A wealth of experience to the blockchain and cryptocurrency realm. Mark Vernon, the mind behind TAGBOND and co-founder of the Fintech Philippines Association sits down with block magazine and sheds some light on why tokenisation is the future.
As the fintech revolution sweeps across the globe, where does these region stand?
There are a lot of innovative services appearing, and this has the knock-on-effect of getting incumbent players in the market to take notice and make change happen. There isn’t enough funding for the smaller start-ups - if you take the example in the Philippines, the three largest e-wallet players got most of the funding but, comparatively, others in the market cannot raise the funding they need. Issues remain on KYC and identity, credit scoring due to lack of transactional info and regulation that slows things down. But these are all opportunities for companies to innovate, so it is an interesting area in which to be involved. There are initiatives to help SEA countries work together, with countries like Singapore working with APIX API platforms to get fintechs and banks working together, and each country creating sandboxes in some format to help move things along.
Tokenisation for gaming can generate an abundance of new revenue streams. Is this the future of gaming?
Gaming (as in eSports not gambling) is dominated by the big players like Epic and Blizzard, but I have heard news recently that they are working with or considering working with player-owned digital assets - this will be a growing trend, as and when technology makes it possible. Players want to own what they spend a lot of time earning in game, that they can either sell or use in other
games. You just have to be careful how those assets are paid for and used, otherwise you might fall afoul of gambling regulations.
There are quite a few blockchain-based games, but limited to people who understand the technology. But for new game creators to the market, absolutely there will be new revenue streams - you only have to look at decentralised assets changing hands at Enjin or the opensea auction site to see that.
The idea of really good immersive virtual reality games is still not quite there yet, and although there are a few companies working on metaverses, the companies that are really well placed to make that a reality are those same companies that have millions of players already and the funding to make it happen.
Can you tell us more about your latest projects?
I have been involved with cryptocurrency and blockchain since 2012, and I started getting really interested in Non Fungible Tokens when Cryptokitties hit the market. At the time I was using the Stellar blockchain to tokenise assets like Fiat currencies, commodities and shares, since the Stellar blockchain offers some control of assets that is needed in regulated markets and it was a lot easier and cheaper to do than getting into Ethereum Smart Contracts. I had also created a geoTAG game which rewarded users that visited a geofenced area, but it wasn’t on blockchain at the time.
With the advent of the ERC721 standard, you could create individual assets, but it still seemed like too much work for me. However in 2019, the guys at Enjin created a new standard called ERC1155, which allows the creation of billions of different Fungible and Non Fungible tokens all within one contract. So I have been working on tagbond.com, which allows creation of geoTAG as well as other non fungible and non fungible tokens - although they can and will be used for games, I am more interested in the promise they hold in the business world.
For example, much has been discussed about moving real estate onto the chain for decentralised ownership, but it’s unlikely to happen for a long time for obvious reasons. But with this standard, a token can be created that can replace paper land titles, and the data that is connected to that token can be seen and modified using a simple base URL stored on chain with the token ID and offchain data where that token ID is recognised. Governments can still have control of the data, but the tokens can be moved around so much more easily. So for me this is my latest and most interesting project, as I see so many potential use cases.
What are the challenges to the wider adoption of asset tokenisation?
The biggest issue will be regulation, just as it has been for cryptocurrency. If assets are purely digital, and sold as individual items for use in games and business, then there is not really much regulation yet, although as the volume of trade gets bigger I expect there will be. But when a token is issued that represents something in the real world, that’s where regulation is needed.
The other issue is tech comprehension - the creation and use of public and private key pairs, of seed phrases for backup. This is more than most people are used to. This goes for cryptocurrency as well - everyone is so used to having someone else managing their assets, be it banks or game developers - that it will take some time to change that paradigm, and for people to realise that with freedom comes responsibility. Let’s hope that happens sooner rather than later.