Mass Tokenization, Utility & Payments

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20 Dec 2024

The Next Step
The increase in Bitcoin adoption is a two-edged sword. It propels the asset class into the public eye and triggers ongoing adoption. However, with the arrival of MicroStrategy, BlackRock, and others come additional concerns relating to centralization and manipulation. It’s a package deal, there’s no glory void of threats. This is where many Crypto enthusiasts differ regarding their views of recent developments within the space.
I choose to remain realistic. Though recent developments regarding Bitcoin’s integrity and decentralization are not ideal, they are unavoidable. An asset as transformative and revolutionary as Bitcoin cannot remain under the radar forever. The world was destined to wake up. Maturation within the Bitcoin space will eventually lead to a strong shift towards tokenization.
This is the next step in Crypto’s progression. Tokenization needs to be more prevalent. The current level of tokenization is almost insignificant. Its impact on the world and financial markets is minimal. Tokenization extends beyond finance. I have been speaking of the tokenization of everything for years already. However, we are still nowhere near where we need to be.
WEB3, RWA & The Next Chapter
Tokenization plays a significant role in WEB3, specifically, RWA. The lack of development regarding tokenization is primarily why WEB3 is struggling to gain meaningful traction. This area needs acceleration for WEB3 and RWA to enter a position of prominence. Once this occurs, the next significant development will be a high level of interoperability, enabling cross-chain functionality.
This is when the tokenization of everything becomes a system of value. Companies will offer loyalty programs and other incentivized ideas via a tokenized model. This will result in an abundance of tokens across multiple chains with a strong level of interoperability. Essentially, tokens become a new form of value and money. This is one of the reasons why a Bitcoin-based world is an unrealistic expectation.
I agree, that the Lightning Network and other protocols help with scalability and other issues. However, true innovation occurs in projects like Polkadot and other WEB3-centered blockchains. Polkadot is leading the way in interoperability. Parachains are not merely projects within the Polkadot ecosystem but Layer1s in their own right. Furthermore, an already high degree of interoperability is available within the ecosystem.
If tokens become globally acceptable as “money” in an interoperable world, automated swap functionality will exist between different entities. For example, I can use my fuel tokens for a free pizza down the road. Conversion rates decide how many fuel tokens are required, which will then be converted to pizza tokens. Tokenization unlocks a new level and understanding of value.

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Final Thoughts
Large-scale tokenization leads to utility, and utility leads to mass on-chain payments. This is a natural progression. However, tokenization as a concept needs a lot more endorsement and promotion. DePIN is making an impact in this area. Tokens are being earned for driving and the utilization of idle devices. Value is created and imparted in an economy based on contribution and participation. Exciting times ahead! See you next time!

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Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.