Tokenization, also known as tokenization, is a method of protecting sensitive data by expressing it with different values.
What is Tokenization?
Tokenization means that a product or service data becomes more secure by converting it to different values. It can also be expressed as a method of separating and storing data into smaller parts. Said data is tokenized by character, words.
Tokenization can also be defined as the adaptation of an existing business model to the blockchain. Tokenization in cryptocurrencies is expressed as a method applied to store related crypto asset data on the blockchain. Tokenization can be done in different ways, such as word, character or subword encryption. Each form of tokenization has advantages and disadvantages. The most suitable tokenization method is determined according to the area to be used.
Tokenization method is used in many areas. As an example of these; Mobile applications, games, real estate investment, asset management, contracts and contracts can be given. Sensitive data is secured with the tokenization method.
Tokenization on Blockchain
Due to the decentralized nature of the blockchain, the tokenization method is one of the building blocks of the blockchain ecosystem. The most important reason for the application of this method is that there is no need for a third person to approve the transactions.
The tokenization method is realized by integrating different types of financial assets on the blockchain. In this way, the ownership of the data processed with the tokenization method is protected more securely. The need for a third party, which exists in traditional finance, is eliminated when the transaction is processed. In short, transactions can be carried out quickly and safely without notary and intermediary costs. For this reason, tokenization is a must for the decentralized ecosystem.
Every asset can be tokenized. What is required for the tokenization method is that each ecosystem has its own token. An example of this is buying Ether to take advantage of the Ethereum service. A secure cycle is provided by a network of cryptocurrencies and a token of these networks. Tokenization is characterized as a powerful and promising method for securing sensitive data. It is expected that the usage areas will become widespread in the future.
Benefits of Tokenization
The Tokenization method provides a more secure protection of the ownership right of the processed data. In addition, it allows transactions to be carried out securely without the need for an intermediary. In addition, tokenization can pave the way for a new business model and enable existing industries to operate on the blockchain.
When investing in a financial asset, the tokenization method ensures that the investment is made by purchasing tokens. As a result, with the tokenization method, non-crypto-asset financial assets also gain ownership and decentralization. Financial transactions are also more secure.
