Exploring the Real Benefits of Attaching Tangible Assets to Cryptocurrencies

The integration of tangible assets, such as real estate, into the world of cryptocurrencies, has emerged as a compelling trend. By attaching these assets to crypto tokens, we not only enhance the value of both the asset and the token itself, but also revolutionize the way investors and investors of all kinds interact with financial instruments.

Two Primary Reasons for Value Addition

Two primary reasons for the added value derived from attaching tangible assets to cryptocurrencies are outlined below. First, it makes it easier and faster for individuals to acquire fractional ownership in high-value assets that were previously difficult to access. For example, tokenizing a skyscraper in New York City allows you to hold a portion of that property through a crypto token, an option that did not exist before or was significantly more complex and costly.

Second, this integration often stabilizes the value of the token, particularly for those backed by real estate. The value of the token is directly correlated to the underlying asset, reducing volatility and providing a more stable investment opportunity. A token representing a portion of the building’s value will maintain its worth based on the property’s market value, offering a level of predictability that traditional financial instruments may lack.

Real Estate Tokenization and ATLANT

To illustrate the process of tokenizing real estate, let’s take a look at how a blockchain-based platform like ATLANT operates. ATLANT uses blockchain technology to tokenize real estate properties, allowing for fractional ownership and investment through crypto tokens. This approach makes it easier and more accessible for investors to participate in the real estate market, which was traditionally limited to a small, exclusive group.

Benefits of Security Tokens

Most of the asset-backed tokens are categorized as security tokens, which requires investors to meet certain criteria before engaging. This includes passing KYC and AML checks, as well as proving that they are accredited investors.

An accredited investor is someone with a minimum net worth or income, which in the USA includes individuals with a net worth exceeding $1 million (excluding the value of their primary residence), and those earning at least $200,000 or $300,000 annually for married couples.

Despite these requirements, the benefits of investing in security tokens are vast and potentially highly lucrative. According to statistics, only 30% of the world's wealth is tied to cash, while the remaining 70% is owned in tangible assets like real estate. By tokenizing these traditional assets, a digital transformation is taking place that promises to create even more significant changes in the financial landscape.

Enhancing Liquidity with Security Token Exchanges

The most significant advantage of security tokens lies in their liquidity. Unlike traditional assets, tokens can be easily traded on a blockchain-based platform. For instance, Harbor, a security token exchange, allows for seamless selling of tokens representing property ownership. To sell, you simply agree on a price with another accredited investor, and the sale is completed.

Harbor’s process ensures that the buyer is an accredited investor, preventing any unauthorized transactions. This makes the process straightforward, flexible, and low-cost, far more accessible than conventional methods. The ease and convenience of such transactions are a game-changer in the investment world, offering greater flexibility and stability to investors.

Conclusion

Attaching tangible assets to cryptocurrencies is a powerful trend that is changing the investment landscape. It not only democratizes access to high-value assets but also stabilizes investment opportunities by providing a direct correlation between the token and the underlying asset. Additionally, the cultural shift towards greater institutional adoption and the enhanced liquidity provided by security token exchanges are driving this trend toward successful implementation. The future of investment and real estate holds exciting possibilities as we continue to explore the benefits of this intersection between blockchain and traditional assets.