With the substantial rise of Bitcoin, cryptocurrencies have recently gained increasing popularity as a valuable investment alternative and digital payment option. While in 2010, an early investor once paid 10.000 Bitcoin for two pizzas, one Bitcoin was valued more than 15.000 € in early 2017. Therefore, a crypto-hype was initiated and new cryptocurrencies were launched on a daily basis.
Although cryptocurrencies have already been considered as the next disruptive force, overvaluation, a lack of legal regulation, negative publicity and Bitcoin's involvement in illegal Darknet transactions led to a harsh downwards slope of the crypto-hype. However, while almost every cryptocurrency faced a significant drop in value, Blockchain, the driving technology behind cryptocurrencies, still unveils disruptive potential for a variety of industries and countless use cases which yet need to be explored.
Tokenization as a disruptive force
During the second trimester of my Master program Digital Business Strategy, I had the unique opportunity to replace one of the modules with the participation in an accadis research project . In cooperation with Blockchain and Finance expert Professor Dr. Ralf Wandmacher, I got the chance to explore the disruptive potential of blockchain technology and dive into the topic of asset tokenization.
Asset tokenization is the process of converting a liquid or illiquid asset, which by its nature may be difficult to trade, into blockchain-based digital representatives – so called tokens. Due to the fact that one asset can be divided into numerous tokens which can be traded individually, the potential problem of asset illiquidity is solved, and diverse investors, regardless of their location or investment budget, can create an own token portfolio. As these asset-backed tokens represent fractional ownership of the underlying asset, token-holders can even participate in the asset management via voting rights and profit from future cashflows or revenue-streams. Moreover, by tokenizing equity, tokenization even offers an additional option of capital funding for companies. One might argue that the process of asset tokenization is closely linked to the process of traditional asset securitization.
However, due the immutable nature of Blockchain, the tokenization process is much more streamlined and does not involve third-party intermediaries such as banks, brokers or custodians. Consequently, due to the elimination of intermediaries, provisions and transactions costs can be reduced significantly. Therefore, asset tokenization can be seen as a disruptive force for finance and investment activities.
A unique selling proposition for accadis graduates
In my personal point of view, the accadis research projects can be considered as a role model for a well-functioning collaborative partnership between a university, its professors and students. Even though Blockchain and asset tokenization were entirely new topics to me in the beginning of the project, I always had the feeling that I am not only working for the professor, but on an equal level with the professor. The excellent guidance of Professor Dr. Ralf Wandmacher allowed a very steep learning curve, a high degree of independent work and an overall successful collaboration.
While initially I also expected to be sitting in the library, reading books and doing theoretical research most of the time, the actual research process was nothing like it. As asset tokenization is a very modern phenomenon, there are hardly any books published on the topic yet. Therefore, the research methodology was very diverse, covered the assessment of various business plans of Blockchain startups and even ended up in a conversation with the CEO of a newly founded token trading platform. All in all, I really appreciated working on the research project and look forward to the research paper being publicized in cooperation with Springer publishing. In my opinion, the participation in a research project is an outstanding privilege and a unique selling proposition for accadis graduates.
Nicolas Wegmann, Digital Business Strategy 2020
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