The Future: Tokenizing Businesses
This is a concept that I started to write a bit about a few years back. At that time, it was not clear where things were going. The idea of security tokens was just gaining a bit of exposure. Nevertheless, it was something that I saw as an important step forward.
As with anything in cryptocurrency (technology in general), the benefits will depend upon how things are structured. Unfortunately, the challenge with security tokens is the concept that the regulators are the ones in charge. That is the drawback to the existing system. Instead of protecting the public, they simply keep the existing system in operation. Those that are benefiting are given an even larger leg up.
Cryptocurrency has the ability to change this. Rather than having the "accredited investor" as the one who can benefit, we can structure things in a way where the average person is able to participate. Over time, this would be a path to not only enormous wealth generation but also distribution.
Yesterday, @coyotelation put up a post about a project that is going to take cryptocurrency for the prospect of mining gold. In other words, people will have the opportunity to buy into land that will be used for gold mining.
Now in Brazil, more precisely on the Dois Irmãos farm, in Amazonas, she was chosen to undergo the procedures to become a cryptoproperty in the Ethereum network. All investors will be able to acquire a type of lot and they will be like the owners of that place and all this through a digital asset.
The farm was divided into smaller pieces and altogether we will have 100 million Cryptau (AM1) tokens being represented by property. It means that if you have to buy 1 Cryptau, you will own 1 / 100,000,000 of the farm's property right.
Here we see the idea of tokenization in action. Without having all the details, we are unsure how much each other will go for. Nevertheless, as we can see by the design, fractional ownership is being offered. One Cryptau gives an individual 1/1 millionth of the property rights. This is the epitome of tokenization.
Imagine all the people around the world who could come up with a few dollars for the token. Let us say the project is $5 million (just a guess). This would break down to $5 per token, providing an opportunity for a nice return.
Of course, there are major risks with gold mining and nothing is guaranteed. What is interesting about this project is the fact that it provides the rights to the land. Typically this means that the land can be leased to actual miners who pay a royalty to the land owner. This usually runs between 10%-20% of what they get out of the ground.
This project is used as an example and not as an endorsement of the project.
Imagine being able to own pieces in thousands of different businesses. Obviously, this is possible through the equities markets. However, there are standards and levels of money required to operate there. Also, small businesses cannot meet the requirements to get listed since it is such an expensive process.
Thus, we can see tokenization as a viable avenue where people can invest in smaller entities that provide a nice return. The business owners have access to the capital whereas presently, they are locked out. Their expertise is still used to make the enterprise more valuable while the return is spread to people all over the world.
My view is the ultimate goal is to use this process as automation becomes a bigger part of our world. Tokenized companies that are autonomous is exactly what is needed. The world will not be a very happy place if automation takes over and it is in the hands of a few mega-technology companies. Under these circumstances, automation will only create a dystopian future.
The key is to offer equality in opportunity. With what we see established so far, the world of cryptocurrency has few requirements. As long as there is some type of smart device and an internet connection, all are welcomed. Any individual can start building by participating in different platforms, ones that start to reward for activities undertaken.
Here we see the first step in wealth accumulation. Getting some money together is always needed. Being rewarded for playing a game, as an example, could be the seed money needed to invest in a gold mining operation in Brazil. From here, the payoff couple be rather nice.
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Real estate can obviously offer tremendous opportunities. In fact, it is one of the most discussed areas pertaining to security tokens. Of course, when this is brought up, it is usually multi-million dollar projects.
While those can hold potential, perhaps all that is needed for a solid return is to invest in a duplex in Des Moines. Imagine being able to take some of your rewards from the Hive blockchain and putting it to work in an investment such as this. That could provide a solid return for decades.
Moving into other areas that are not exotic yet can be very lucrative.
Here is a question: have you ever negotiated with a plumber? The answer is likely no. It seems when a plumber is called, things are all backed up. Most just want the problem fixed, not really concerned about saving a few dollars. It is no wonder that we rarely see plumbing companies going out of business.
How would you like to own a piece of a plumbing company? Again, wouldn't it be great to take some of the rewards from Hive (or any blockchain) and have a piece of a small plumbing company somewhere. I would imagine that could provide steady returns.
Or we could go a bit more futuristic and look at the robo-taxis Elon Musk is trying to set up. His vision is to give each Tesla owner the option of turning the vehicle into a working asset. Through the autonomous driving capability, each car could end up generating revenue.
How about putting together a token that enables a Tesla to be purchased and operate in this capacity? This could be done after the car is bought by the owner or as a way of funding the acquisition. Ultimately, since each Tesla is a business, an individual might be able to buy pieces in many different cars around the world.
Cryptocurrency offers the opportunity to create new business structures. This will certainly help deal with many of the wealth distribution problems that exist today. Of course, that will not happen if we allow a digitized version of our present economy to form. This is what the existing powers are trying to do.
I said in a recent video that our answer to the power grabs by governments and big business is to go wide. We need to spread ourselves out in many different directions. Elimination of the single point of entry is vital. This means that we operate on a smaller scale, focusing upon those assets that are overlooked by the regulators and governments of the world.
After all, the SEC is not looking at some farm in Brazil as a project to go after. Yet, if we can do a few million of these projects around the world, the regulators will have little choice in the matter. By that time it is too late.
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Posted Using LeoFinance
