A startup says the tokenization of assets represents the next big milestone for blockchain technology – and is creating a platform that’s going to enable individuals and businesses to digitize real-world items.
According to IDA, its infrastructure helps to solve a dilemma facing the world today: an effective link between physical and digital economies. The company says digitizing assets can help strengthen rights of ownership, allow everyone to track resources and prevent waste, and create a tamperproof record of transactions.
In its white paper, the company has set out why this evolution matters. IDA claims that digitized assets are going to become “the new driver” of growth in the global economy – making it easier for goods to circulate and enabling small and medium-sized firms to receive the financing they need.
IDA’s data-driven ecosystem is going to bring together several emerging technologies on to its digitized asset blockchain – including artificial intelligence (AI) and the Internet of Things (IoT), which is “advancing new applications of using sensors to track and gather information from real objects.”
The startup says the advantages for asset digitization are far reaching. For industries, this could unlock new business models and drive innovation by enabling production processes to be automated. The fields of transportation and autonomous vehicles can benefit, as well as academia and education, where IDA says “digitizing intellectual assets has created a strong network effect for knowledge sharing.” It can also have a positive effect at the dinner table, as the digitization of agricultural products – a process already under way – has been seen to improve food safety and enhance the freshness of the produce we buy in supermarkets.
In explaining why it has chosen blockchain technology to pursue asset digitization, IDA says it lowers barriers to entry for businesses and consumers – driving down costs and ensuring the learning curve for ecosystem users isn’t too steep. Blockchain also means assets are easier to identify and track, and removes geographical boundaries.
IDA has unveiled a two-tiered structure for its ecosystem’s tokens. While the primary IDA token “functions as the common platform currency and a bridge with the real world,” secondary MRT tokens represent the digital asset anchored to physical goods, where the exchange of these tokens is tantamount to a change in ownership for the tangible assets they represent.
The startup has already provided an illustration of MRT token in action. Imagine that an investment company owns the timber rights for a section of forest. The corporation would be able to issue MRT tokens for the timber – and the recipients of these tokens would then have ownership rights over a set quantity of timber.
Over time, IDA expects the volume and variety of assets being transacted as MRTs to grow. The company has drawn comparisons between this token and the US dollar, as both are designed to be insulated against direct market volatility – making them “an excellent safe haven for assets and equities.”
To prevent fraud, IDA says it performs due diligence investigations on asset holders who want to have their assets converted into MRT tokens. This involves ensuring that the number of tokens issued reflects the quantity of assets or equities they have. MRT tokens are destroyed whenever tokens are redeemed for the assets they represent.
In October, IDA unveiled an important partnership with Sigfox – enabling the startup to use its IoT applications, which are “easy to use and have global coverage.” The company says the technical support of Sigfox makes IDA unique and more powerful than other asset digitization platforms.
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