What is tokenization (and a success story of Blocknitive)

Blockinitive, a company accelerated by La Lonja de la Innovación, was born from the detected need to apply an emerging technology like blockchain to specific solutions for complex business processes to improve them. But this company not only takes advantage of the benefits that blockchain can provide, but also those of tokenization, a process intrinsically related to this technology.

If all this sounds like it was another language to you, don’t worry. In this article, we explain what tokenization is, its close relationship with blockchain, and we tell you a success story of Blocknitive with the use of this technology so you can understand with a real example the advantages it can offer.

What is tokenization?

This concept, which is gaining increasing relevance in the world of technology, economy and business, allows companies to protect sensitive data and keep them secure, which makes it very attractive.

Tokenization allows to replace sensitive data with unique identification symbols that contain all the essential information of the initial data without compromising its security. That is, these are transformed into tokens, a piece of data that has no meaning or relation to the original sensitive data. This means that a token by itself has no value, it only has value in relation to the original data. This process seeks to minimize the amount of data a company needs to have on hand to strengthen the security of its transactions and avoid risks.

All this process is related to the blockchain technology, a decentralized database that records transactions in a secure and transparent P2P (Peer-to-Peer) network. In summary, tokenization would be the process of converting an asset into a digital token, and these reside on a blockchain; that is, blockchain provides the infrastructure for the registration and management of tokens.

The benefits of tokenization

Aware of the potential of this technology, Blocknitive offers companies the possibility of converting any type of asset into a digital token. But, in addition, they have two solutions to easily launch projects through NFTs and ICOs. This introduces two new terms in relation to tokenization. We explain them to you:

• NFTs. These are non-fungible tokens, meaning they cannot be exchanged or replaced. NFTs are unique assets that cannot be modified by another that has the same value; no two NFTs are alike. For example, a work of art is unique and cannot be exchanged for another of the same value.
• ICOs. Initial Coin Offerings are a way to raise funds for cryptocurrency-related projects by issuing tokens. That is, like crowdfunding for cryptocurrencies.

And why does Blocknitive use this technology? Tokenization is a trend that is strongly entering and gaining more and more ground due to its numerous benefits, which this accelerated company in La Lonja has not wanted to miss. We tell you some:

• Security. The data protection allowed by tokenization provides great security against possible attacks, thefts, or losses, as they do not contain sensitive information.

• Privacy. Tokens do not reveal the identity or personal data of users.
• Transparency. It increases transparency because tokens are registered on a blockchain network that is public and auditable, meaning it allows knowing the status of assets at any time, as well as their origin and ownership or other information.
• Trust. By improving the security, privacy, and convenience of the service, customer trust increases.

Blocknitive Success Story

To understand everything a little better and some of the applications that this process can have, we tell you a success story of the company accelerated by La Lonja de la Innovación, Blocknitive, which developed a points program with NFTs.

The company sought to give the customer the possibility of monetizing their loyalty points by selling them to third parties. It observed that current points programs had problems such as a scarce ecosystem; low customer valuation; inability to be sold, given away, or exchanged; and little control by the user.

Given this situation, it decided to provide a solution by using blockchain and tokenization. The idea was to transform these loyalty points into NFTs, so each point became an NFT with real and verifiable value, which can be sold, exchanged, or saved. Furthermore, being on a blockchain, they are secure, auditable, traceable, and tamper-proof.

With all this, Blocknitive developed a solution with a digital platform that collects all the points a customer earns and connects with the company's systems to automatically update the information. On the other hand, it also has an easy-to-use digital wallet where customers can store their points as NFTs, without needing knowledge of cryptocurrencies. This way, customers can sell their points to other people and buy points if they are interested.

Tokenization is a great way for companies to manage and protect their assets and data. A technology that allows improving security, privacy, and transparency, as well as creating new business opportunities that companies like Blocknitive are already taking advantage of.