What Is Tokenization? Trading and Privacy

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real estate tokenization

Tokenization comes from the English word tokenization. Tokenization is an important part of the blockchain revolution. The entire ecosystem of block chains basically revolves around tokens. Bitcoins and Litecoins, for example, are tokens that we normally refer to as coins or coins. But there is more possible on a blockchain. Your car, your credit card, your identity: everything can be tokenized. In this article, you’ll find answer to the following question: “What is tokenziation?

What is tokenization?

Cryptos like Ethereum, Vechain, Waves and Universes will be able to contribute to the tokenization in the foreseeable future. In theory, various platforms are already able to do this, but of course there is also the legal aspect that must be regulated. Shares on a blockchain, for example, are not yet ‘real’ shares according to the law.

What is tokenization? And why would you want this?

A Bitcoin represents a certain number of euros, so a token on a blockchain can represent a value. You can also have a token for a house or car, but also for, for example, your place of birth or age. We will come back to the latter later, we will first start with the tangible things.

Blockchain, by their basic principles, are an extremely reliable tool to trade and buy things. There is no cheating on the network. Each token is unique and has its own value.

A small practical example of a situation where tokenization can be of value; Physical festival coins can be tampered with. You can spend these coins twice and you can counterfeit them. When you switch to digital coins, or tokens, as a festival instead of coins that you can hold in your hand, you can solve a lot of problems. Tokenizing these coins ensures that each coin can only be spent once and counterfeit coins cannot be accepted. Check this for more details about real estate tokenization at digishares.

Tokens as Commodity

Houses, designer handbags, crates of beer: a lot of our physical assets can theoretically be traded on a blockchain using a token. Let’s take the case of beer with twenty-four bottles as a simple example. If you and three other people want to buy a case of beer, the four of you pay the costs. Because the bottles are easy to grab from the crate, you can easily solve this by paying all four the same amount. What is yours, you take from the crate. Registering every bottle of beer on a blockchain is perhaps a bit of an exaggeration for this situation.

But, what if we are talking about much larger objects? If you want to buy real estate now, there is a lot to consider. A notary, a large bag of money and many other administrative matters must be arranged before you can invest in a beautiful building in your city. Investing in such large projects is of course impossible for the normal person, after all, you cannot immediately grab what belongs to you like with a case of beer. Tokenization ensures that this is possible. For example, if a real estate project costs 300 million euros and 300 million tokens are made available on the market, you can already get in for 1 euro. You buy your ‘piece’ of building via a crypto exchange and the blockchain takes care of the rest here too. Any winnings can be paid out in a crypto currency of your choice.

Tokens in practice

Examples of crypto projects that make good use of tokenization:

We Power, with the help of their token, users can buy and sell green power.

Primalbase, with one Primalbase token you can make unlimited use of Primalbase’s workplaces in different world cities. You can also exchange and rent this token.

GUTS, they want to combat black trade in the card market, among other things, by making each card unique and registering it on their blockchain.

Tokenization, Security and Privacy

In addition to trading certain things on a blockchain, there is another very important branch of tokenization, namely the tokenization of (sensitive) private data. You can also split your identity and determine who knows what about you. Your creditworthiness (for a mortgage, for example), your sexual preference (for Tinder, for example), your blood type (donating blood): you can imagine whether it can be stored encrypted on a blockchain. Only organizations or persons with the correct ‘key’ can access your data in this way. You can think of it as cutting your passport into pieces so that you can only show what someone wants to know. Now you will think: why the hell would I want that? A simple answer: privacy!


A popular item in the news right now is your privacy on the internet. Facebook, Google and other parties inadvertently use and sell your data. The Brave browser ensures that you can monetize your personal data yourself. You can use this browser to determine which data you want to sell to advertisers.

Credit card tokenize

As a final practical example, we focus on privacy and go a step further.

You’ve just eaten a delicious meal at a restaurant in the city you’re on vacation and it’s time to pay. Simply pinning is not an option, so you use your credit card. You give your card to the waitress and she gets to work with it. That’s actually pretty weird: you give someone you don’t know at all the opportunity to check all your credit card details. The staff member has the opportunity to find out everything about you: your name, the expiry date and all other information necessary to use your credit card.

Tokenization offers a solution; Using formulas and secret combinations, your data is stored as tokens on the blockchain. Your identity and belongings have been cut and stored into countless small pieces. Only someone with the right ‘key’ can retrieve and combine the data. The waitress in question does not need all the details from you, in principle the confirmation that you can pay for your food is enough.

When the tokenization continues and you have to pay at a restaurant in the future, you give a temporary ‘key’ to the waitress to check whether you can pay for your food. If you have enough balance, you pay and continue with your day. This is of course all automatic and digital.

Tokenization still in its infancy

You can tell from this article: in practice, tokenization has only just started. Many possible scenarios are perspectives and seem to lie (very) far in the future. But with the speed of current developments, it is only a matter of time before it takes off. In addition to technical obstacles, there are also a lot of legal issues that need to be ironed out before you can sell your house using a blockchain, for example.

Finally, to answer the question “What is tokenization?” To answer succinctly: Tokenization is nothing more than giving tokens on a blockchain a certain value. In this way you can trade more easily and more securely one-on-one with people, without the intervention of other authorities.



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Monday, 27th June 2022
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