Tokenization: Trend or Industry Changer?
While many news outlets are busy tackling the issue of data security and personal privacy, a new brand of developers and entrepreneurs concern themselves with a relatively new idea that impacts data security and privacy but also has far-reaching implications for the future of digital transactions, commerce, and data transfers.
This is a press release provided by ShareRing
Tokenization, the trendy name given to this new methodology, is based on the capabilities of the blockchain and the rapid, well-documented rise of cryptocurrencies and other digital assets.
While some digital assets function more like commodities, others can facilitate the financial and data transactions of entire industries. This seems to be the real possibility of the blockchain. It can disrupt and reorient whole sectors through tokenization and decentralization.
Tech juggernaut, IBM, has invested heavily in blockchain technology, and their CEO, Ginni Rometty, is unequivocally bullish on its impact on enterprise initiatives. She writes, “What the internet did for communications blockchain will do for digital transactions.” In addition, in its 2018 Joint Economic Report, the U.S. Congress offered high praise for the blockchain and its ability to support tokenized industries. The report concluded, “So far, the technology has proven largely resistant to hacking, and…blockchain has many more potential applications, such as portable medical records and securing the critical financial and energy infrastructure…”
Indeed, the blockchain is technologically capable and fundamentally dynamic enough to accommodate a variety of industries and their tokenization requirements.
Based on a unique blend of unbridled ambition, tech sensibility, and the potential of the next-big-thing, new tokenization initiatives are springing up everywhere. More specifically, the sharing economy represents a unique case study in industry tokenization. As a new business void of established practices and entrenched norms, it’s coming of age is enjoying a tandem rise with the proliferation of the blockchain.
The Sharing Economy: The New Normal
In some ways, the sharing economy has its roots in the most rudimentary elements of the economy. Its concept is simple: people who own things can monetize that ownership by lending it to other people or by selling their time and skills to those who require them. However, it’s taken on new meaning in the wake of the 2008 financial crisis. With lingering unemployment and few prospects for a better future, younger generations took to the tech space to develop new methodologies for earning money.
As a result, companies like Uber, Airbnb, and Lyft began gaining traction, and the new economy was born. Today, the sharing economy is on its way to becoming a $335 billion industry, and nearly ¾ of Americans have participated in this dynamic new economic model.
It’s new, it’s burgeoning, and it’s ready for the next level. Tokenization is the path forward.
The Benefits of Tokenization
Easy, Secure Payments
The sharing economy is predicated on payments, and tokenization makes digital transactions simple and secure. Since the blockchain was first developed as the accounting backbone for digital currencies, it stands to reason that it is also an excellent tool for processing payments in the sharing economy as well.
ShareRing, a blockchain-based platform that brings many different sharing economy services together in a single app, allows users to make quick, secure digital payments right from their app. Using their native digital currency, users can pay for services directly on the mobile app. Since the platform is housed on the blockchain, those records are unchangeable, auditable, and private.
When companies tokenize their services, they ensure that users can easily participate in the sharing economy.
The sharing economy is powered by great technology, and the blockchain keeps that technology secure. There is no shortage of examples of productive companies that were undermined by egregious and devastating hacks.
The blockchain’s decentralized nature means that many of the most common attacks like phishing scans and DDoS attacks are rendered useless. Because these require a centralized server to be effective, they are made useless by the spread of information on the blockchain. Unless attackers can simultaneously attack hundreds or thousands of computers around the world, these approaches are ineffective.
By tokenizing the sharing economy, companies can ensure that their platforms stay safe and productive.
Many of the same features that make the blockchain secure also make it more reliable. If there is an outage in one area, the rest of the network is not affected. Since the sharing economy requires immediacy and reliability, this is a significant asset for companies willing to invest in the blockchain.
For instance, tokenized enterprises will never lose customers because their network is down, they will never be impacted by events that are out of their control, and their customers will never be delayed in acquiring the goods or services that they so desperately desire. It’s a win-win for everyone, and that’s the fundamental promise of the blockchain. It enables the best possible customer experience, which means that companies or entire industries will flourish.
The benefits of tokenization are not limited to the sharing economy, and broader adoption will further enhance its capabilities.
Image via ShareRing
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