Security Tokens and the Future of Asset Ownership
It is no longer a secret that you can own a piece of land, property anywhere or benefit from a fraction of what Messi earns curtesy of tokenization. Owning a fraction of an asset anywhere is becoming a reality. This is set to shape up the destiny of the financial sector.
Security tokens have taken the world by storm and if you are a fan of a leading football team, you will be able to buy their shares in form of tokens on the blockchain. Whether you are crypto holder or still stuck with fiat currency, entry into the tokenized economy is easy.
What Does Tokenization mean to you? 
Very asset in the world has an identity; whether it is your home, car, stocks or shares, they are all tied to your personal identity. Tokenization of assets means they are broken down to fractions and owned by different individuals or parties. To achieve the required tokenization levels, the assets are backed by security tokens.
Simply put, a home worth $10million can be divided into several thousand tokens owned by different investors. Each token will represent a certain percentage of the total value of the home. This means you can earn a fraction of rental proceeds from the home. In this case, the security tokens become your contract.
How Does Tokenization Work?
For illiquid assets to be tokenized, they need to be moved to a blockchain system. Blockchain supported tokens become the digital representation of the real world asset. Once on the decentralized network, tokens can be sold and bough thus creating a tokenized economy.
Depending on the tokenized asset, security tokens become a fraction of the asset value. These are tradeable and work like when you buy shares from a public firm. The only difference is that tokens ride on the blockchain ecosystem.
How Tokenization Benefits the Investor
Improved liquidity is a huge benefit when it comes to tokenization. Once an asset like real estate is tokenized, it is easier for the token holder to cash out part of their shares making the property more liquid.
A tokenized economy opens up the asset market and this leads to fair pricing. It is easy to offer discounts on illiquid assets which brings down the price. Once an asset is sold as fraction of the whole, stakeholders charge fair but competitive prices.
There are no paper transactions where transfer of ownership involves several middlemen. Tokenization automates the entire process and this saves you on time and money. You can convert your tokens anytime, anywhere and within seconds the transaction is complete.
More importantly, anyone can take part on a tokenized economy. You can stake as much as you want or as little as you can afford. It offers an entry point investment avenue for all whether in crypto or fiat. The lock up period is also very short compared to that of illiquid assets.
Lastly, cryptocurrencies are known to be highly risky but the entry of security tokens has increased transparency in the industry. Investors now have confidence in embracing the tokenized economy making it the future of assets ownership.
