The tokenisation of real world assets

It may be hard to believe, but soon you could own a few square metres of an apartment in the South of Italy with a group of friends, or perhaps a stake in a collectable classic car, or even better, share a slither of a fraction of the Mona Lisa… The world is becoming increasingly fractionalised everyday, all thanks to tokenisation. If you are like me and have been accused of spending too much money on avocado on toast, and therefore the idea of owning your own homes seems like it may never happen. Well, tokenisation may provide us with the ability to get on the property ladder and shape our own financial destiny. Before we start imaging more possibilities with what a tokenised future could bring us, I want to share what tokens are and why they could be one of the greatest visions of the 21st century.

From someone that has a very high level understanding of web3, NFT’s and crypto, I became increasingly intrigued around the topic of tokenisation and how it actually works. As we know, Web3 is gaining momentum, so as designers, we need to begin to understand the new possibilities that it lends itself. I want to start with a disclaimer that, I am, in no means, an expert in this space and this is not a detailed article into tokens or blockchain technology. I am purely excited about this space, and thought it would be beneficial to share my high-level understanding of tokenisation and how it may impact our future.

Yes, blockchain technology has been around for a while and there is a common attitude towards it that it doesn’t provide a great deal of value… yet. I do believe with all technologies, that they are just one solution to a problem, and with all problems, you must design the solution that is suited to the business and user needs. When we talk about blockchain tokenisation, we’re talking about a fundamental shift in technology and in the way that we live. When all our actions, and assets can be fractionalised, collateralised and create economic value. The shift towards a decentralised internet will have profound implications for the future world. But before we jump in further, I want to disconnect this discussion on tokenisation from cryptocurrencies. I understand they are a point of contention right now, where I can’t even bare to take a look into my stock apps... However, I want to stress that cryptocurrency is just one use case of blockchain technology and tokenisation and there is another whole side to tokenisation.

Okay, so what is the other side of tokenisation? What even is a token?

Well, tokens are becoming increasingly important as part of the move to Web3, as they power the emerging blockchain-based economy. A token is:

• A digital representation of a virtual or physical asset on a blockchain. It can be anything, from physical gold to even intellectual property and/or music.
• A representation of value, rights that can be assigned or exchanged.

They can easily be transformed into value - either currency or intangible value, such as improved efficiency. They can be traded between parties, and in smaller amounts than the whole. Lastly, they show immutable proof of ownership and a record of any changes over the asset’s lifespan.

So, you are probably thinking, how does tokenisation fit into Web3, Metaverse and internet of things?

There are two key takeaways:

• Web3 describes the connection between all computers, people, machines and the linking of their data, and what it can enable is totally new experiences. Concepts like The Internet of Things and the Metaverse, which are currently standalone, will in the future, merge together.
• Blockchain and tokenisation underpin the new digital economy. The best way to think of tokens is as if they are building blocks or Lego pieces, that will enable these new experiences. Tokenisation opens the door to new ways of interacting with customers, where entire industries will become more connected than ever, as Governments and businesses adopt these decentralised models.