The rise of cryptocurrencies is going to bring about the “tokenization” of a number of illiquid (as well as liquid) assets.
Today, the main way investors put money into start-ups is through a VC firm. You hand over your money to the firm for a 10-12 year period. You trust them to invest it in start-ups (like Uber) on your behalf and see it through. You hope that, far away in the future, you’ll get a good profit back on top of your initial investment. But the investment is illiquid. For the next decade, you can’t tap that cash for some emergency need. It’s theirs.
In the future, almost any private investment — from a limited partner’s investment in a VC firm down to the mortgage in your house — could be “tokenized” and traded.
This means the day-to-day (and even minute-to-minute) value of a privately held company will be public for all to see and potentially trade via the blockchain. You might hold your investment for its natural lifetime. Or you might decide to sell it after six months or a year.
Bitcoin will make all private companies public companies in the future — and that will be for the better of everyone.
Topic: “Tokenization” of illiquid assets. (Read 259 times)
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