Token Economy and the Blockchain
Last Updated: 2018-05-03 13:30:42 (GMT)
(This article is excerpted from everiToken's technical whitepaper)
The arrival of Token Economy
As of April 2018, the technology of blockchain and bitcoin has been around for about ten years. One of the questions we have been thinking is: is blockchain technology revolutionizing production in ways that bring positive benefits to the world economy?
Let's look at a set of data: at present, the assets managed on the blockchain (hereinafter referred to as "on chain") are basically a variety of tokens, with a total market value of about $300 billion. Assets in these chains are generally characterized by high volatility and strong speculation, which are far from a benefit to the world economy. In fact, since Satoshi Nakamoto, prople have wanted to make these "tokens" a payment currency, but now it is just a digital asset and does not play the role of currency. Any emphasis of a "digital currency" is more of a name than a reality.
In fact, currency is power, currency is politics, and monetary power must belong to the state. Therefore, it is very difficult for Tokens to replace currency. Without authorization and support from the state, the so-called "digital currency" is only self deception.
On the other hand, the global mainstream assets (tangible and intangible) are not on the blockchain (hereinafter referred to as "off chain"). There is no intersection between blockchains and assets off chain.
But is a Token really just a token? No. The original meaning of Token is "symbol, signalling", and when translated to a certificate is more accurate than digital currency. The certificate can represent all sorts of rights and interests, from the identity card to the diploma, from the currency to the bill, from the key, the ticket to the integral, the card coupon, the stock to the bond, to the proof of all rights and interests of the human society. Looking back on history, all the civilizations of human society can be said to be based on the proof of rights and interests. All accounts, ownership, qualification, proofs and so on are all proof of rights and interests. As Yuval Grali said in the Brief History of Humankind, "it is these ‘fictitious facts’ that are the core reasons for the wise men to stand out and to build human civilization." If these proofs are all digital, electronic, and cryptographically protected to verify their authenticity and integrity, then the human civilization will be revolutionized. We call this a "Token Economy".
It is not necessary for a certificate to run on a blockchain, but the blockchain provides a solid foundation of trust which is not provided by any traditional centralized infrastructure. Therefore, if a certificate is the front-end economic form in the Token Economy, the Blockchain is the back-end technology in the Token Economy. The two are integrally linked.
Combining the progress of human history and the technological progress of the block chain, we think that the next generation block chain technology should and can manage the proof of the rights and interests, mainly including the following three aspects:
- The first is the proof of the digital rights and interests, that is, the certificate must be a digital form of rights and interests, which must represent a kind of right, an inherent and intrinsic value;
- Encryption and authorization management, that is, the authenticity of the certificate, tamper-proof, privacy protected, under authorized management, supervised, and protected by cryptology.
- Negotiability, that is, the certificate can be traded and exchanged.
According to the above requirements, we put forward a set of solutions to meet the general basic needs of the Token Economy, to promote the management and circulation of Token, and to build a technical basis for the Token Economy.
Specifically, we have realized the following three main characteristics according to the above requirements.
- Fast, convenient issue Token: users do not need to write code, only to issue their own Token through our API (App, web page, or third party applications).
- Efficient transfer Token: achieve Token’s second level transfer, and can carry hundreds of millions of Tokens at the same time.
- Flexible Authoration Management: we use a simple and elegant unified model to achieve Authoration Management, support multi-person holding, private key recovery, multilevel authority, legality, government supervision, and other complex needs without the need for extra programs.