The concept of a token representation of value on a decentralized ledger was made mainstream by Bitcoin and embraced by other crypto-currencies. This concept of creating digital bearer tokens that can be freely and safely transferred without an intermediary is one of the most powerful new concepts DLT gave to the world.
The DLT toolset can be applied to anything that can be expressed as a token. Crypto currencies were only the first iteration of digital bearer tokens. While crypto-currency tokens typically have no direct connection to real-world assets, tokens created with DLT can now be used to represent anything from loyalty points, to fractionalized ownership of property, to the money we use every day.
Once created, these tokens can, by their nature, be programmed and transferred securely and in an incredibly direct and granular fashion. The most powerful aspect of this is the ability to directly assign digital permissions and rules around specific assets rather be limited to functions that might or might not be provided by intermediaries who control access to these assets and objects today.
As an example: In the traditional banking world, I either have access to a bank account, and the rights to administer all the funds in that account, or I have no access to that account. There are nuances to this, but in the majority of cases, this is the simple rule set that applies: everything or nothing. An application might see great value in managing funds according to granular business rules between many users of the application, but the bank may provide very limited ability to do this programmatically, if at all. The range of possible actions may be narrow and the transactions slow and expensive.
However if I “tokenize” the money in that bank account, creating tokens that represent each and every pound/dollar/yen, then suddenly I have the ability to programmatically administer each individual pound/dollar/yen – and on Radix, do so with a flexible, powerful and developer-friendly API interface. Transactions may be as complex as desired for my application, and conducted with the immediacy of digital communication.
Tokenisation gives money a fundamental new superpower: true programmability. Radix is built to make this superpower accessible to developers, and the Radix “Universe” provides a platform that scales to the broad range of global tokenized digital commerce that will be conducted through those applications.