Exploring the Deeper Challenge: Can Human Assets Be Fully Digitized or Tokenized?
- Nevethithaa
- 9 hours ago
- 5 min read
— A Conversation with ThinkCloud at the 2025 GFTN Forum in Tokyo (Part 1)
Overview
As digital finance moves toward full-scale adoption, establishing trusted digital identities and asset certification mechanisms has become a major challenge.
At the 2025 Tokyo GFTN Forum, ThinkCloud raised a critical question: Are we really ready to fully digitize human value?
From the intuitive trust in physical paper to the unseen risks of the digital world, this article reveals the vulnerabilities behind electronic signing systems that millions trust daily—and explores potential solutions.
What We’ll Cover
The Interoperability Crisis of Digital Transformation
As the fintech industry pushes forward, one persistent challenge remains: building and verifying digital identities.
Digital identity verification is the essential foundation upon which all trusted interactions in our digital economy are built.
But it’s facing a serious interoperability crisis.
The question raised by ThinkCloud at the 2025 Tokyo GFTN Forum cuts much deeper than technology choices or regulatory frameworks. It addresses a bigger, more thought-provoking issue: Can human assets ever be fully digitized or tokenized?
More precisely: Can we find a consistent and verifiable digital carrier and trust foundation for all human values and behaviors?
Historically, paper has served as the record-keeping medium for assets, contracts, and monetary transactions across cultures and systems, offering strong interoperability.
But after digitization, inconsistent standards, chaotic formats, and a lack of consensus have severely reduced its interoperability.
Despite technological evolutions—from computer-based certificates to digital signatures, blockchain distributed ledgers, and asset tokenization—the world has yet to form a global consensus on a standard digital system.
The reason behind this?
We never fundamentally analyzed the inherent differences between paper and digital mediums.
Paper vs. Digital: Fundamental Differences in Integrity and Interoperability
Paper, as an asset carrier, offers strong interoperability across regions and cultures, as well as integrity through its natural immutability.
Once something is handwritten, printed, or signed on paper, the ink seeps deep into the fibers, making tampering extremely difficult.
In contrast, digital content is extremely easy to copy and modify.
To ensure the integrity and immutability of digital documents, the EU has established trusted electronic document standards, such as PAdES, XAdES, CAdES, and JAdES. This means not all digital formats—like LINE stickers, emails, or Word documents—are suitable for legal documentation and formal transactions.
Paper doesn’t have this problem.
Compared to the simple integrity of paper, digital documents face substantial challenges in both integrity and interoperability.
Even when using PKI (Public Key Infrastructure), cross-border interoperability of digital certificates is restricted by national standards, making digital less interoperable than paper.
Blockchain ecosystems propose that assets could be tokenized through decentralized structures.
While blockchain’s distributed ledgers ensure immutability, and thus became the foundation for digital currencies like Bitcoin, the loose management of issuing private keys has made it easy for illegal activities like money laundering and ransomware attacks to proliferate.
Challenges in Digital Workflows and the Search for a Digital Trust Mechanism
Traditional paper-based workflows don’t just involve signatures and seals, but also in-person meetings, due diligence (DD), and Know Your Customer (KYC) procedures.
Fully replicating these through purely digital means brings many concerns.
Without clarifying the fundamental differences between paper and digital, any discussion on digitization fails to make real progress.
This explains why, despite years of blockchain and cryptocurrency development, they have not achieved the ubiquity of the internet, computers, or mobile devices.
In a utopian vision of a digital society, we dream of a future that offers paperless, presence-less, cashless, cross-border, and cross-currency transactions.
But in reality, we’re stuck grappling with issues like interoperability, trustworthiness, tokenization standards, asset recovery, and regulatory harmonization.
To truly move forward, we need a viable solution that meets the following criteria:
1. Establishing Standards for Digital Identity
A trusted digital identity standard is fundamental to building digital trust.
Taiwan once attempted to promote a digital national ID card initiative, but public concerns over data privacy and information security led to its suspension.
The lack of a reliable digital identity infrastructure has allowed digital scams to spread, becoming a collective challenge for the public and the government.
While centralized models offer efficiency and convenience, they come with cybersecurity and personal data risks.
Therefore, future digital trust mechanisms should shift toward decentralized architectures, learning from past experiences.
2. Trust Factors for Secure Transaction Verification
In the past, online transactions relied on passwords, one-time passwords (OTPs), and PKI as two-factor authentication methods—verifying either "something you know" or "something you have."
This is similar to how seals or stamps are used in paper-based workflows. Authorization is granted as long as the token is valid.
However, token-based verification has a major flaw: it recognizes the object, not the person. For example, even when carrying a passport, travelers must verify their identity at border control.
Yet, even with the most stringent PKI verification systems, merely holding a private key is considered equivalent to identity verification and authorization.
This is the key difference between digital and paper-based operations. Paper systems require document verification, in-person presence, and authorized signatures simultaneously; digital systems attempt to replace all three with a single credential.
This gap explains why, despite legislative support for digital signatures in many countries, paper signing is still hard to fully replace.
Similarly, Web3 and DeFi initiatives struggle to gain traction because the current digital trust mechanisms are immature.
3. Building Reliable Trust Carriers for Digital Transactions and Assets
The recent hacking of the Bybit exchange shocked the world, setting a record for the largest loss in cryptocurrency history and becoming one of the most severe cyberattacks in financial history.
Blockchain asset management heavily depends on private keys.
Extreme cases like the British man who accidentally threw away a hard drive containing billions in Bitcoin—and attempted to buy the landfill to recover it—highlight the risks.
Entrusting private keys to exchanges carries uncontrollable risks, while self-managing cold and hot wallets can lead to losing assets due to forgotten passwords, lost seed phrases, device failure, or hacking.
Even multi-signature wallets, which aim to distribute the risk by using multiple private keys, are not immune to cyberattacks.
The underlying problem?
Blockchain signing mechanisms are based on smart contracts, which are code, not human-readable contracts.
If signers cannot understand the code, they are vulnerable to blind signing attacks, making them easy targets for hackers.
What’s Next?
For thousands of years, ownership and critical rights have been recorded on paper, requiring no private keys or wallets and facing no hacking risks.
As we move toward full digitization, can we find a recording method that ensures asset security while eliminating the burden of private key management?
Shouldn’t signing return to a more human-readable form, instead of obscure, complicated code?
Faced with the challenges arising from immature digital trust mechanisms, are we doomed to be trapped, or is there a way to break through and bridge the gap between digitization and trust?
In the next part of this series, ThinkCloud will share its unique, real-world tested innovations that directly address these challenges, offering a practical path to a safer, more intuitive digital world.
Stay tuned!
Curious about the future of digital identity? ➡️ Get in touch to see how you can be part of the transformation!
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