I was getting my daily hit of Matt Levine’s excellent Money Stuff this morning (subscribe here!). In my favourite blockchain blockchain blockchain section he noted:
But a popular pattern in the crypto/token/blockchain world is that someone will come along and be like “finally, through tokenization, we have invented a way to slice _________ into bits and let people trade the bits.” I always find this a bit confusing. Whatever _________ is, it is safe to say that before the invention of tokenization there was already a way to slice it into bits and let people trade the bits. Slicing things into tradeable bits has been a very hot area of finance for a very long time, and people got pretty good at it. Real estate is a popular target for tokenization, for instance, and I am confused because real estate securitization—not so much mortgage-backed securities but real estate investment trusts—is a thing that has existed for a long time.
https://www.bloomberg.com/opinion/articles/2019-01-30/if-you-want-to-invest-in-pot-buy-pot
I agree with this! We’ve had securitisation before blockchains and tokens. You can chop up the title to a painting and sell it to investors in 1% slices already without blockchains or tokens.
Continue reading “Tokens – Lowering the Barriers to Innovation”