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Tokenization is the process of representing a physical or digital asset (or the rights to an asset) as a token on a blockchain. Tokenization allows assets to be broken down into individual digital pieces and traded via exchanges. Tokenization does not change the original asset but rather creates a new and efficient way that the ownership of the asset can be managed digitally.
In simple terms, tokenization represents the value of something as a token that is issued and transacted on a blockchain or DLT network. The token could represent money, a financial derivative, works of art, land, voting rights, collectibles, or your identity.
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