NFT, for you and me? Tokenization of Things has arrived

Another day, another buzzword is rolling through the streets of the Internet, creating more sets of flashy headlines.

Which buzzword? The NFT (Non-fungible token) is the latest craze.

The technical side of this is as simple as taking a digital asset - image, music, text, object - and applying a digital signature (hash) to it. This creates a token and this token appends it to other signatures which were created before. Now you’ve got a blockchain. You might have heard something similar in the context of Bitcoin or similar concepts.

The token represents the proof of ownership of that particular digital asset. However it doesn't guarantee that there are no other copies of the same digital asset. You can still take the same image, create 1,000 copies and for each copy create a new token. It also doesn't mean that when buying a tokenized digital asset, the seller is the rights holder to it.

Introducing a new term, attaching famous names to it and associating with large sums of money is a marketing dream for anyone who wants to cash in on this trend. But is there a substance to this or just a passing fad?

With NFT, you could buy the first Tweet, the first YouTube video, a piece of music by Lil Pump, artwork by Beeple or an NBA card of Lebron James. As with any collectible, the value is in the eyes of the buyer. Remember the Beanie Babies? At one point buying/selling activities of Beanie Babies added up to 10% of all sales on eBay. So, it may be a passing fad, but there is money to be made, either way.

Tokenization is one part of the overall picture of what's called Digital Transformation. We are in stage when underlying infrastructure is being defined and built. Standards are being created. Use cases are tested.

The ToT (Tokenization of Things) is a natural progression of the IoT (Internet of Things).

IoT created a flood of new data. That data is captured, stored, analyzed and sometimes even used for something useful. In the latter stage of the hype cycle, IoT is morphing industries from manufacturing, transportation, agriculture and many others to make them more efficient, while saving costs and resources.

The same thing will happen with Tokenization. Inefficient industries like banking, real estate and insurance, or governments will be able to distribute their products and provide services faster. They’ll do so with higher transparency and maybe one day with accuracy and no delays. Our phones (the anachronic term associated with the little computer in our pockets) where Siri and Cortana live will negotiate our car insurance on our behalf, make investments, pay taxes or pay for an article in a newspaper.

Sooner than you might think, the hype over ToT will die down a bit, but the usefulness of the technology will remain, making our life easier and more enjoyable.

And that’s the recurrent pattern.