How Blockchain Tokenizes Physical Assets
A blockchain does not pick up a ruby. What it can do is hold a unique token ID, a pointer to documents, and a transfer history that anyone can inspect. The stone, the vault and the contract of custody stay in the ordinary world.
On-chain versus off-chain
- On-chain: token ID, holder address, mint/burn events, sometimes a hash of the passport.
- Off-chain: the gem, the laboratory paper, insurance, KYC files, the issuerβs terms.
The design fails if those two sides drift. That is why programmes publish proof of reserves and keep a registry.
What the chain is good at
Timestamped transfers. Public token supply. A record that is hard to quietly edit. What it is bad at: telling you whether the parcel in box 14 is still the stone in the photograph. For that you still need people and audits.
Continue: gemstone tokenization and technology.