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Can Tokenization of Asset Bring More Investment From the Masses

Tokenization of assets isn’t a new phenomenon, but unlike the waves in the past STOs, this time, it might tip the balance in favour of decentralized finance.

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In a new article, Coindesk has predicted that the Cryptocurrency’s DeFi sector is set to see a resurgence of Security Token Offerings (STOs) and has predicted “a sixfold increase in the total dollars raised using such funding methods over the next four years.”

Tokenization of assets isn’t a new phenomenon, but unlike the waves in the past STOs, this time, it might tip the balance in favour of decentralized finance. The article further predicted that “more private companies will bypass traditional initial public offerings (IPO) and instead use blockchain technology to digitize the capital-raising process.”

Although traditional capital markets and venture capital firms have ceded some prime money-making to DeFi, doing away with conventional IPOs might be a significant first step to democratizing venture financing.

Past the debacle of early blockchain ICOs, where the process by which a company ICOs was easy, but the lack of related regulations within the US and abroad around ICOs had led to many fraudulent crowd sales, illegal airdrops, and outright scams. This, in turn, had tarnished the reputation of blockchain-based projects. However, tokenizing assets and either fiat-backed or cryptocurrency backed by gold and silver have dramatically increased confidence in the crypto-asset markets.

The tokenization of assets that represents a real tradable asset, in reality, is quite similar to the process of securitization. An STO, with increasing frequency, is also used to describe a share in a company, ownership of a piece of real estate, or participation in an investment fund. These security tokens are also tradeable on secondary markets.

The new token economy offers to open up the investment world making it more transparent, efficient, and fair. The simplicity of tokenization will also help in reducing the friction surrounding the creation, purchase, and sale of securities.

In addition, it will bring several advantages for both buyers and sellers that will include:

1. Increased Liquidity of the Market:

The tokenization of illiquid assets in private hands, specifically art, real estate, and the likes, will significantly boost the market’s liquidity. Not only will it make it possible to liquidate the illiquid assets partially, but the ability to trade the security tokens in the secondary markets will also increase the trading activity bringing with it a broader base of traders and investors.

The “liquidity premium” alone makes it worthwhile to tokenize illiquid assets capturing more excellent value for the underlying assets.

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2. Making Transactions Faster and Cheaper:

The intelligent contracts attached with the tokens and their automated execution upon the meeting of coded terms in the smart contract will mean automation and lack of administration of much cheaper transactions. The buying and selling of the security tokens will require lesser intermediaries, faster deal execution and lower transactional fees.

3. Increased Transparency:

Since a security token is also essentially a smart contract, it can be embedded with the owner’s responsibility and rights. The fact that records on a blockchain are immutable searches, provenance and trading history would be a cinch. The entire chain of ownership rights, responsibility, and origin of the security token will be entirely transparent.

4. Greater Accessibility:

Most importantly, tokenization could open up the investment world to a large audience. The high liquidity, market movement, lower investment amounts, and shorter periods required to hold the token can make the token economy to the average investor. Like the ticket divides an illiquid asset, the tokens themselves are readily divisible into smaller and smaller fractions enabling even a small investor to participate in the token economy.

With automated workflows and cheaper and cheaper processing costs, and token administration, the minimum investment amounts will fall further. This will also increase liquidity allowing investors to hold the investments for shorter periods before cashing in. The trading is made even more robust due to secondary markets that operate 24/7.

5. Easier Asset Conversion:

With the DeFi market making the conversion of crypto assets into fiat currency more readily available, the same will become true for security tokens. By providing greater liquidity to an average investor that often shies away from investment into illiquid assets due to fear of the lengthy process of conversion of an illiquid asset into a liquid one.

If anything, the strong emergence and success of the DeFi market have shown us that making finance decentralized, transparent, and easily accessible will bring in more investors, not less, and lead to the market’s democratization.

In conclusion, the advent of a token economy will lead to a more transparent, liquid, accessible, and just financial and investment system that will serve more and more people via financial products and investment opportunities for all.

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Blockchain

Digital Identity Theft and Blockchain Solutions

It is in this landscape that solutions like blockchain technology come to the forefront, offering innovative ways to protect sensitive data.

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Everything A Novice Bitcoin Trader Should Know for Successful Trading

In the modern digital landscape, where virtually every aspect of our lives is intertwined with the internet, the threat of digital identity theft has become a prominent concern. Cybercriminals are constantly devising new methods to exploit vulnerabilities and gain unauthorized access to personal information, leading to devastating consequences for victims.

However, emerging technologies such as blockchain offer promising solutions to safeguard personal data and mitigate the risks associated with identity theft. So, if you are looking for a reliable trading platform, you may consider visiting the Altrix Sync App.

1. The Rising Threat of Identity Theft in the Digital Age

The advent of the internet has revolutionized the way we communicate, work, and conduct transactions. With this digital revolution, however, comes the lurking threat of identity theft. Cybercriminals, equipped with sophisticated tools and techniques, exploit security loopholes to steal personal information for malicious purposes.

From financial fraud to unauthorized access to accounts, the consequences of identity theft can be financially and emotionally crippling for individuals. It is in this landscape that solutions like blockchain technology come to the forefront, offering innovative ways to protect sensitive data.

2. The Role of Blockchain in Personal Data Protection

Enter blockchain technology, a decentralized and transparent digital ledger that has gained immense popularity beyond its original association with cryptocurrencies. Blockchain’s inherent characteristics hold the potential to revolutionize personal data protection.

Unlike traditional centralized databases that are vulnerable to single points of failure and hacking, blockchain operates on a distributed network of computers, making it exceedingly difficult for hackers to compromise the integrity of stored data.

This technology utilizes advanced encryption and consensus mechanisms to ensure that data stored within the blockchain remains tamper-proof and resistant to unauthorized modifications.

3. Decentralization: A Key Pillar of Security

One of the primary attributes that make blockchain an effective solution against identity theft is its decentralization. Unlike centralized systems, where a single breach can expose a vast amount of sensitive information, data stored on a blockchain is fragmented and distributed across the network.

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Each piece of information is cryptographically linked, creating an interconnected chain of blocks that forms the digital ledger. This not only makes it practically impossible for hackers to alter information without detection but also reduces the attractiveness of centralized targets for cybercriminals.

4. Immutable Records and Data Consistency

The immutability of blockchain records is another compelling aspect that contributes to its efficacy in preventing identity theft. Once data is recorded on a blockchain, it becomes nearly impossible to alter or delete. Every transaction or piece of data is time-stamped and linked to the previous transaction, creating a chronological chain of events.

This feature ensures that any unauthorized attempt to modify or manipulate data would require consensus from the majority of participants within the network, making nefarious activities highly improbable.

5. Enhancing User Control Through Self-Sovereign Identity

Self-sovereign identity is an emerging concept that puts users in control of their personal information. Traditional systems often require individuals to share sensitive data with third parties, increasing the risk of exposure to potential breaches.

Blockchain-based self-sovereign identity allows users to retain ownership of their personal information and share only the necessary attributes when required. This reduces the attack surface for hackers, as they would need to breach multiple points to gain access to complete information.

6. The Promise of Zero-Knowledge Proofs

Zero-knowledge proofs are cryptographic techniques that enable the verification of information without revealing the actual data. This technology can be leveraged to prove the authenticity of personal information without divulging sensitive details.

For instance, if a user needs to prove their age to access a service, a zero-knowledge proof can be used to verify their age without disclosing the exact birthdate. This innovation enhances privacy while enabling secure interactions, minimizing the risk of exposing personal information to potential threats.

7. The Crucial Role of Education and Adoption

While blockchain technology holds immense potential in safeguarding personal data, its effectiveness relies on widespread adoption and proper understanding. Users must be educated about the importance of maintaining digital hygiene, employing robust security practices, and embracing blockchain solutions to protect their identities.

Organizations, too, should consider integrating blockchain-based data protection measures into their operations to fortify their security infrastructure.

Conclusion

In a world where personal information is increasingly valuable and susceptible to theft, the development of blockchain technology offers a beacon of hope. Its decentralized nature, immutability, and innovative cryptographic features make it a formidable tool in the fight against digital identity theft.

As individuals become more aware of the threats they face and the solutions available to them, the potential for a safer digital ecosystem becomes all the more tangible.

By embracing blockchain and technologies like it, individuals can reclaim control over their digital identities and establish a stronger defense against the ever-evolving landscape of cyber threats.

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