Tokenization ¿?

link

People are mired in their thought process relating to the present circumstances.

Over the years, I put out some pretty bold numbers relating to crypto-assets and digital currency. Part of this relates to the fact we are dealing with something completely in the digital world. This moves much faster than the "world of atoms". Hence, growth rates can get ridiculous as shown by the chatbot situation.

This leads to greater economic productivity. We saw what happened with the Internet. This is a mechanism that has a value that is anyone's guess. What is the Internet worth? It is a question that nobody can come up with an answer.

Is it $50 trillion? $100 trillion? None of us really know.

What is clear that we are dealing with an entity that generates tens of trillions of economic output each year. The amount of commerce tied to this medium keeps growing. We then have to factor the non-monetary components such as information flow and communications.

In short, this is unrivaled.

Here is where things, in my view, can really get crazy. This is about to go parabolic. That is the reason why the numbers can get absolutely insane.

Source

Tokenization Is Value Capture
The act of tokenizing something is capturing the value that is created. It is something that enters into areas that are previously non-monetized.

For example, we discussed the idea of social tokens on a number of occasions. When a company has a large following, what happens when it is tokenized? Suddenly, another layer of value capture is added.

Our present system has two forms of monetization when it comes to companies. There is ownership, i.e. stock, and debt. People who can afford it are able to purchase either asset in hopes of a gain.

But what about the customers/users?

The reality is they are out of luck. As the company becomes more successful, they do not profit. Since their stake is non-monetized, they are left out of any financial progress.

Tokenization can solve this.

If a company adds a token, it could capture the value created by the social aspects tied to the customer base. Here is where we see something radical.

This, however, is only the tip of the iceberg.

Capturing Economies
It is fairly easy to see the correlation to the increase in value of a company and stock price. We can understand how those who are holding the stock find their wealth increased.

What happens when we move the discussion to the economy? How does this change things?

This is an idea that few have really delved into, at least from what I can see. Few are talking about it yet it is the essence of the huge numbers.

If the United States economy goes up 5%, who benefits? Think about that for a second. Where is that captured?

Some might say the stockholders of all the companies profit since the prices should go up. Others might mention how workers benefit from jobs. Businesses are engaging in more activity, which then benefits all could be the claim.

While none of these are wrong, it doesn't really answer the question.

The key here is the fact I might have stake in a company yet I have none in the economy. In fact, nobody does.

When we talk about the "economy", this is an arbitrary concept. It is meant to encapsulate all the economic activity in a particular area. However, when we see metrics such as gross domestic product (GDP), who benefits from a rise in it?

Clearly the answer is nobody. Show me an individual who profited from a higher GDP number. It cannot be done. There is nothing to capture that. Instead, we have to drill down to a lower level and look at businesses, assets, or some other form of value that people actually own.

Nobody owns the economy or the output tied to it.

Tokenization alters this reality.

What if you could tokenize the United States economy and the $27 trillion in economic productivity? Or what if we could do the same for the roughly $100 trillion global economy?

How would things look if we each had stake in that?

Tokenized Network-States
This is exactly what we are referring to when we discuss the idea of the Network-State.

I have opined that we are heading to a world where networks are going to be abundant. Coupled with this, we will see all assets tokenized. Hence, they will reside on these networks. Based upon today's numbers, we have hundreds of trillions in assets, much of it non-liquid. That will change with tokenization.

Once something is tokenized, it becomes tradable and easy to move. This means it can easy be collateralized. This often serves as the basis for global trade. Funding backed by asset value is how we expand economic output. With tokenization, this gets put on steroids.

But again, who benefits (profits) from this?

We can look at it similar to today's system. Many will answer that by having tokens in the projects that explode, the holders gain. That is true. On this point, we can easily see the similarity.

There is another piece that is crucial.

When looking at the economy, nobody has monetized stake in it. With tokenization, we see the situation shift.

If networks are going to be akin to countries, which I believe they will, then holding a base layer coin is a game changer. Here is a way that the value of the economic output is captured. In other words, we are talking about a tradeable assets that monetizes an economy. If this increases, the holders of the coin should see financial gain. This is regardless of whether that individual holds any stake in the individual projects.

This is revolutionary.

It is a concept that will explode once the masses understand what is taking place. Today, there is nothing I can do to get a stake in the economies of Germany, Japan, China, or the United States. Even if I have money to invest, there is nothing from any brokerage firm that trades directly based upon this output. Sure there might be some exotic asset some Wall Street financial institution developed that tries to chart the moves. Even if that exists, it is not directly tied to the economic activity.

This all changes with tokenization. When the "citizens" of a network engage in economic activity, whatever that might be, they are adding some form of value to their holdings (presuming they have the coin). Here is why I continually refer to the phrase "the Hive economy". It is an important notion.

This is where the numbers can get ridiculous. When something is value is capture and put into tradeable form, coupled with ongoing move into the digital realm, we can see how the numbers can get very large.

This is a point that I think most miss about tokenization. It is not about price go up due to Wall Street money flooding in. Instead, we are dealing with a new way to distribute the economic productivity that is generated.

When it happens on these networks, we can see exactly where it goes to.

It is why we can start the conversation in the quadrillions and not be in dreamland. The Internet easily jumped into the tens of trillions without any new monetization capabilities. With tokenization, we not only add monetization, but value capture where it presently is not.

This is revolutionary.