Technology has been revolutionizing the world since the stone age. From using simple tools to solve simple problems all the way to the modern age, which is driven by the quest to monetize data and information via internet platforms—all of this has shaped the story of mankind one way or another.
Yet, even with such advanced technologies, problems continue to crop up. As such, the drive to find more innovative solutions for technologically manufactured problems has risen over the years. New industries and markets have been built on such foundations.
So, when the internet emerged in the 20th century, many saw opportunities. But those opportunities also created an endless list of new challenges including cybersecurity issues, the privacy of information, and internet fraud, among others. This called for a more dynamic concept to find lasting solutions.
Enter distributed ledger technology and decentralization
The digital economy has evolved over the last ten years as more technologies emerged to disrupt the space. Blockchain technology, which has emerged as one of the most disruptive products in the modern era, has played a crucial role towards realizing the dream of a free and secure economic zone. A marketplace that runs on a highly encrypted infrastructural platform. This new marketplace also operates independently from any centralized authority.
This is what inspired the emergence of the cryptocurrency market with bitcoin being at the forefront of everything. However, over the last few years, startups have coined more innovative products with a view to disrupting several industries. This drive has given the rise to what now is being dubbed “the tokenized economy”.
So, what really is the tokenized economy, and does it make economic sense?
The simple answer to that question is that the tokenized economy is a decentralized marketplace which has attracted the attention of investors from all walks of life. And, of course, it makes perfect economic sense. But to make things clearer, it would be good to discuss this deeper.
Generally, when the discussion about the tokenized economy crops up, most people think of tokenized assets like real estate, oil, and various commodities. But this does not represent the whole concept of the tokenized economy. It is just the tip of a giant iceberg.
The more elaborative way to think about the tokenized economy would be trying to imagine the way startups are trying to democratize traditional marketplaces using blockchain. By talking about marketplaces rather than assets, the narrative covers roughly every idea about tokenization that anyone could think of.
As such, when Tiberius Group announced that it was launching a metals-backed altcoin early this year dubbed T-Coin, this means that the company is looking to tokenize the specific metals market it is targeting with the coin.
Early this year, Venezuela also announced the launch of an oil-backed token dubbed EL-Petro, which again seeks to tokenize the oil market. So, it is all knitting up together nicely towards the formation of tokenized marketplaces using tangible assets like oil and metals, which makes the economics for this sensible and feasible.
But what about tokenizing service industries?
The service industry has increasingly become reliant on technology over the last few decades. And with the emergence of the internet, everything has pretty much gone digital. Just to mention but a few examples the news is digital, and so is the entertainment industry.
Video streaming companies like Netflix Inc. (NASDAQ:NFLX) have benefited from this paradigm shift while the likes of Spotify (SPTF) continue to capitalize on the growing music streaming industry. But these companies could soon face the wrath of one of the biggest disruptive forces in the market, blockchain.
Startups like inmusik.co are already plotting how to disrupt the music industry using blockchain, and according to developments in the tokenized markets, the industry appears to be ready for it. The inmusik.co cryptocurrency (Sound Coin) has been created to bring parity in an industry that has been wrecked by content piracy, flawed user and artist reward systems, and a lot of spammy ads.
According to Variety, illegal streaming and downloads of TV shows and music increased in 2017. Nearly 107 billion illegal Tv streams took place last year while pirated music streams amounted to 73.9 billion. If these were to be quantified in monetary terms, we could be talking of billions of dollars in potential revenue for the copyright owners.
The Sound Coin seeks to reward music fans for verifying ownership and the performers of newly added music. Fans will also receive a percentage of earnings by helping artists reach successful milestones. In addition, the inmusik.co coin also seeks to bring transparency in the music industry by providing a platform that gives the industry players a single currency to allow distribution of payouts, which automatically includes all creatives and professionals in the value chain.
These, among other features popular in the cryptocurrency market, are some of the selling points that back the tokenization of the service industry. For all we know, TV could be next while there are already planned tokenization projects for the public transport market, the talent acquisition market, and many more.
Conclusion
Several startups now view the services sector as a major marketplace that offers a massive opportunity to blockchain-centric companies to disrupt. Altcoins like SteemIt (STEEM), Basic Attention Token (BAT (LON:BATS)) and SALT by SALT Lending are already gaining popularity in the market with their distinctive product offerings. Sound Coin and many other service-focused altcoins could join them soon.
Author disclosure: Trading cryptocurrencies or investing in ICOs involves huge risk. This is not an endorsement to invest in or trade any of the cryptocurrencies or stocks mentioned in this article. I have no positions in currencies and stocks mentioned.