Autonomous car
Tokenization of asset value will be one of the most important, if not the most important, social process in the next 20 years. Here is why.
It started with the first practical example of asset value existing purely over the Internet: Bitcoin. Before Bitcoin network and blockchain technology, asset value can hardly exist in the form of software over the Internet. The reason for this comes straight from the economics of information which categorizes goods to rival versus non-rival goods and excludable versus non-excludable goods. A non-rival good can be used by many people at the same time. A non-excludable good is a good that will not be able for the owners to exclude others from consuming [1]
Software as an information package is costly to make and very cheap to reproduce. Information over internet by its nature is non-rival and non-excludable therefore, in that environment, artificial and inefficient methods such as DRM has to be invented to create asset value for information product. Bitcoin network with its clever use of cryptography, linked time-stamping and incentive system invented the first practical system to make information product rival and excludable, hence allowing asset value existing over the internet in a secure and trustless manner. It is a huge technological leap forward with bitcoin as a currency being the first important practical use of the system.
The technology has been tested and embattled over the years and now there are other systems sharing the same roots and core technology such as Ethereum, Dash, Bitshare etc. The total value held collectively by these systems has gone from minuscule to more than 150 billion $ in a short of 8 years. In my opinion, more and more asset values will be created and existed over the Internet via these systems in the coming years because of the systematic benefits in 1)Transparency; 2)Efficiency; 3)Accessibility; 4)Programmability, (see more reasoning at [2]) and also when the method of financing via ICO is better understood and regulated over time. I will also argue that the future of tokenization will be multi-chain since values come in many ways and with different requirements demanding different and conflicting dimensions in architecture design such as Anonymity/Privacy versus Transparency; Efficiency/Scalability versus Trust-lessness; Programmability versus Security. Perhaps there is one chain that can do everything but more likely, the future will be one with multiple big public chains and each chain having an unique technological offering.
In the future, asset value also does not just move from an existing, physical state to a digital representation of a physical state. But new value will be created and tokenized in a totally transformative way. Bitcoin or Ether as a currency is one example. Furthermore, imagine in the future, an autonomous car’s central system with an embedded token chip connects to a public blockchain. Then ownership of the car will not be separated from the ownership of the token. The token will be the car itself which exists over the Internet. The physical state of the car is at one place but the ownership, the right to control and accessibility is globally accessible. Similarly, the same process will happen with houses, robots, company ownership etc. The combination of Internet of Value with Internet of Things will be very exciting in the coming years. The economy of this future will be fully accessible and programmable.
References: