Ethereum is a blockchain that creates a digital record of every transactions that then duplicates across thousands of computers. The blockchain technology is changing and advancing rapidly, and has enabled us to trust the ways we transfer and store value. On top of this though, blockchain is unlocking value.
A lot of the worlds assets are illiquid. Liquidity is about getting in and out of assets easily, and lengthy paper processes, complex fee structures and the ownership principles of current markets make exchanging assets for value inefficient, intimidating and often impossible. By tokenising assets on the Ethereum blockchain, it means that ownership can be divided and assets are free to move seamlessly between owners without physically having to move at all.
When you look at real estate for example, investments and ownership have been traditionally reserved for the wealthy. There are a lot of regulations for potential home buyers who are hoping to take out mortgages, and often, sellers are put off by large cuts which happen through the transaction cycle. Renters might not have the liquidity to make a down payment, which means that they are stuck paying a lot of money in rent.
This is the challenge that is being faced and solved through a blockchain platform for shared property ownership. A shared ownership model will empower users and align stakeholder’s incentives to drive the overall asset value.
The tokens can also be applied to energy markets. Grid+ for example is using blockchain technology to wholesale energy markets and facilitate energy trading between users. The world is slowly adapting to blockchain technology and is beginning to see the potential and advantages of having digital assets for everything. This will mean that in time, transactions will become frictionless. Blockchains will commoditise the cost of how society trusts while opening up previously hidden stores of value, in the same way that the internet commoditised communications.
Original Image Source: Pixabay