The idealogy behind tokenizing bitcoin is pretty much simple and self-explanatory. For instance, you lock let's say BTC through some apparatus, mint tokens on another network, and then use the BTC minted as a token on that network. Interestingly, each token on the other network represents a specific amount of bitcoin. This makes it programmable - just like any other token on Ethereum.
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Tokenization is the "Creation of natively digital tokenized representations of traditional (and emerging) assets that are released, traded, and managed on a blockchain. It can be used to reduce friction, and management of traditional assets such as securities, merchandise, and real estate assets.
Cryptoassets that are tokenized editions of traditional assets could also fit well within the existing regulative uncertainty surrounding newer crypto-assets. Tokenization of traditional assets could also help increase liquidity, systemize rules and regulations, and increase transparency throughout the asset lifestyle.
The staying power of many crypto-assets will be defined by their ability to reduce strife and inefficiencies that currently exist within the global economy. Volatility is widely mentioned as a significant limitation for the use of crypto for any use case. While volatility is undoubtedly a problem, it is vital to recognize that these assets are still fairly immature and will become less volatile as they underway across the industry for the creation of what is called Stablecoins to address the volatility problem.
Advancing the tokenized economy
Cryptoassets may change the financial services landscape significantly with the emergence of the tokenized economy. While it is still in its infant stages and it is hard to fathom what will happen in the next ten years. The tokenized economy will likely be one of the more impactful innovations enabled by crypto.
Alongside a wave of interest from the establishment of popular crypto-assets, such as Bitcoin, there has been an increasing market focus on tokenization. Crypto products and services are already starting to pivot, and the global financial ecosystem is also commencement to retool itself for the tokenized economy.
To see a list of examples of cryptocurrencies in the market please visit Coinmarketcap or Coingeckor.
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