Tokenization is the process of substituting a tangible or intangible asset with a digital equivalent, for identity, transfer and storage purposes. Tokenization has increasingly become the greatest craze in the IT industry. Because of Bitcoin’s solution to the double-spend problem, the Internet now has the capability to create, link or substitute real-world assets with virtual ones, with the highest security and trust.
Tokenizing assets on the blockchain makes a lot of sense. As all transactions regarding money are increasingly done virtually, it seems the next logical step is that all transactions and transfers other than money happen virtually as well. Tokenization can allow us to transfer real estate, certificates, software, collectables, arts, precious metals, and so on, virtually.
Gold is traditionally known to be a scarce and precious asset. Over the millennia, civilizations have used Gold to account for their wealth, hold it as a reserve and even use it to trade it with strangers. All this was possible only because everyone unanimously believed in the value of Gold, irrespective of who was holding it.