The Harsh Reality of Tokenization
When it comes to fresh innovations and ripe opportunities in the marketplace, there are few that could be placed above tokenizing your business for the blockchain. Despite this opportunity though, there are things holding countless entrepreneurs back from participating in tokenization, including high upfront costs, the immense amount of coding know-how needed, and more. Because of this, many of the individuals who would benefit the most from becoming active on the blockchain are unable to do so.
Here are a handful of those hurdles and how companies like FundersToken are helping to make tokenization more accessible for entrepreneurs everywhere.
The Financial Hurdles
Within the blockchain community, there is a shortage of smart contract developers. Because of this, rates for becoming tokenized are still extremely high, making them out of the reach for a number of budding and established entrepreneurs. In terms of hiring a developer, even if one was to go with a relatively inexpensive freelancer on a platform like Upwork, the bill would more than likely exceed $10,000 just to create and deploy the coin. This isn’t even taking into consideration the costs needed to fix any bugs or polish up the prototype afterward.
The Technical Hurdles
To put it mildly, the amount of knowledge needed for successful tokenization is immense relative to more basic forms of software development someone could pick up from Code Academy or a programming bootcamp. The reason for this is twofold. Firstly, the technology as a whole is still new, even to the cutting edge developers and enthusiasts involved in the crypto community. Secondly, launching a token on the blockchain requires code that is much more sound than a simple iPhone app or Chrome plugin requires because a buggy token or smart contract could cause backers to lose an immense amount of money.
As an analogy, a recall for a smart contract is more akin to a recall on a hardware product, where investors who put money into the project would lose their money in the case of a faulty product. Additionally, a bug within your token may lower the value of the token, potentially causing irreparable damage to your business.
Lastly, many could consider the blockchain to be a “gold rush” of sorts, which has facilitated unscrupulous individuals and entities to try and hack other’s information, coins and more. As a best practice when programming for the blockchain, developers must build their projects with these shady hackers in mind. This is another reason why the coding involved for the blockchain is more taxing compared to other types, adding to the already high number of technical hurdles needed for seamless tokenization.
The Legislative and Logistical Hurdles
There are also other obstacles standing in the way of tokenization created by governments and companies alike. One example is Facebook’s recent decision to ban all advertising for ICOs on their platform. While this may not directly impact the tokenization process, it certainly affects the ability to successfully launch and market a coin, a key component of a healthy blockchain ecosystem.
There are also governments around the world that have cracked down on crypto in the form of airdrop regulations and more. The governments in Nepal, Ecuador, and Morocco have even gone as far to ban the buying of Bitcoin and other cryptocurrencies outright. The SEC in the United States has also implemented stringent regulations on ICOs.
On a final note, the cost of the legal fees needed to protect your coin from government regulations inevitably increases with each new piece of legislation passed, whether in the form of costs for lawyers or mandatory business fees.
The Result & A Look To The Future
Because of the high barriers to entry listed above, many individuals who could benefit the most from entering the blockchain ecosystem (from content creators to small business owners in developing countries) simply don’t have the resources to do so. In order to solve this problem, widespread adoption of the blockchain must take place in order to drive down the costs associated with tokenization. Essentially, the rise of plug-and-play platforms and tokenization-as-a-service businesses that help streamline tokenization need to proliferate, similar to what has happened with the commoditization of website development thanks to platforms like Squarespace.
This is exactly the problem we’re solving here at FundersToken. We believe the opportunities available through the blockchain shouldn’t be reserved only for those with the financial and technical resources to do so. With our platform, we will help supercharge mainstream adoption of the blockchain by enabling entrepreneurs from all walks of life to become tokenized.
We firmly believe that by democratizing blockchain technology, the business world will be in better place than ever before. If you would like to support us and experience the power of smart contracts, then visit us at www.fstk.io to learn more.
FundersToken: DIY your SMART TOKEN, TOKEN WITH LOGIC
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