How to tokenize real-world assets (RWAs) on Bitcoin
Tokenization of real-world assets (RWAs) is gaining traction, with Bitcoin emerging as a viable platform due to its security and infrastructure. The introduction of ordinals in January 2023 allows users to create unique digital items by embedding data onto satoshis, enabling the tokenization of assets like real estate. Bitcoin-based token standards, such as Counterparty and Omni Layer, facilitate asset-backed tokens but face limitations, including slower transaction speeds and a smaller ecosystem. Smart contracts using OP_RETURN and Taproot enhance tokenization capabilities but come with challenges like minimal data storage and complexity. Use cases span various sectors, but regulatory uncertainty and scalability issues hinder widespread adoption. Despite these challenges, tokenization on Bitcoin presents opportunities for improved liquidity, transparency, and fractional ownership.
