Asset tokenization is a true game changer. Why? Because, at long last, it gives the 99% the opportunity to invest in the kinds of high-quality assets that were once the preserve of the super-wealthy 1%. Here’s how.
The technical part: What tokenization is and how it works
Asset tokenization is the process of converting rights, or a unit of asset ownership, into a digital representation on a blockchain. Or, put simply, it’s the process of creating digital versions of physical assets.
Tokens rely on smart contracts, which are trading contracts that execute automatically on a blockchain when certain specified conditions are met.
When you purchase digital tokens representing an asset, the ownership transaction is recorded on a blockchain. This means it’s guaranteed that no single authority can erase or change your ownership. Essentially, your ownership of that asset is immutable. Importantly, tokenization makes it possible for investors to purchase tiny fractions of an asset – dramatically lowering the cost barrier to entry.
From bonds, commodities and real estate, to race horses, artwork and classic cars, almost any asset has the ability to be tokenized. Including precious metals.
An example: Tokenized precious metals
Wealth99’s tokenized precious metals are a perfect example of how tokenization can be used to democratise wealth.
Wealth99 was one of the first companies in the world to create tokenized versions of gold, silver, and platinum. Each precious metal token is fully backed by one ounce of highest quality gold, silver or platinum – stored in the vaults of one of the world’s most reputable bullion houses. The matching tokens are stored securely in clients’ personal wallets on the Wealth99 exchange, and are fully redeemable whenever they wish to sell.
Before, the standard form of gold available to investors was a one kilo bar – at a cost of as much as $60,000. But because Wealth99’s precious metals are tokenized, investors can choose to buy just a fraction of an ounce – with investments starting from as little as £500.
This makes precious metals more accessible than ever before, and gives far more people the ability to protect their wealth by safely and securely investing in gold, silver, and platinum.
Removing barriers: Buying and selling made easy.
Fractional ownership is just one benefit of tokenization. Because it’s all done digitally, tokenization makes the buying and selling of real-world assets far easier than it’s ever been before.
Wealth99’s tokenized precious metals is another great example of this in action. Before tokenization, buying and storing precious metals was a logistical challenge – not to mention expensive. Transporting heavy, valuable items is costly, and storage at home poses a major security risk.
With Wealth99’s tokenized precious metals, the entire process is taken care of digitally via the Wealth99 exchange. Buying and selling is easy and intuitive, just like a DIY share exchange. The transaction is immediate, safe and secure. All without the logistical headaches involved with transporting and storing physical metals.
Asset tokenization comes with a whole wealth of benefits, which we’ll be exploring in more detail on the Wealth99 blog. So stay tuned to find out more about the exciting world of tokenization and alternative assets.
If you haven’t already, sign up to join us at Wealth99.
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