According to CBS Money Watch, most Americans are living paycheck to paycheck and finding ways to juggle their personal finances. Most of us struggle with debt at some point in our lives, but what if instead of managing credit cards, sorting out balance transfers, and applying for personal loans, you could easily liquidate assets using an online token system to quickly gain funding for the things you need? It may sound like a fantasy of the future, but it’s actually happening now.
Unless you’ve been living under a rock, you’ve probably at least heard mention of “blockchain” technology and/or its most famous counterpart, cryptocurrencies like Bitcoin. But what is this technology really all about, and is it possible for blockchain technology to become a primary form of global currency?
Blockchain technology is “set to trigger a revolution in all the institutions concerned with value, including banks, insurance companies, payment processors, energy markets, and so on,” according to Dr. Jemma Green of Forbes. Because blockchain technology enables transparent and secure transactions online, it’s the perfect resource for transferring value for a wide variety of assets over the internet, attracting many different industries. But just how does blockchain create this new level of transactional security and transparency?
Blockchain uses a decentralized, distributed ledger which eliminates security concerns by operating in the public arena. “No single authority can approve transactions or set specific rules to have transactions accepted,” explains Technology Review. The blockchain model requires public verification and network consensus in order to process and accept any transaction, and data is not able to be deleted or changed, only extended, so all transaction histories are on “full display” for the network to see, boosting transparency and, by extension, security.
“The central problem of distributed control is the issue solved by blockchain,” Dr. Green elaborates. “It’s why suddenly a whole host of applications for storing value is emerging… This seemingly small change has finally allowed us to be able to transfer value over the internet without the need for a trusted third party. Trust is implicit and inherent in the technology’s design.”
But up until now, blockchain has only been able to facilitate the transfer of digital assets; real-world assets, like real estate, patents, gold or oil, haven’t been able to be tokenized via the blockchain system. This is one of the main reasons blockchain and cryptocurrency has been slow to be fully adopted and implemented in the mainstream; there’s just no good way to make sure you can redeem value for your tokens.
That’s where TrustToken comes in. They’re the first company making it possible to tokenize real-world assets, offering “liquidity and fractional ownership” and enabling “blockchains to control and transact the $256 trillion worth of real-world assets, which would reshape both the crypto and mainstream economies,” according to their website.
“In order to legitimately tokenize real-world assets, we need a way to establish ownership that’s recognized by both blockchains and legal-financial authorities,” explains TrustToken. “Otherwise, you can’t reliably redeem the asset’s tokens for the underlying asset, and your tokens have little to no legal enforceability, audit trails, or insurance. Without legal penalties to offset misappropriation rewards, the risk of defection will rise with increasing asset tokenization, but creating a legal bridge between blockchains and assets is difficult.”
The TrustToken platform is the first of its kind, ensuring that blockchain-enabled transactions of real-world assets are fully vetted and backed to guarantee their token value. This makes it possible for consumers, investors, and entrepreneurs to exchange and liquidate assets more freely than ever before, and it catapults blockchain technology from the strictly digital realm to the physical world of currency and exchange.
Blockchain’s cryptographic algorithms and its potential to make data simultaneously more secure and more publicly mediated than ever before presents vast opportunities for the tokenization of virtually any asset, especially as legal and financial systems continue to “catch up” to the technology and consumer demand for it. NASDAQ has already been exploring blockchain technology for stock trading, which just goes to show just how serious major markets are getting about the transition to this next big disruptive tech giant.
“Blockchain has the potential for a wide range of applications across all industries that can reduce costs, increase accountability, and promote better outcomes with proper, immutable data,” offers Medium. We couldn’t agree more; blockchain technology may just be poised to take over the world.
What blockchain-enabled technology or industries are you most excited about in 2018? Share your thoughts about the blockchain tech takeover in the comments below.