Asset Tokenization: Understanding The New Global ‘Token Taxonomy Framework’ by TTI
If you are still confuse about the Blockchain and Smart Contracts, sorry I can’t help you with this article. You can check elsewhere.
The Token Taxonomy Initiative recently released the token standard framework for a global tokenized asset economy. Asset tokenization is no longer new but still a buzz-word in our world with the advent of the blockchain technology made possible by the creation of Bitcoin with a release of its whitepaper in October 2008. For those that don’t really know what blockchain asset tokenization means, it is the breaking down of assets into smaller bits for easy use or transfers via an exchange. I already covered what you need to know about tokenization in my previous post, read here ( https://medium.com/@justcharleso/why-your-organisation-needs-to-tokenize-their-tradeable-assets-using-blockchain-40e1a04df32e)
So what is the TTF all about?
“Tokens have the potential to disrupt global economics and radically change how commerce will be transacted. The Token Taxonomy Initiative’s framework defines a standard taxonomy making it easier for all to create tokens to serve their respective business use cases,” - EEA Executive Director Ron Resnick.
The Token Taxonomy Framework is a global industry standard guide put together by the Token Taxonomy Initiative made up mostly by the Enterprise Enthereum Alliance Members; The Enterprise Ethereum Alliance is a member-driven standards organization whose charter is to develop open, blockchain specifications that drive harmonization and interoperability for businesses and consumers worldwide.
This framework serves as a guide for common concepts to be used by businesses, software developers/technical and regulatory participators to have a uniform understanding and flow of terms regarding asset tokenization using a standard that will allow interoperability among blockchains. The frame covers specifications on Bonds, Emoney, Document, Licenced-Diploma, Reward, Loyalty Point, Original Arts and so on. With this framework, business people only need to describe the kind of token they want and developers can easily check the required back-end format/standard to use in development. This also helps standardize token creation among different blockchains.
Where and how you can start from
First, you have to come to a conclusion on how beneficial the asset you’re to tokenize will be to your business or end-goal looking at the pros and cons. If you still have doubts about the use-cases of Blockchain or Distributed Ledger Technology, you can check out this document; Distributed Ledger Technology; Use-Cases.
After that, you can look through the Framework if you are a developer or go through the draft specification library as a business person/regulator. This will give you an idea of how to start and develop the project to conform to the global standard.
What Blockchain or DLT to use
The answer lies in the kind of project you are working on and the target users. If a Private/Permissioned blockchain will do or a Public/Permission-less blockchain. Most Enterprise makes use of Private/Permissioned blockchain client from a well tested Public/Permission-less blockchain like Ethereum. Also, you don’t need to build your own blockchain from scratch as there are solutions on-ground that take care of the Peer2Peer communication between nodes, storage, different consensus options to pick from, security and so on. With this, enterprises or Organisations can concentrate on building the business logic of their application and token economy.
Conclusion
Asset tokenization has come to stay and applying the right token framework is important for a long-run market-relevance strategy. I will conclude with the words of David Treat, global blockchain lead at Accenture, and vice-chairman of the Board of the EEA;
“The Token Taxonomy Framework is an important next step in enabling a technology-independent, open ecosystem of innovation across enterprise use cases. As a founding EEA member, Accenture is proud to be part of this important initiative. We look forward to collaborating with the other EEA members and helping organizations to identify opportunities to use this technology to drive real business transformation,”
Charles is a blockchain solution architect, full-stack developer with over twelve years of experience in application development, product management development, and running several startup ideas. Passionate about great ideas that have “Proof of concept” and scalability. #Fitfam gym dude and enjoys swimming when he is not working, in a bar, cooking, playing ping-pong or snooker.
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