6 Sectors Ripe for Tokenisation
The early stages of blockchain’s development focused on how it could be used to create new digital currencies. The Bitcoin blockchain introduced the possibilities of a decentralised store of value that was more secure and did not rely on middlemen — a dream for a generation pulling themselves up from the banker-driven wreckage of the financial crisis.
As the technology has developed, new applications for similar cryptographic tokens have emerged. People realised that they could be used to store any digital asset securely and transfer it quickly to other parties. Utility tokens aren’t cryptocurrencies. They won’t be used to purchase goods or services. Rather, they are stores of value that, crucially, have a functional benefit for the holder. These benefits can vary from the use of computational power to the confirmation of a work of art’s origin.
We’ve run down some of our favourite applications of utility tokens.
Computing Power
Very few of us have access to a supercomputer. For a lot of tasks, though, the average computer either cannot handle the processing power required or will take an age to complete those which are more complex. Machine learning projects, digital rendering, sequencing DNA — these are computationally intensive tasks that could be made much quicker by access to a supercomputer.
This is where companies like Golem and Sonm think blockchain technology can have an impact. Golem calls itself a ‘decentralised supercomputer’, which taps into a global network of unused computing power. When presented with a task, the network automatically finds the best computer available and pairs the two, paying the computer for the power it provides with its own token. For people with powerful computers, it is a way of monetising downtime the machine has. For those with computationally intensive tasks, it is immediate access to a capable machine at a relatively cheap rate.
As a provider, you’re free to set your GNT rental price at whatever you deem is appropriate. Because Golem is a marketplace, these prices should find an equilibrium over time. You’ll also need GNT to submit deposits as a provider and participate in the Application Registry.
Real Estate
There are a number of blockchain-based projects looking to utilise the technology in the real estate industry. One is Propy, an international peer-to-peer marketplace which allows for smoother purchasing of property across borders. Another is here at Primalbase, with our tokenised hot desking and office rental model. Hosted on Waves and Ethereum, one PBT gives the holder access to any of our office locations in tech hubs around the world. Holding four PBT gives the holder access to our private offices, which can be booked in advance.
A Primalbase token is one of the first real examples of utility providing value to the holder. The coin is an asset that can be sold — as more locations are added, too, the token may well increase in value — but also used for the duration of the ownership. Primalbase token holders are essentially granted access to fully-stocked office space in London, Berlin and Amsterdam, while being able to recoup their initial investment at any point should they no longer need the ability to hot desk.
Intellectual Property
The music industry has been very interested in the possibility of registering intellectual property on the blockchain. A host of companies have popped up hoping to cater for the need. Essentially, the goal is to utilise the immutability of blockchain technology to avoid ownership disputes. The owner of the intellectual property — which could be extended to art, trademarks, film, etc. — can be registered when a work is created and this cannot be altered while being spread across every record. Tokens are created to represent intellectual property and can be programmed with features to allow holders to manage and control their IP’s rights and royalties.
This intellectual property could be written into smart contracts, which determine the price others have to pay to use said works, and the compensation itself could be settled automatically without any dispute. Blockchain technology has the potential to facilitate micro-payments on a grand scale, a perfect system for paying royalties. The tremendous potential behind marrying intellectual property and blockchain is the reason companies like Bernstein are creating a cryptographically private digital trail of records.
Further reading: https://link.springer.com/chapter/10.1007%2F978-3-319-94478-4_19
Storage
Like computational power, file storage is something a lot of people often find themselves lacking in. At the same time, a huge amount of digital storage space sits unused in data centres and hard drives around the world. Companies like Filecoin are marrying the two to find mutually beneficial solutions, matching those with excess storage space with those with excess material.
Users can earn Filecoin by hosting files on their unused storage units, which they can then exchange for USD, BTC, ETH, etc. For clients, decentralised storage options offer reliable storage at relatively cheap rates.
Further reading: https://link.springer.com/chapter/10.1007%2F978-3-319-49151-6_6
Bees
When it comes to tokenising real-world assets, there is really no limit to what can be done. We all know, for example, that bees are vital to the survival of a great deal of our food and a significant number of trees. Ensuring their long-term survival is something environmentalists are committed to. And now, perhaps surprisingly, they have an ally in the blockchain community. An Beehive (formerly Apis) token, hosted on the Waves platform, gives the owner the right to an adoption plan of a hive. It is a form of charitable giving with the novelty of blockchain technology to set it apart. It’s an admirable project that taps into blockchain’s ability to send money across the world.
Provenance
For many high-value items, provenance is key. Being able to prove the identity and chain of ownership for a classic car, a piece of art or an antique is the difference between something being worth a lot or a little. Forgeries are everywhere and it can be difficult to validate provenance when most information still lies in paper documents.
Startups like Codex have seen an opportunity. The platform is a blockchain on which provenance can be immutably logged — a one-time verification that is then available to the entire network at the push of a button. Tokens are created to shadow real-world items. In the context of Codex, this is a digital token called a Codex Record, which stores both any information about the item and the ownership records. Serving auction houses and collectors, blockchain-based provenance guarantees are a good example of the technology’s ability to streamline an otherwise arduous process, and companies like Codex are looking to champion it.
