What Is Tokenization And What Does It Work?

author-img By Sumona 5 Mins Read 11 September 2023


Tokenization has created a lot of hype in today’s world and is being used at an exponential speed by many passionate investors.

But before getting deep into tokenization, we need to understand what a token really is. A token, having no real value, represents some bigger value.

This bigger value can be that of an identity number, an amount of money, a domain(NFT domains), or any confidential information. 

Use of Tokens

Tokens can be used for minor transactions, like paying for a bus ticket.

Once you have the token and paid the corresponding amount of a token ($10 for a green token, for instance), you can use it for a few rides without spending any actual money.

On the other hand, tokens are used for massive transactions and use as well. Your bank account number is a token, and so is your bank account passcode. If someone gets hold of those tokens, you will be deprived of all the money in your account.

Now, applying the definition of tokens to the concept of tokenization, the term ‘tokenization’ refers to taking huge assets and converting them into something that is easier to carry, exchange, and use.

It is an estimation that by the year 2026, the global tokenization market will grow from USD 2.3 billion dollars (as evaluated in 2021) to USD 5.6 billion dollars. (source:

Types of Tokens

There are two types of tokens; fungible and non-fungible. Fungible tokens refer to assets that be easily divided into equal parts. On the other hand, non-fungible tokens, also known as NFTs, refer to a copy or a representative of real-world assets, such as money, domains, and virtual currency.

It is now revealed that with the usage of tokenization, the US E-Commerce market grew at an incredible rate of 27.6% in the year 2020. It is to be noted here that 2020 was a year of pandemic, and despite the economic crisis hitting almost everyone, tokenization made its way through the skies. (source:

What is NFT Domain?

NFT Domain, in particular, refers to the purchase of a web domain by paying a one-time fee. A great advantage of NFT Domain is that you do not have to pay the annual renewal fee, and once bought, the domain is yours forever.

Moreover, an NFT Domain is 100% user-owned, which means that you can only make the necessary changes to your domain unless you share it with another person.

Additional Resources:

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Joulery Reviews – Is It Scam or Legit? – Know The Reason
Shoplazza Reviews – Is Shplazza A Scam? – Know The Reasons

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Sumona is a persona, having a colossal interest in writing blogs and other jones of calligraphies. In terms of her professional commitments, she carries out sharing sentient blogs by maintaining top-to-toe SEO aspects. Follow more of her contributions at SmartBusinessDaily

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