Bitcoin is so 2017. Cryptosecurities are the new game in town.

Cryptocurrencies, embodied by Bitcoin in the minds of many, had a great year. The Chicago Mercantile Exchange has launched futures on Bitcoin. Goldman Sachs is trading it. Venezuelans, Cypriotes, Zimbabweans use it as an alternative to their mismanaged national currency. Even North Koreans are interested! The eye-popping returns have fueled a bubble which saw everyone and their cousins investing in it.

Sure, bubbles can be damaging when they burst, but they serve a purpose. They educate people on emerging tech. The web is a classic example: the dot com bubble destroyed a lot of economic value, but it put the planet online. As the web underpinned a great share of the economic growth the world enjoyed over the past two decades, all wasn’t lost.

Tech bubbles investors finance the adoption of new technologies outside of geek circles, and that’s what’s happening with Bitcoin today.

But why are people so in love with it? Because it bypasses retails banks and central banks, and provide anyone in the world with a currency accessible from their smartphone. Money from the people and to the people. No need for costly intermediaries, or to trust money grabbing politicians, to transact or store value using national currencies. Bitcoin proves that it can be done, and we’re living now through the joys and pains of the worldwide adoption of cryptocurrencies.

So, what’s coming up next? Bad news is: cryptocurrencies have only a limited number of viable uses cases. There’s no space for many cryptocurrencies, like there’s no space for many Visas or Paypals in this world. Their value derives from the fact that they’re widely accepted, which in turn creates networks effects and winner-take-all situations. It doesn’t mean that Bitcoin will be the winner, like Betamax or Netscape (remember?) were no winners. But there will be a limited number of winners. Sadly, most of the cryptocurrencies out there vying for attention will be dead in a few years, and that’s that.

The blockchain technology and community underpinning cryptocurrencies will quickly move to an adjacent financial business: the issuance and trading of securities, like debt or shares.

Indeed, why go to a bank or VC to finance a company, when one can issue an equity or debt tokens and directly sell it to individual investors? Today, companies looking for financing are left with two unsavory options: either stay private and only access a very limited pool of capital (say HNWIs, Angels or VCs), or go down the IPO route and get fleeced by investment banks, exchanges and audit firms in the process.

The issuance of cryptosecurities is fast emerging as a much-needed alternative to finance companies. In Switzerland for example, companies can already, under certain conditions, issue their own equity tokens, which will provide investors with a revenue sharing and voting right. Such tokens are built on top of the Ethereum blockchain, effectively outsourcing the tasks of maintaining the ownership of tokens or process transaction to an established blockchain. So, it’s like doing an IPO and be listed, but without the having to pay for punitive investment bank or exchanges fees. Quite exciting, right?

We postulate that, as the blockchain ecosystem matures, the issuance of cryptosecurities, in particular equity tokens, will become mainstream in 2018, at least in blockchain-friendly geographies such as Switzerland.

Startups will start issuing them at scale to finance their operations and use them to build a community of users-investors. Even mature companies, not willing (or too small) to pay mind-blowing IPO fees will start issuing their own equity tokens to raise funds. The average investor will get a better deal, and crucially a bigger bang on their buck, compared with buying shares listed on exchanges.

At Token Estate, we’re busy applying equity tokens to one of the biggest asset classes of all: Real Estate. Today, investors do not get as much as they should from their investment dollars in Real Estate. And minimal tickets to invest in Real Estate are too high. So, we’re busy developing a blockchain-based open standard, the Real Estate Token, which will be supported by a web and mobile platform: the Token Estate Marketplace. Real Estate tokens will give their owners a revenue right and a voting right, and cost much less in transaction fees than regular shares.

A Real Estate investment is not something special, in fact it is a commodity. A trial and tested way to preserve’s one wealth in one of the most stable asset class out there. We believe that investors should access it easily and on the cheap, that is on their mobile phone, with no minimal tickets and low transaction fees.

We want Real Estate Tokens to be the investment vehicle of choice to get exposure to Real Estate, from financially sophisticated players to the unbanked in emerging nations.

Coincidentally, by issuing Real Estate backed equity tokens, we will contribute to create one of the most predictable and stable blockchain-based assets out there. If this year’s Bitcoin rise and recent crash is of any value, it teaches us that yeah, people love cryptocurrencies, but they will now need safe stores of value which will do a proper job of preserving wealth over the long term.

The emergence of cryptosecurities, and their associated legal, technical and commercial ecosystem, will the exciting story to follow in 2018.

Stay tuned on www.tokenestate.io !