity continues to grow, especially in the context of asset tokenization. Tokens as carriers of digital value have countless applications, and tokenization in a distributed ledger provides exceptional convenience, speed and security. What’s more, compared to traditional tools, it is much cheaper to use.