THE NEXT BIG THING IN TOKENIZATION

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THE NEXT BIG THING IN TOKENIZATION

The level of digitalization going on across the world today is immense and cannot be overlooked because it is literally in our faces. Everything is rapidly being tokenized as a result of improved technology and innovation. Technologies such as Non-Fungible Tokens (NFTs) and the virtual world (affectionately called the Metaverse) are the in-things. All of these have been made possible because of the crypto space and everything ties down back to crypto. If the word tokenization still sounds a bit foreign to you, we’ll take a look at what tokenization entails and what sector(s) is in dire need of it.

WHAT IS TOKENIZATION?

In a simple sense, tokenization connotes a process of putting a real-world asset such as real estate, precious stones, artworks, computer games, musical royalties and the likes on the infallible blockchain. It is the process of creating and issuing digital assets whose ownership and trading are registered and recorded on a blockchain. Generally, tokenization is set up to enhance data integrity and security.

The following are a list of some assets that have been tokenized already:

  • Artworks
  • Collectibles such as virtual game skins, classic cars, Yu-gi-oh as well as pokemon cards.
  • Computer games
  • Corporate debt
  • Equity
  • Funds
  • Income streams from sports teams, player contracts.
  • Intellectual property (IP)
  • Loans
  • Loyalty/reward points just like in upland
  • Luxury goods
  • Music royalties
  • Precious metals
  • Precious stones
  • Virtual domains
  • Wines

SO, WHAT IS THE NEXT BIG THING THAT CAN BE TOKENIZED?

The art, sports and especially the music industry have found the transition to the digital world effortless and seamless. But one vital sector that is yet to fully adapt to the digital world is the healthcare sector. So let’s take a look at the constraints of the healthcare sector as well as how tokenization can resolve these issues.

EVER-INCREASING COSTS AND INADEQUATE PAYMENT METHODS

As the day goes by, the cost of health treatment and equipment skyrockets. Governments are chalking out over 20% of their GDP on healthcare, and the encumbrance is set to be even bigger as the global population continues to escalate. The healthcare industry needs a payment revolution, and both providers and consumers stand to benefit from one.

Healthcare providers need to start accounting more for consumer payments, due to the increase in High Deductible Health Plans (HDHPs). The issue here is that consumers have certain payment expectations set by other industries and they are habituated to new and convenient technologies that let them pay for anything, whenever and however they want. 

However, when consumers visit the office of their healthcare providers, they encounter awfully limited payment selections. This confuses as regards what they owe and then the problem of how to initiate payment arises. To add to the confusion, their healthcare bills often don’t arrive until weeks or months after the provider visit because of the claimed adjudication process.

This confusing process can lead to a poor overall consumer experience, regardless of the quality of experience they had during the initial visit.

SECURITY RISK

Asides from the cost and method of payment which happens to be the very first on the list of healthcare sector issues, the healthcare sector is confronted with serious security risks. Based on reports published by PwC and Transparency Market Research (TMR), the digital health market is set out to increase to a whopping $61 billion in 2021 and $536.6 billion by 2025. While this connotes a massive opportunity for growth, it also presents an equally massive security risk. Also the need to ensure regulatory compliance with agencies such as the HIPAA and PCI DSS only adds to the injury.

HOW TOKENIZATION CAN BE USED TO SOLVE THESE ISSUES?

Tokenization can help reduce the cost of medical treatment by transferring the power to hold and own data from intermediaries; such as insurance companies or organizations, hospitals and pharmaceuticals to the patient. When patients are in control of their data, they can decide to share with a research institution and receive tokens as rewards which can ultimately be used to clear hospital bills. A survey found that about 54% of Germans and 99% of the French would be more than willing to submit their data if rewards were attached to it.

In the same vein, when providers utilize tokenization to securely save consumer payment methods on file, they are presented with opportunities to automate the collection of consumer payments, which enables providers to achieve payment assurance while simplifying the consumer payment experience at the same time.

As regards security risk, standards and procedures have been developed by the ANSI and PCI for tokenization. These standards will help in ensuring compliance with facets of inventory management, physical access control, and penetration testing. Moreover, tokenization will help in mitigating the cost of breach notification as specified by the HIPPA.

In conclusion, the healthcare sector, like other sectors in our world today, needs to hasten its tokenization and eradicate the issues plaguing the industry. So far, Tokenization has proven a valuable innovation and it would be great if it gets to the healthcare industry.

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