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Blockchain's immutable and decentralized ledger is the perfect framework for the wide range of companies that want to take asset management to the next level.
November
15, 2018
6 minutes of reading
Opinions expressed by Business owner the contributors are theirs
"Asset" could have a clinical implication, but refers to much of what makes our lives, our assets and our equity portfolios. The act at home, the 401 (k) that you plan to retire and the antique watch that you inherited from your grandfather are all assets; so clearly "assets" are worth the effort needed to keep them safe and manage them efficiently.
Related: Blockchain is how we can protect our privacy in a world of omnipresent surveillance
What is clear is that blockchain technology merges with this world of asset management. Blockchain's immutable and decentralized ledger is the perfect framework for the wide range of companies that want to take asset management to the next level. If you follow blockchain news, you know that blockchain asset management is not a marginal idea – it's a movement embraced by some of the largest technology, finance and research institutions.
Examples? In 2016, IBM began using a blockchain to track the complex movement of software and hardware across the supply and development supply chain. And the global service company Accenture has just announced the launch of its software licensing blockchain platform. Blockchain's asset management also has clear applications in the financial world: one study concluded that if the blockchain were implemented in the investment sector, asset managers could save $ 2.7 billion a year.
But more asset management is possible, using blockchain technology: many companies and thought leaders believe that any physical or intellectual property is compatible with blockchain. CoinBase CBA Balaji Srinivasan even predicted that the tokenisation of the blockchain could "turn the world into a huge stock market".
The advantages of Blockchain for many asset classes
Several companies are exploring different ways to manage blockchain asset management and compete to find who can develop the most user-friendly, efficient, reliable and ultimately innovative asset management tool. These companies share a basic framework for the joint operation of blockchains and asset management: they use token blockchains or block portions in the chain to represent ownership of an asset. The owner of the blockchain property owns the property to which it is linked.
The connections of Blockchain resources with intellectual or digital real-world properties with intrinsic value make them a different race from standard cryptocurrencies like Bitcoin (whose value derives partly from the perception of network value) or utility tokens like Ether (whose value derives from its utility in a specific platform).
A universal source of "truth"
Tying the resources to the blockchain can unlock a wide range of benefits. A blockchain can serve as a universal source of transaction truth, and this is attracted to interested parties in complicated wealth management situations. For example, the Australian Securities Exchange (ASX) is working with Digital Assets to renew its Clearing House electronic sub-registration system (CHESS), to implement a new blockchain settlement system for exchange.
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Dominic Stevens, CEO of ASX, says he can save Australian investors over $ 20 billion by launching the platform, which he believes will constitute a "perfect chain of securities" each time the transfer of securities from the participant to the participant. Securities exchanges provide for such significant savings because asset transfers assisted by blockchain require significantly fewer administrative resources to ensure compliance, resolution and reconciliation.
Get to the open market
Platforms like Polymath are helping companies looking for investments to offer "securitized token offers". These investment products encode the fractional ownership of securities (think: actions) on the blockchain. Tokens can be bought and sold on the open market (because they regulate the SEC), shifting sales of securities out of traditional exchanges altogether.
Fractional tokenisation of securities and other assets creates liquidity in traditionally illiquid markets. If you own a large, immovable building like a building, it is usually difficult and expensive to buy and sell shares owned by that property to others. However, a blockchain can make fractional ownership possible, allowing you to buy and sell shares in previously illiquid entities.
Example: The New York Times he recently reported that blockchain assets are changing the world of high value art collecting. The Maecenas investment platform owns about half of a precious painting by Andy Warhol, but has split the other half into fractional ownership shares to be bought and sold on a blockchain trading platform .
Blockchain can also be used to protect less tangible assets such as digital and intellectual property. Lexit uses a blockchain to organize an entire startup technology and intellectual property market.
Challenges in blockchain asset management
Blockchain assets still have obstacles to overcome. But this sector of technology and finance is the source of constant innovation, which means that some of these obstacles will not remain as impossible as they once were.
A significant obstacle to the mass adoption of blockchain assets is the difficulty of proving that the activities and identities claimed on the blockchain are genuine. Blockchain networks can only accurately collect data on the status of their network. The information that verifies if this network accurately represents real world resources must come from third parties and those third parties can make mistakes or lie. Imagine that you decided to develop your house on the blockchain, then you discovered that someone else had arrived before and claimed your house as his resource!
Blockchain asset management companies are working hard to solve this problem. TrustToken, a project designed to facilitate asset trading through the blockchain, uses platform tokens as a guarantee against blockchain assets, discouraging unfair behavior. Metaverse, an asset management platform touted as the next Chinese "Ethereum Killer", uses a digital identity ecosystem verified by "Oracles" or entities that control the network from real-world information.
Related: 5 sectors could be interrupted by Blockchain
In short, the Blockchain assets are the future, and to an ever greater extent, that future is already here. In the long run, asset blockchain could change the way our society thinks of daily business, as the boundary between the offline and online world becomes amorphous.
