There was an article yesterday that really caught my attention. It is something that I covered in the past but it is really coming to fruition. We still are in the very early stages but we can already see the foundation being laid.
Through this, we can gain some insight into the opportunities that are going to be abundant before us over the next decade.
Have you ever had an interest in being a movie producer?
It was announced that Dr. Wesley Snipes (I have no idea where the Dr came from) is opening up a $25M fund using tokens. This will be to invest in films that he and his movie studio produces. The idea is to lower the barrier of entry for institutional and retail investors. This will be done through a STO.
Here we see the benefits of tokenization epitomized. While the STO most likely means it will still be focused upon "Accredited Investors", it does highlight why more will turn to this in the future.
To start, tokenization lowers the barrier to entry. Initial Public Offerings are an expensive and draw out process. I have no idea what this exchange is charging but I would believe it is a fraction of what Wall Street does.
It also allows for much smaller amounts to be raised. This endeavor is looking for $25M. That is peanuts to Wall Street with most firms ignoring that amount. Read any financial page about a fund opening up and it usually will start with the raising of $500M or $1B.
Finally, because of fractional ownership, people can buy in for small amounts. Since I do not know the details of this project, it could have a certain minimum required. However, on the open market, we know tokens can be purchased in fractional units depending upon the number of decimal points out the token goes.
We are at the place where new technology is trying to be mashed into an old system. There is no place this is more evident than the hybrid crypto-Wall Street world. Firms are forced to act like Wall Street institutions adhering to outdated rules so as to avoid the ire of organizations like the SEC. The control system is in place and will remain that way for some time.
This is, however, just a phase. The idea of catering to "Accredited Investors" is going to be completely asinine in a few years. Right now, it can be used as a way to keep the average person out. Down the road, projects are going to want to target these individuals.
Presently, most of the stock in the United States is in the hands of 16% of the people. Since there is a lot held in retirement accounts, I am going to guess that the percentage of people who are truly liquid investors at about 10%. These are the big fish money managers are always trying to land. Since they get into cushy deals that make them money, hitting the $1M accredited level is not tough.
For the rest of us, we are on the outside looking in. If we can scrape together any money, we are allowed into the game after the assets go public. This means we are 2-3 steps removed from the initial entry point. Two layers of people made money before we even showed up at the table.
It all has to do with money. They could care less about someone's $2,500 investment. That is nothing. They are doing deals in blocks of $100K or more. Thus, you establish a system that caters to that crowd.
Right now, collectively, the bulk of the population has no money. This is equally true for the developed countries as third world nations. Thus, investing in a movie project is not on the radar. Most are too busy trying to figure out how to pay off debt or make the monthly expenses.
That is changing. We are involved in something that is radically altering the landscape. We can see it forming each day on a platform like Steem with the Steem-Engine exchange.
What I am referring to is the long-tail concept in statistics which Amazon leveraged on its way to great success.
I will put together a post about this another day. However, the main idea is the collective outside the obvious market is actually statistically greater than the other.
What do I mean?
Basically, with tokenization, we are the ones with the money; far more money than the upper 10% of fiat holders that is presently targeted.
Each day, people are earning tokens. At the same time, there are airdrops, faucets, and other means that are all putting cryptocurrency in one's wallet. Over time, if one does not cash out (swap for fiat), the balances grow. What seems like nothing can add up.
We only need to take a look at some wallets on Steem-Engine. If one is passive about the tokens received, the list keeps expanding. Certainly, few of these are worth much individually. Look at most wallets that fit this description and you see sub .05 as the balance (if that) next to most tokens.
While that is not impressive, if we spread that over thousands of tokens, in millions of wallets, suddenly you are talking about some money. Individually, it does not amount to much but collectively, even if in one wallet, it can be a decent figure.
Of course, I mentioned being passive with the tokens. There are those who are active in some communities where they are amassing a large number of those tokens. This is where we could see a fair bit of money being accumulated.
Now, I will say I know nothing about the Liechtenstein Cryptoassets Exchange. At present, it might not be possible to get to it depending upon what they are seeking in terms of payment. Once again, this will not be the case in the future.
Right now, even though it is a bit of a hassle, if one of the major tokens is used, I can get my Steem-Engine tokens there. It is a number of steps but, ultimately, I can convert it all to a currency that would enable me to get involved in Dr. Snipes project. This, if fractional ownership was allowed, a piece of movies he produces could be mine.
Think about that for a second. The tokens that are dropped in a wallet from projects that I have no idea about can get me involved in something like this. Or perhaps I am not a movie buff and prefer to buy some real estate. Once again, I will be able take fractional pieces in dozens of projects across the world simply by converting some tokens.
This will no longer just be a Wall Street game for the elites.
What makes this even better is there will come a time when offerings like this are available right from a Steem-Engine wallet.
Notice this part of the website.
Obviously, future plans including introducing STOs onto the Steem-Engine platform. It is impossible to say what the exact requirements will be other than the fact there will be some since regulatory bodies are very active these days. There might be an "accredit investor" stipulation or, maybe, some form of KYC. However it all unfolds, the key point is the option will be there for people holding tokens.
What I am pointing out here is just one application on a single blockchain. The same idea is applied to all tokens that can be traded. Earning some BAT by using the Brave browser? Those can be thrown into the mix also. How about some Karma on EOS? Same thing.
We are seeing some of the basic components of DeFi (decentralized finance) being laid. Each person who is involved in the world of cryptocurrency has the opportunity to participate. No longer is this going to be relegated to just a select few at the top who have the resources.
The reason this is so is because, for the first time, the average person will have the resources.
Tokenization is going to create the greatest wealth opportunity in the history of humanity. This is something we know simply based upon the history of the Internet. How many more videos are produced today compared to 30 years ago when the barrier to entry was very high? How many people are earning money off videos today compared to those who were earning back at that time?
Even the person receiving a few dollars each month from YouTube is in an area that did not exist before the Internet.
The same is happening to money. We are going to see millions of opportunities presented to each of us. As more tokens enter our wallets, we will have choices to make.
And, at some point, projects are going to realize there is a lot of money in individuals wallets. Just think of it as crowdfunding on steroids.
The best part is this entire process is just getting started.
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Image from article linked.