Tokenization is the process of digitizing and recording or representing something on a blockchain. Obvious examples of things that can be tokenized are assets or physical goods. But that can also extend to ideas, information, and services - think insurance, sports collectibles, real estate or identity records.
Why is tokenization important?
First, an asset that is tokenized benefits from increased market liquidity. This improves price discovery and broadens market access. This is particularly true for assets that traditionally lack liquidity - for example, art and intellectual property. Second, tokenized assets can be transacted very quickly and cheaply. Blockchains enable peer-to-peer transactions, which mitigate the chokepoints and the high fees imposed by traditional intermediaries. No intermediary means fewer costs overall.Third, any transaction of tokenized assets is publicly visible and therefore auditable. Here's the real breakthrough - transparency is built into blockchains by design. You don't have to trust, you can verify. Fourth. tokenization enables us to reclaim ownership of our digital selves from big tech. It puts us in the driver's seat in control of our data, creations, identity and purchases, maximizing user choice, privacy and portability.