No. of Recommendations: 2
“Tokenized stocks make zero sense until you realize they allow inveterate gamblers to rationalize they are speculating on something of value (as opposed to crypto and NFTs) and they can gamble 24/7.”
This isn’t right. “Tokenizing” a share of stock simply means attaching a token to it so it can be registered on a blockchain (Some people call it “the” blockchain, but that’s not quite correct either. There are in fact many blockchains that talk to each other, like domains on the internet.) Once a share is registered on a blockchain, its history is tracked on a public ledger.
Share tokens basically replace old-fashioned share certificates, which have not been used for years. Tokenizing allows for verification of ownership using modern security methods. It also allows for instantaneous, secure transfer of ownership, execution of trades using “smart contracts,” which self-execute under certain conditions, and public anonymity. The trade has to be reported, but the identity of the parties can be hidden, like in a cash transaction.
Tokenization also allows instantaneous 24/7 global trading of any kind of security that can be tokenized, which is to say, any type of security that exists.
Tokenizing will challenge regulators and journalists, but financial institutions have been getting ready for years; so it will likely make things easier for everyone and lower costs even further. Dumb people will use it to do dumb things, like investing in things that don’t exist, but that’s a human problem that technology cannot solve.
Welcome to the modern world of digital technology! Onward
