The Tokenization Model And The Functionality Of Tokens

Before blockchain technology, consumers were generating economic output on behalf of large corporations. Thus, every Snap or Tweet generated profits for the companies providing those services, and often, consumers saw no economic value in this model. On the contrary, it is believed that the blockchain can revolutionize the global economy and enable market participants and corporations to derive economic value from the services they provide. 

Tokenization is making a difference 

Blockchain technology has shifted the paradigm and has created a different dimension to the global economy. The model proposed by distributed ledgers is called “asset tokenization” and it goes against the extractive nature of the existing economy where you must live and consume in the same geographical space as many corporations. Blockchain knows no borders and by tokenizing assets, the user can buy or sell freely without the need of a strict legal framework and institutions. The tokenization model offers a cost and time-efficient way to “traditional” processes of transacting assets. Thus, tokenization makes ownership more inclusive. 

Tokenization has been embraced by lots of different industries, from agriculture to sports, mainly because the model democratizes access to investment opportunities and gives a fair chance to consumers. Following this model, PumaPay is looking at reinventing daily payments by using their own token, PMA. The idea is to create an advanced billing infrastructure for businesses, so merchants can design flexible payment frameworks. 

The token revolution 

Tokens have been used for a variety of purposes so far. There has been negative feedback on how this model would lead to the hyper tokenization of services which will result in failures as plenty of services do not need tokenization. However, PumaPay proposes a variety of solutions to monthly subscriptions that the consumers are using. At the same time, a purchase on the blockchain with the token guarantees anonymity without having to deal with the traditional bank statement of your detailed history of transactions. This is something most traditional credit card companies are having trouble with – ensuring privacy when transacting. 

In short, tokens help create decentralized networks and bring in the best characteristics of open proprietary networks. Moreover, tokens give an incentive to people and represent a modern adjacent solution to our traditional payment system. With the PumaPay token and ecosystem your everyday payments will be reinvented as more and more providers are added to their list and you can enjoy the privacy of transactions and access services that have not been available previously. 

Blockchain technology is seen as the Holy Grail of the modern economy because it can disrupt the investment industry by removing the middlemen, and can set the grounds for an efficient and transparent market. Particularly, the tokenization model that the blockchain technology proposes, is definitely going to change the way we think and act. But in a world of possibilities, anything can happen and the tokenized economy could possibly pave the way to a whole new world of alternatives. 

Like what you read? Let us know in the comments section. 

    Hayden P.

    A blockchain and cryptocurrency enthusiast

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