Development and progress are impossible without change. As times change, so do how assets and property, tangible and intellectual, are handled. Rapidly developing digital technologies, in particular, blockchain, are confidently pushing the traditional stock market into the past, clearing the way for tokenization or, to put it simply, the digitization of property.

Most often, they digitize securities, turning them into crypto-assets in the form of tokenized shares. Tokenization is a powerful tool for businesses that can make them more modern, accessible, and secure.

This article will look at the tokenization process in detail, understand its advantages and disadvantages, and help you decide whether to invest in tokenized assets right now.

What is tokenization?

To understand tokenization, you need to understand what blockchain and tokens are. So, let's get started.

Blockchain is a decentralized data registry where participants exchange data through secure channels. Blockchain collects and integrates transaction data through cloud services. The data is divided into common blocks, and the blocks are linked together by unique identifiers called cryptographic hash functions. The data in the blockchain is protected from duplication, compromise, manipulation, and fraud. They can only be changed by direct mutual consent of the parties.

If an attempt is made to change the data, all participants will be notified immediately who did it and when. The exceptional level of transaction security and transparency has allowed blockchain to revolutionize the modern economy.

Token - The same as a stock on a stock exchange, only in the digital space.

Even more simply, it's like a token in a casino, amusement park, or subway. It's a digital certificate that secures a company's obligations to its owner. Tickets can be used to obtain goods, services, or equity in the company that issued the tokens. Tokens are bought for real money, but they only work within the host project and have a real market value.

Tokenization - launching business tokens, transferring tangible (real estate, finance) or intellectual (works of art, inventions) values into tokens.

The simplest example of tokenization is NFT or non-interchangeable tokens that secure the rights of ownership of an art object. However, this is not only true for art but also business, so many use pci dss tokenization requirements https://www.verygoodsecurity.com/blog/posts/tokenization-and-pci-compliance-everything-you-need-to-know