Steemit Crypto Academy Contest / S12W4 - Tokenization

Its always a pleasure to participate in yet another interesting crypto engagement discussion here on steemit blockchain, sharing knowledge and our ideas is one of the best things we can give out to the world information is how we can do so and here in steemit we are always happy and looking forward to share our ideas to the world.

Tokenization in crypto in general term refers to assets representation of real world asset like arts, music in form digital token on blockchain giving people access to buy and sell those real world assets as token on blockchain. Generally cryptocurrency which are based on blockchain technology have been introduced for users to hold assets in form of digital money, the scope of tokenization has now gone beyond the landscape of cryptocurrencies it has now been used and represented as physical or digital arts, music and energy, we can see how artists leverage the idea of blockchain technology to tokenized their work using blockchain technology which are now referred as none Fungible token (NFTS).

In a broader context tokenization in crypto is ownership, assets representation for easy global accessibility the idea of tokenization have make it more easier for users to have direct seamless access and ownership to hold digital currencies at the comfort of their home through some holding channels like wallets and centralized exchange.

Data tokenization is generally different from crypto space tokenization here I share some knowledge about data tokenization based on research.

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What is data tokenization and how does it work? Give your own opinion.

Due to prevalent increase in cyber crime in the world there is need for users data and information to be protected from unauthorized users such as hackers this idea brought about data tokenization which is used to enhance users security and reducing the risk of data breach by representing real data with number known as token.

Therefore in simple term data tokenization is a process which involves represention or conversion of users sensitive data into non sensitive tokens which are generally represented in number forms. These non sensitive token can be used by such users to perform or carry out certain transactions or get access to essential vital information.

Data tokenization is simply used to increase and enhance how data handling are been carried out so as to increase users privacy when carrying out transactional tasks.

How does tokenization work?

For data tokenization to work there must first be sensitive information which need to be protected good example is a user credit card a users credit card for carrying out transactions carries sensitive information.

When such user want to perform any transaction let's say buying goods online instead of such user credit card information to be completely shared with such online platform directly these credit card information will be replaced with randomly generated token these generated token will generally represent such user credit card information which will give such user direct access to perform online transaction in the said platform.

The user token which is replaced by the user credit card information are afterwards stored in a secure vault separated if a need to use the sensitive data arises the user can always request for data from the secure vault using unique keys which allows the system to retrieve the corresponding token and translate it back into the users original data.

How important is data tokenization? Give your own opinion.

As stated above data tokenization in our today's world is used to increase security and users privacy especially in our healthcare and financial institutions.

1. Increased data security; years ago our information are only represented or recorded in manual reports books if there is any physical attack such as fire outbreak those recorded information are bound to go missing but with data tokenization the risk of losing information has reduced.

2. Increase privacy: individually we can also store our confidential data online which can be protected using tokenized methods.

3. Increase trust: patients information are very confidential with the idea of data tokenization which helps in storing those informations safely patient can be rest assured their information cannot be easily tempered with by other users.

4. Safe data handling: since our information are stored in non sensitive form it allows sectors like banks, healthcare to easily handle users information without exposing sensitive data to the public.

Benefits and limitations of data tokenization.

There are always limitations and benefits to every technology and data tokenization isn't an exception.

Benefits of data tokenization

The benefits of data tokenization is same as it important generally data tokenization is beneficial to both institutional who are making day to day use of it and individuals for institutions like banks and healthcare it helps them secure information safety and for individuals it helps promote privacy. On other hand data tokenization help big organisations and institutions to be in compliance with regulatory laws which are set out to protect customer data thereby reducing data breach of users information against cyber attacks and hacks.

Limitations of data tokenization

1. Complexity of implementation: data tokenization digital assets will require lots of process resources to be implemented at first stage.

2. Cost of maintenance: there is need for storage devices, maintenance of equipment and use of energy all the need good amount of capital to keep the system up and running on daily basis non stop.

3. Management: managing data in a tokenized system can be very risky losing any sensitive key to hackers means users information or funds can be at large risk which means it is very crucial to keep all sensitive tokenized keys safe from access of unauthorized users.

Are Tokenization and encryption the same thing? Explain your answer, giving a practical example.

While tokenization of data is a process in which a user sensitive data is been represented by a randomly generated token it is different from encryption although they are both related concept in data security since we already know what data tokenization is here is a insight to what encryption is also about.

Encryption is the process in which a user data is transformed into a secured unreadable format using algorithm or encryption keys an encrypted formatted file can only be decrypt by using appropriate keys.

Therefore from both definitions we can see although they are both used as data security terms but they are different from each other one use tokenization process to secure users information while the other uses encrypted keys to secure users information.

Practical example of data tokenization

Let's say a users want to use his credit card to shop online when such user enters their credit card information on the online website will tokenize such user credit card information by replacing the credit card number with token numbers.

For encryption

When a user users his credit card to buy item online when such user enters his credit card number his card number will be encrypted using encryption keys the user encrypted key is sent to the online website where the website server decrypt the user key in other to process transaction for the user.

Both methods are used to protect users data but they operate differently.

Steem and Tokenization, what are Smart Media Tokens? Give your own opinion.

Smart media token (SMT) is an incentive approach Introduction by steemit blockchain which aims to incentivise the idea of content monetization for platform and communities to leverage the power of blockchain technology into promoting the use of digital token to reward content creators on blockchain. This concept allows the use of customizable token which mean a separate platform outside steemit blockchain can connect their smart contract and create a content rewarding platform for readers users with a separate token.

some key features of SMT

1. Customization: SMT allow other content creating platform to create a separate token on steem blockchain which can be used to reward other authors.

2. Content rewards: with SMT other creators can curate authors content by upvoting which in turn can be used to generate rewards.

3. Interoperability: within steem blockchain SMT are built to be inter interoperable with other token on steem blockchain.

In general SMT built on steem blockchain aim to expand community niche on the blockchain thereby allowing different rewards token to be awarded to users based on their community it also aim to increase usability by reaching a wide audience of content creation to come and build reward incentive tokens on steemit blockchain.

In summary data tokenization is very important in today's centralized world as it help protect and improve users privacy by making sure users information are not easily accessible to hackers.