Thoughts on using blockchain tokenization to sell traunchs of equity backed by physical assets?
I was approached for a potential career change and the company, in very very simple terms, uses blockchain crypto currency methods to break up equity stacks and sell off to individual investors. They treat it as a security, so I would have to get a series 7 license. This kind of feels like the next big thing, but I have no idea how it works. Has anyone had experience with this type of CRE?
[{"id": "fz9g93o", "text": "That only works for non RIA managed assets, which, granted, is a ton. Also given capital intensive nature of real estate I have no idea how a capital call would work or how the administration fees wouldn\u2019t eat someone alive. But I don\u2019t know I guess it\u2019s cool? Good luck let us know how it works out!", "replies": [], "depth": 1}, {"id": "fz9jh36", "text": "What's the benefit? I get using a blockchain as an immutable ledger or for faster settling, but based on this info it's not clear what the benefit is", "replies": [{"id": "fz9om2h", "text": "Look up Colored Coins.\n\nBasically pretend a given BTC* represents a property (or in OPs case a security, if I understand). You could then divide / trade that BTC up in all sorts of ridiculous ways, and the percentage of that BTC each person owns is their ownership stake in the property. It'd be a public ledger, and the owners would have a way to prove their stake. You could have an almost unlimited number of owners, perhaps even anonymously. \n\nProfits would then be sent out proportionally. Voting is easy too - you issue some other coin based on ownership, and then the owners transfer to a given address to vote. \n\nOP is thinking of taking a job at a company that facilitates setting up said ownership schemes via colored coins. I'd probably take the job, just because the amount of cash thrown at blockchain companies is nuts. \n\n*They'd probably make their own blockchain instead of using BTC because it's trivial and you can raise more money that way. You'd probably want some kind of smart contracts too.", "replies": [{"id": "fz9qide", "text": "Thank you for this response. I didn't really get that from his post. \n\nIt is a bookkeeping exercise at the end of the day though it seems. Just prevents an associate from fucking things up somehow and let's you get a bit more nuanced with ownership", "replies": [{"id": "fzbd0y2", "text": "Well it also makes it very simple to sell, divide, or trade the asset without involving an associate at all. You could buy/sell totally off the books, or on any exchange you wanted. Whoever holds the private keys is the owner of the asset, sort of like a bearer bond. There are obvious real world security issues with this though.", "replies": [], "depth": 4}], "depth": 3}, {"id": "fzae7cy", "text": "Ethereum has platform for smart contracts like you are talking about, you should look into RealT. They do tokenized real estate on the Ethereum blockchain that sounds similar to what you mentioned.", "replies": [{"id": "fzaeazs", "text": "https://realt.co/", "replies": [], "depth": 4}, {"id": "fzafu9r", "text": "Yeah I didn't want to get into a whole thing about altcoins / ETH, figured saying smart contracts was enough. Thanks for the link though!", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "fzaocvt", "text": "Apologies for lack of info. I\u2019m unclear to a lot of it, which I guess is a sign I should not take the offer. Also, I don\u2019t want to reveal the company and someone sus out who I am on the internet. I just can\u2019t shake the feeling that this could be the next Amazon, or Microsoft. Something that revolutionizes how we do CRE business.", "replies": [{"id": "fzaqlx9", "text": "I think this has been tried before, check out Caviar.io , they closed down now", "replies": [{"id": "fzaqmxe", "text": "**I found links in your comment that were not hyperlinked:**\n\n* [Caviar.io](https://Caviar.io)\n\n*I did the honors for you.*\n\n***\n\n^[delete](https://www.reddit.com/message/compose?to=%2Fu%2FLinkifyBot&amp;subject=delete%20fzaqlx9&amp;message=Click%20the%20send%20button%20to%20delete%20the%20false%20positive.) ^| ^[information](https://np.reddit.com/u/LinkifyBot/comments/gkkf7p) ^| ^&lt;3", "replies": [], "depth": 4}], "depth": 3}, {"id": "fzb1awi", "text": "Yea no this isn\u2019t going to revolutionize commercial real estate. You need a LOT of capital in CRE and doling out like $50 pieces of a deal isn\u2019t really useful to anyone. Plus there\u2019s already an option for people who want small exposure - they can invest in a public REIT.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fz9okng", "text": "No. Please god no.", "replies": [], "depth": 1}, {"id": "fz9waf2", "text": "What company? I\u2019d love to get a job there! Crypto Enthusiast AND a Mortgage Underwriter", "replies": [], "depth": 1}, {"id": "fzarbs8", "text": "Avoid at all costs.", "replies": [{"id": "fzax3xh", "text": "I\u2019m leaning that way, especially since I\u2019m trying to focus on asset management route. My biggest thought is: will I be the guy that misses out on potentially billions? Could this be the future in doing business?", "replies": [], "depth": 2}], "depth": 1}, {"id": "fzasuds", "text": "Love the innovative thinking. My question would be how do you vote on \u201cstrategy\u201d for the building. That\u2019s what you pay asset managers for I guess but would you always agree with them? The relationship element gets taken out of this to a big extent", "replies": [], "depth": 1}, {"id": "fzayxo8", "text": "I looked into this. Pinnacle Storage Properties tried to launch a platform. There are two main issues: 1) this is a security token, which requires the same level of restrictions as a traditional reg D offering. 2) it is tough to provide liquidity to token holders. No one that I\u2019ve seen has been able to build a high liquidity cross-token trading platform for security tokens. Until that happens there really isn\u2019t much benefit in tokenizing.", "replies": [], "depth": 1}]