Why to have in mind tokenised physical assets

In these days of Blockchain and ICO fever, we have to take care more than ever about where we invest our money and our efforts.

As we already know, cryptocurrency investments are very risky due to the intangibility of the proposed solutions by the promoters of the projects, but one of the ways to reduce that risk seems to be tokenised physical assets.

What is a ‘Physical Asset’

A physical asset is an item of economic, commercial or exchange value that has a tangible or material existence. For most businesses, physical assets usually refer to cash, equipment, inventory and properties owned by the business. Physical assets are the opposite of intangible assets, which are non-physical assets such as leases, computer programs or agreements.

So, what we mean when we talk about tokenised physical assets are that kind of cryptocurrencies which value is not represented only by future expectations of a working solution, they are represented by existing assets (physical or not).

If a Blockchain project goes wrong, and it has to end its activity, investors should be able to recover at least part of their money. With non physical assets, as the risk is bigger and the ROI depends on the development of the final product, this is really difficult to happen. Projects which invest in physical assets, permit to withdraw them to money which can be returned to the investors, or even the investors could exchange their tokens for the assets that were backing them.

This approach is followed by some of the projects running right now in the Blockchain ecosystem, like REAL.markets or Climatecoin, 2 of the Blockchain startups I’m currently advising.

Climatecoin is an interesting case of this paradigm. The project is a special kind of sectoral investment fund which applies their expertise in VC and company growth combined with the funding expected to be achieved in their token sale to make promising startups in the climate sector scale and grow to make real impact.

Climatecoin invests in real companies fighting climate change and creating carbon credits which are two valuable assets with high growing expectations, so the security for investors is higher from my point of view.

It’s interesting to see how this projects evolve and can show us if their model finally works. From my side it’s awesome to be working with such group of professionals encouraged to make the world a better place for everybody.

Andreu Rodríguez i Donaire

**** THIS IS AN OPINION ARTICLE AND IT’S NOT INTENDED TO BE AN INVESTING ADVICE, PLEASE BE SURE YOU UNDERSTAND WHAT ARE YOU ACQUIRING AND ASSUME ITS RISKS BEFORE DOING IT ***