Tokenise To Buy, Sell Piece-fully
Anything of value could be divided into several tokens so that the asset becomes accessible to everyone, not just the rich.
Summer vacations are here, and you’re excited that the annual trip you take with your family to a cold destination is only a week away.
But suddenly, something unexpected and unavoidable comes up at work, and you realise this vacation will have to be canned. You’re disappointed.
It pinches you even more because the flight tickets you had booked months in advance are non-refundable, so you watch helplessly as your money goes down the drain.
But what if you could give away the ticket or sell it to someone who needs it, just like you would a concert pass?
Given the current rules and regulations, the idea might sound preposterous, but it’s possible with tokenisation (blockchain). This technology could change the way Indians do business, travel or transact in real estate.
What’s Tokenisation?
Tokenisation is a process of taking something you own — a ticket, an apartment, or a piece of land — and turning it into small digital certificates that are stored on blockchain.
This token is a solid proof of ownership, and it’s easy to sell, transfer, or split an asset into smaller parts without any paperwork.
Take flight tickets, for example.
Instead of the usual process of getting a ticket, you go through a company — let’s call it TechTravel — which runs on blockchain and helps airlines turn flight tickets into digital tokens.
Now, your money won’t go to waste just because you are unable to travel. Once a ticket is tokenised, you can resell it to someone flying on the same route.
TravelX, a blockchain-based travel distribution start-up headquartered in Miami, Florida, has been showing the world for a while how it could be done, using an innovative technology built on Algorand.
In April 2022, Spanish airline Air Europa partnered with TravelX to offer the world’s first series of non-fungible token (NFT) airline tickets: the NFTickets. In March 2023, Flybondi, an Argentinian low-cost airline, also joined the NFTickets bandwagon.
Airlines could also benefit from this technology because when the ownership of a token is transferred, they may charge a fee.
A win-win situation for everyone.
Frying Bigger Fish
Let’s now talk about some bigger problems, such as real estate, and how blockchain could help there.
You are aware of skyrocketing real estate prices and that most people can only dream about owning real estate. Tokenisation can fix this as well.
Here’s an example:
With tokenisation on the blockchain, a commercial property worth Rs 10 crore could be divided into 4,000 tokens of Rs 25,000 each, and you could buy as many tokens as you want depending on your financial capacity.
After that, whatever that piece of property does next, you’re part of it. If its value appreciates, you gain. If it earns a rental income, you get a piece of the pie depending on how many tokens you own. Or, if you want to liquidate it someday, you could sell it like a stock.
On the flip side, if the value of the property goes down, the worth of your pieces would depreciate in the same proportion.
We’re not talking about some fantasy here. RealT, a US-based company, allows investors to buy fractional ownership in properties through tokenisation on the Ethereum blockchain.
The same technology could work for other assets, such as a piece of art, farmland or even an IPL team. Wouldn’t you want to own a piece of your favourite team and earn something while you enjoy the high-octane game?
If you stretch the limits of the technology, even a small shop owner in India could tokenise its inventory and get as many silent partners/investors as he wants.
Final Words
The bottom line is: anything of value could be divided into several tokens so that the asset becomes accessible to everyone, not just the rich.
But tokenisation, like any other system, would need proper rules to ensure fairness, transparency and protect investors.
It’s still early days, but the direction is clear. With the right use, this blockchain-powered technology could become as common as fixed deposits or mutual funds in India.
