Bridge of trust: how tokenization makes the cryptoworld more tangible
Many are wary and distrustful to anything that has to do with the cryptoworld. Digital money is still perceived as a sham, like a bubble, which can soon burst.
In fact, this is not so. On the contrary, the cryptoworld actively integrates into real life. One of the main factors of this process was the trend towards the tokenization of real assets, that is, the transfer of the value of objects from the real world to the blockchain system (like shares, futures or securities).
Tokenization of assets is expressed in different forms. For example, the trend of 2017 was the ICO’s of projects from the real sector of the economy. The income of investors is also expressed in tokens, but they are backed by assets from the real world. So, the project ZrCoin raised funds for the construction of a plant for the production of silicon dioxide. The price of each ZRC token is tied to the market value of 1 kilogram of this substance.
The second trend is the creation of applications for bidding. One of the main advantages of the blockchain technology is the reliable preservation of data. One type of data is information about the right of ownership. Information about the right to own property and its value is stored in the system, and if the owner decides to sell it, the operation is instantaneous. This does not require any intermediaries or additional procedures. This is very convenient for investors who are offered a fully controlled and safe investment tool that does not know international borders.
Our platform SHIFT.cash, specializing in the field of lending secured by car titles, is also an example of how real assets become part of the digital world and vice versa. All processes in the system are automated, so a person can get a loan online. At the same time, an investor can be a person from anywhere in the world. This became possible due to the tokenization of the collateral, in our case — a personal car. The built-in Big Data processing system automatically estimates the cost of the car, after which this information is stored on the blockchain. As a result, investments of the investor are protected by a smart contract and are backed by a real asset. So, they are protected from risks at different levels. The business model minimizes the risks of the lender directly as an investor, the implementation of transactions on the blockchain system ensures the safe flow of assets in the system and minimizes the risks of fraud.
