Tokenization: Spell it with me… E-M-B-L-E-M-V-A-U-L-T
A community-written thought experiment as it relates to Circuits of Value and Emblem Vault revolving around the idea of the “tokenization of anything”
Tokenization, when applied to data security, is the process of substituting a sensitive data element with a non-sensitive equivalent, referred to as a token, that has no extrinsic or exploitable meaning or value. The token is a reference that maps back to the sensitive data through a tokenization system.
Said my British Google Home Mini as I continued to try to wrap my head around the valuation of the technologies behind Emblem Vault and Circuits of Value (COVAL), unravelling more about the main value proposition for the product.
I learn that tokenization is a concept as old as digitalization. The security of data has always been the center of attention as financial services began to adopt digital services in the 1970’s.
Basically, any sensitive information that you wish to transfer becomes a series of random numbers and letters. That alphanumeric string is then passed through cryptographic functions to create a token (sound familiar?). The sensitive information that you enter (or create) into the process of tokenization is essentially limitless — data or digital assets. Let’s name a few: Financial information, credit cards, hospital records (hello Mission-R!), digital real estate, real real estate, money, Cryptokitties.
So where does tokenization and blockchain intersect?
Let’s look at the some of the above examples as case-studies:
Blockchain technology can facilitate such an infrastructure in the form of a decentralised marketplace where the access to health data is under the control of the individual. Information seekers can post their query and individuals can remain anonymous and decide whether or not they want to share their data. With the tokens in a Blockchain-based marketplace, a reward can be automatically transferred on the basis of a digital contract once the data has been delivered. Such a system has a clear advantage over a fiat currencybased system where always a middleman has to be involved and the large population of unbanked individuals cannot participate. In [the figure above] the token economy of the Health Information Traceability platform is presented. A payment and utility token facilitates transactions of health information. Information seekers acquire tokens to incentivise individuals to digitise and share their data, while individuals can: a) redeem bonuses/ services that are offered by service providers on the platform; b) trade it for another cryptocurrency; or c) exchange it for cash at designated exchanges. Individuals can also monetise their data that is stored in external repositories and share revenues with the information holders such as personal health records, claims processing companies, hospitals and pharmacies. The central asset to be exchanged in the HIT-ecosystem is information that has a token value attached to it. The token value depends on how much the network participant values the information in question.
RealT sells real estate property through the internet, allowing real estate to be purchased from nearly anywhere in the world. RealT properties are fractionalizable, so suitable investors can invest any amount that fits their needs. Additionally, RealT has reduced the time to purchase real estate from a minimum of 30 days and numerous steps with third parties, to just 30 minutes and on your phone or computer.With tokenization, real estate investments can be made affordable to nearly anyone. A single token for RealT properties costs between $50 — $150 per token, which are the lowest investment minimums the real estate industry is able to offer. Traditional pen+paper competitors to RealT have $5,000–10,000 investment minimums.
Money —
Digital [money] is a form of currency that is available only in digital or electronic form, and not in physical form. It is also called digital money, electronic money, electronic currency, or cyber cash.
Digital currencies are currencies that are only accessible with computers or mobile phones, as they only exist in electronic form.
Since digital currencies require no intermediary, they are often the cheapest method to trade currencies.
All cryptocurrencies are digital currencies, but not all digital currencies are crypto.
Digital currencies are stable and are traded with the markets, whereas cryptocurrencies are traded via consumer sentiment and psychological triggers in price movement.
Say you want to sell some of your personal data — for example, your Facebook activity or Amazon purchases — using Datawallet. You and the purchaser each have a public key and a private key. Public keys are used to encrypt a message, to scramble it so that it looks like gibberish to everyone except the holder of the matching private key, who can use it to decrypt (unscramble) the message.
In order to exchange your private data securely, you encrypt it with the purchaser’s public key and send the encrypted data to them. They take the data and decrypt it with their private key. If someone in the middle intercepts the data, all they obtain is an unreadable mess.
Now that I’ve seen some examples, let’s wrap it up all together
Let’s make the argument that Emblem Vaults can be the ultimate utility tool for tokenization of anything.
There is an old school example that blockchains are the underlying rails and tokens are the boxcars that run on those rails. In the past, Emblem Vaults were described using this analogy — it’s easy to understand why, it’s difficult to find a better one. However, the underlying Emblem Vault technology is actually a set of tools — not just the boxcar. So what can that set of tools accomplish? Let’s create a better analogy.
Well where do you want your train to go?
As an American living in the middle-of-nowhere USA, I feel unqualified to describe public transportation in any other countries. But I need a real life example, so LFG! In Italy, the rail system can be broken down by geographics: National, Regional, Metropolitan. There are a few major companies that own the rail system: Trenitalia, Nuovo Transporto Viaggiatori, Trenord. Those rail systems can be broken down into at least two categories: High-speed rail and regular(?)-speed rail. [My American is showing here.] Furthermore, a number of qualified train operators can use these systems, such as: Italo, Frecciarossa, or Regio-Express.
So what’s the takeaway? They are all connected. How are they connected? Deeply and emotionally, thanks for asking. No, how are they connected? Oh, by an intricate set of nearby rails, levers, switches, well-written logic, and well-trained professionals to make sure nothing crashes. That means, if I wanted, I could take a boxcar full of chicken alfredo and buffalo chicken pizza from Platform 3 in Naples to Platform 14 in Milano Centrale using everything listed above.
Bring it back to tokenization and blockchain
As a chemical scientist, who only uses my computer for spreadsheets and emails, I feel unqualified to describe the intricate nature of connected blockchains. But I need a real life example, so LFG! On the internet, Web3 can be broken down by a set of protocols led by blockchains that intend to rewrite how the internet is wired. There are a number of blockchains try to own this system: Bitcoin, Ethereum, Cardano, or Secret Network. These blockchain systems can be broken down into at least two categories: Layer-1 and Layer-2. Furthermore, a number of qualified dApps can operate on those networks, such: Chainlink, Matic Network, Circuits of Value, or sSCRT (shhh!).
So what’s the takeaway? They’re all connected. How are they connected? They’re not, tribalism runs deep on the internet. Okay then, how could they be connected? Oh, by an intricate set of protocols that leverage unique mechanisms, written by wizard developers that aim protect how your digital assets are transferred amongst the networks. That means, if I wanted, I could create a token full of spaghetti NFT art, 5 Bitcoins, Matic Network dApp tokens, my health record, my genome from 23andMe, and $USDC, and transfer them privately on the Cardano blockchain from myself to an unidentifiable buyer.
Most of that functionality is already a reality, and it is called Emblem Vault. It’s the toolkit that can tokenize anything and move it wherever you want. From consumers to enterprises to autonomous AI, the possibilities are endless, and they are being built now. How do you put a valuation on the vision set forth by Emblem Vault? How big are the markets for tokenization of healthcare data (>$18b), personal data (>$77m), or spaghetti art (>$How much would you pay for this)?
Let’s not forget about the token that powers this swiss army knife of tokenization, COVAL. The Circuits of Value token already exists on multiple blockchains and is interoperable between them using the tools provided at Emblem.Finance. The boxcars on your rails may be powered by steam, coal, or electric. The switches and levers at the train junction may be moved by electrons or hands. Just like that, Emblem Vaults are powered by COVAL. What’s your destination?
