Tokenization can be counted as the best or proper way to boost both big business industries companies it benefits both investors buyers and also sellers it helps everyone to be committed when it comes to business to organization also helps to reduce fraud and also helps to reduce data breaches during transaction.
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Tokenization a significant in various field when it comes of financial transactions organization tries to enhance security for both online and mobile payment, in cyber security it also tries in securing data and making stolen tokens useless, even in healthcare system organization helps to protect patient medical record and personal information also in real estate tokenization increases liquidity and this makes transaction of property tokens more easier.
Tokenization reduces the risk of identity theft and access from unauthorized fellow all these are various benefit of tokenization but there are some challenges that faces tokenization.
CHALLENGES AND SOLUTIONS.
Standardization problem.
Various platform have different standard of tokenization depending on what their system need and this poses some challenges of efficient data exchange and proper collaboration between different platforms with different standard protocols, lack of good standard reduces communication flow within the system and this affects adoption of the organization and its benefits because different company has different tokenization standard based on their need.
Different standard protocols makes it difficult for cross company collaboration and this definitely affect worldwide a standard protocol and maintain it looks difficult because of some changes that rapidly occur in organization technology and this causes compatibility issue.
Solution.
Companies government regulatory bodies stakeholders has to put in concerted effort in order to establish one standard protocol and adhere to it and this can be achieved by creating support or compensation for any industry or company that agree in one standard protocol and also since evolution is another challenge to standardization there should be a dynamic framework that will as well evolve with technology helping talking standard relevant and secured.
Government can as well help by providing rules and regulation that will guide the development of organization standard with such teamwork the challenge of standardization into organization will definitely be solved.
Developers should also examine types of assets that is tokenized, the audience in target and also different use cases this will help in setting a strong and effective standard.
SECURITY ISSUES.
There are some security concerns on tokenization most times fraudster then unauthorized access and manipulate data they also compromise cryptographic keys and conduct unauthorized transaction also weak encryptions gives access to hackers likewise inadequate key management and lack of obedience to regulation poses security Challenge.
SOLUTION.
Security issues on tokenization can be resolved by applying multi-layer security measures like security protocols with combination of technological biometrics and behavioral analytics.
Also regulatory bodies also can help to enhance security by regularly checking the tokenization system to see if there is any unusual act they can as well apply real-time alert and automated response that will immediately dictate any unusual act.
Transparency will also have to enhance security in tech organization also trying out the dynamic tokenization method can also help to enhance security there should be no hidden token transaction, conducting seminars on token security can as well prevent social engineering attack because users will be alert against any attack.
SCALABILITY ISSUES.
Tokenization faces scalability issue especially when there is increase volume of data it becomes difficult to maintain responsiveness and this sometimes affect performance and result to performance bottle neck also when there is delay in tokenizing larger data set it affects the speed of transaction and decreases system performance due to limited resources.
Solution
Tokenization can take place batch by batch to reduce workload and the use of microservice can also help to enhance scalability because it's expands tokenization capabilities also with balancing techniques to organization request can be distributed across different servers to reduce workload and also have an aligned distribution of tokens.
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Tokenization also faces the challenge of interoperability challenge because it is difficult for different system with different token to work together as most of those tokens are traded in different platforms with different application so there is need for a lot of work in order to establish cross-chain interoperability.
DIFFICULTY IN TOKEN DESIGNS.
There are difficulty in designing of tokens is difficult to balance granularity and simplicity while designing tokens is also difficult to design tokens that will miss specific requirements of different use cases as technology evolves everyday.
It is also difficult to design new scalable tokens without compromising existing functionalities and it is not always easy to design tokens that will remain interoperability in different systems..
Is always complex to follow all rules and standard why designing tokens and securing tokens so as to distribute them accordingly after creation.
Solution
Before designing a new token making thorough research on use cases and requirements is very important this will help to design needed token and enhance overall usability, modular token design can also help to simplify the process also it is important to check the existing standard and continue with what other token designers have.
Communicating with stakeholders will help because it will help the design tokens that will meet users expectation finally in sure to work with legal expert so as to get new update on standards and regulations.
Summary.
Tokenization faces some challenges but collaboration, communication, combination of technology will help solve those challenges and this will help enhance adoption of documentation it will also help organization process to remain effective responsive and efficient no matter what.
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