The appearance of blockchains, NFTs, and cryptocurrencies has gained large momentum lately main us to imagine that tokenization is the inevitable futuristic financial expertise that the world will take no time to adapt. The idea of tokenization as a type of forex shouldn’t be new and has existed amongst people in historical past as effectively.  

What’s tokenization?

Basically, tokens signify one thing or carry some worth within the financial ecosystem. Just like gold and paper cash, which represents the traditional monetary system, tokens (created on a tokenization platform resembling Tokel) signify the industrial worth of the novel decentralized cryptocurrency system.

A tokenized system and tokenization is sort of an historical idea with case research and examples out there within the historical historic interval. Cash, banknotes and on line casino chips have been excessively used previously which denotes a authorized possession proper of the given forex. These are glorious examples of the bodily and historic tokens used as actual cash, one thing which comes with financial worth.  

When did digital tokenization begin?

One of many earliest circumstances, when digital tokenization was first agreed upon, was in 2001 by TrustCommerce.

TrustCommerce used digital tokenization to guard the data of bank cards. Considered one of their shoppers, classmates.com, didn’t want to retailer private and delicate information of their prospects’ bank cards on their server. To take care of the difficulty, TrustCommerce got here up with the idea of digital tokenization and used tokens for referencing transactions in the perfect pursuits of classmates.com. This allowed funds to be made in secure and dependable processes with out requiring to retailer fee or cardholder data.

The primary-rate answer of TrustCommerce was extraordinarily safe since potential hackers who tried intercepting fee data would solely obtain an indecipherable string on the encrypted information with none fee data.  

10 Examples of tokenization all through historical past

1) Nation-specific Foreign money

NAFTA and EU are a couple of of the collaborative unions which have established a panorama the place each state or nation would function with the identical digital coin and therefore would share the precise construction of the financial economic system.

However, a slight recollection of historical past would inform us a few world the place the economies weren’t centralized with differing tokens or currencies. Primarily, that is how cryptocurrency or digital tokenization works—an array of digital cash competing for financial wealth and power.

2) WIR Franc

Digital forex shouldn’t be a brand new idea; it additionally existed again within the 1900s. It was the WIR Franc forex, based by Paul Enz and Werner Zimmermann. WIR Franc was created owing to international monetary instability and forex shortages. The forex mirrored the shoppers’ buying and selling account, electronically and paper cash was completely out of the scene. WIR Franc is utilized in Switzerland and capabilities as an autonomous forex system. It serves over 60000 accounts and aids in enterprise and commerce in numerous sectors resembling manufacturing, hospitality, retail, skilled companies, and development.  

3) Buckskins

In easy phrases, tokenization includes taking a forex or an merchandise and assigning financial worth.

Shifting to the usage of digital tokens doesn’t essentially suggest it’s a new forex. Individuals have been utilizing tokens ever for the reason that thought got here out. For example, when cash was not a precedence, folks valued requirements and necessities resembling meals and heat, and Buckskins was the forex used for buying and selling. Buckskins as a forex was in the course of the onset of the US, and it was precious because it was used as tarps, rugs, blankets, water skins, and garments.

4) Mirrors

Mirrors don’t have any financial worth within the current, however there was a time when mirrors have been comparatively uncommon, precious, and costly. Throughout 600 BC, folks used silver, lead, gold, bronze, and copper mirrors. These things have been completely used and held by the wealthy and had large worth. Such mirrors can be exchanged for different commodities of equal worth, and generally, they have been traded for fulfilling sure companies.

5) Shells

 Traditionally talking, not many individuals visited the ocean or skilled the fantastic thing about open seas. As a result of this, seashells turned a precious commodity that was additionally extensively used as a forex. Seashells weren’t solely used for making clothes and jewellery however have been additionally traded for different commodities of equal worth. Shells have been used as a forex immediately due to the distinctive look they carried and the rarity of the species that also had not mastered worldwide journey.

What’s fascinating is that European and Chinese language communities within the fourth or fifth century BC used shells as bargaining chips. Even after shifting to the usage of steel cash, these communities would nonetheless print the design of the shells on them.

One such particular form of seashell was the cowries. These have been common and generally used as bargaining chips for greater than 700 years within the Indo-Pacific, Arabia, and Africa. These cowries result in the event of the appalling slave commerce.

Many Native Individuals used these shells as a forex too and likewise for recording treaties and tales. Individuals referred to as these shells, “wampum” which have been used for buying and selling, whereas the Pacific Coast residents referred to as them “haik-wa.”  

6) Tobacco

Though Tobacco use is detrimental to human well being, it was an important tradable good previously. This was as a result of tobacco was smoked and burnt for enjoyment, and generally, it was used medically; therefore, it was purchased and offered in enormous portions. Tobacco was treasured and was thought of the monetary basis of your complete economic system for hundreds of years.

Metallic cash have been scarce within the seventeenth century, and as a consequence of this, many states like Maryland, North Carolina, and Virginia began making superior high quality tobacco for use as forex.  Again then, the value of tobacco was 3 shillings, and in reality, it was thought of authorized tender in 1642. The tobacco forex system was abolished in 1727 for the reason that value began to fluctuate erratically.  

7) Salt

One wouldn’t imagine that salt was additionally utilized in buying and selling previously. Since salt is available immediately, it’s laborious to imagine that the commodity was uncommon and held a major worth. Therefore, it was traded as a commodity that had worth and held wealth. Due to its medicinal properties, it was additionally utilized in totally different medicines, which solely added to the worth of the commodity.

Up to now, the bottom of commerce routes between the Mediterranean Empire and the Phoenicians was salt. Whereas in Tibet, Marco Polo discovered small salt truffles within the image of the Grand Kahn, and the salt truffles have been used as a forex. Even immediately, Ethiopian nomads, Danakil Plains, are nonetheless seen to change totally different commodities for salt reserves.  

8) Cattle

Subsequent on the forex listing is cattle. Earlier than folks began utilizing gold or paper cash for buying and selling and figuring out the monetary base of an economic system, the dimensions of the cattle flock was thought of to find out the identical. As everyone knows, cattle assist in some ways. They supply meals, assist in farming, and can be consumed as meat. Therefore, it’s not inconceivable to imagine why cattle and animals alike have been used as a medium of change since giant horses or cows have been value every little thing exchanged for it.

In lots of cultures, there are norms like dowries or choices concerned in marriages and offers. The dowries can be paid within the cattle, representing an equal worth to the spouse supplied in a wedding or deal offered.

9) Barley

One of many first official currencies utilized in historical past is the Sumerian Barley forex. Barley was utilized in round 3000 BD, and it could be exchanged in Silas (one liter roughly) for equal items or companies. Cash got here into being about 2000 years after this. Therefore, for greater than 2 millennia, Barley or flour was used as the principle forex. Isn’t that unbelievable?

10) Loyalty Packages

One could surprise how a loyalty program can be utilized as a token. Loyalty applications can be found even immediately in numerous types, and so they use factors or tokens that give the customers one thing of a sure worth that may be utilized sooner or later. These factors or tokens usually are not precisely the traditional cash we all know of, neither is it centralized. It’s utterly tokenized in a extra distilled kind.

Across the eighteenth century, many American retailers and distributors would give their customers copper cash for future purchases as assured reductions. Simply when these loyalty cash turned expensive, the retailers step by step shifted to the observe of loyalty stamps. It was Inexperienced Shields who got here up with this idea of loyalty stamp program that paid customers with redeemable and assured catalog purchases.

By the top of the twentieth century, a number of manufacturers put up literal tokens on their items that may very well be redeemable. In 1981, the 1st full-scale trendy loyalty program began to take form within the Frequent Flyer Program of American Airways, having greater than 50 million purchases. 

Conclusion

To conclude, it has already been confirmed on this article that bodily tokens or cash have been extensively used previously for a major period of time within the type of forex. Even when one ignores the historic information and examples, banknotes, cash, and on line casino chips can nonetheless show the identical since they’re at the moment getting used as tokens. These tokens are an indication of authorized possession rights and reveal absolutely the potential of tokenization. All in all, it’s solely unsuitable to imagine that tokenization is a foolish or radical idea in its toddler stage since tokens have been in existence for thousands and thousands of years now.

Tokenization is at the moment getting used to enhance blockchain expertise to supply comparable requirements current within the typical monetary sector. It allows blockchain cryptocurrencies and companies to develop ecosystems, encourage extra adoption and foster the buying and selling neighborhood.