You may hear about the term Tokenism or Token Economy or Tokenization. Why are we into tokens and how does crypto May likely change the economy into?
What is a token?
The token is a virtual currency to represent a ledger entry as a unit of value. An electrical record to keep track of the worth of assets.
Difference between cryptocurrency and token
Cryptocurrency is a layer 1 protocol that facilitates peer-to-peer blockchain networks. It not only kept a public ledger but also verified each transaction through mining efforts. Token runs on layer 2 through platforms like Ethereum to help the verification process but get its own ledger.
What is Tokenism?
It is an idea that came up in the 1970s by a British economist named Friedrich August von Hayek. His idea was to have some sort of network like a cash register or slot machines with an electronic form of cash to sort out and require a ‘signature’ to prevent forgery.
Tokenism creates casino
The idea of Tokenism was to dethrone the power of the gold-backed fiat currency system. But fiat currency then detached its valuation from the gold completely and the government had the absolute power to print more money.
Tokenism gave birth to casinos in which they invest their own money as a chip to let people gamble under their “money system” without ever losing the real money (real value).
Tokenism to Token Economy
Bitcoin was born in 2009 and followed by Ethereum in 2015. Ethereum, in some sense, is a better version of Bitcoin because it has smart contract functionality similar to check. It enables the creation of virtual currencies on top of the blockchain. You also have an internet that connects globally. The network system is ready. Cryptocurrency also prevents forgery through asymmetrical cryptography technology. Tokenism is ready to operate.
The token economy is to make any real asset into a token. It means you can fragment your assets and do whatever you want digitally. Similar to stock when the company issues to raise funds while investors can buy and hope price increases to make profits. Individuals can issue tokens and sell them to others who believe their value in the future will rise.
You can token anything from attention to advertisements, social media likes, or game scores.
Many decentralized social media adopt ideas to tokenize 👍.
You too can come up with ideas to tokenize. For example, your article or your art through NFT.
Future scenarios (speculated)
A decentralized system may provide a way to de-commodities the current economic system in which people keep buying cheap goods.
Token commodities may help manufacturing companies to provide the best and longest durable goods to preserve value measures by the token.
Money without the money
Token May replace the money system we have in the token market. Everyone can issue their tokens and the valuation depends on how influential it is on the social media platform.
CBDC May dominate the money system in the future to monitor each transaction. Token may be a fraction of the economy only for gamers and some art collectors to preserve assets valuation.
We are evolving from the idea of Tokenism to Token Economy to Tokenization. Token has changed what valuation we used to measure and the excitement of the future is yet to come. What do you think of the future?!
Photo by Michael Dziedzic on Unsplash
Stablecoin is Not So Stable
CBDC: Stablecoin 2.0 or Stablecoin Killer
Chinese CBDC: the Ultimate Financial Weapon or Just another Copycat
DeFi Swap: Great Returns come with Great Cost
CBDC vs Cryptocurrency: the War of Privacy
Inflation vs. Bitcoin: How Speculation to Hedge Inflation has Failed in Short Term but may Create Opportunity in Long Term
Game of Three Kingdoms: CBDC vs. Cryptocurrency vs. TechCoin
Gold vs. Bitcoin: Digital Twin or Enemy
Volatility of Bitcoin: Threat or Opportunity
Lesson Learn from Robinhood IPO: Era of Crypto Exchange Comes to an End or a New Beginning?
Hypothetically, What if the Fed Fails to Control Inflation, Will Crypto Save Us?!
Stablecoin: We Ever Need Them More Than CBDCs
China FUD: Are We Done Yet?
SEC vs. Ripple: the Endless Game of War
SEC vs. Defi: What is the goal of the Defi?
City Coins: Are they the Era of New Coins?
Ethereum London Hardfork: How Hard does It Actually Fork?
Did the U.S. government just thumbs up on Bitcoin and down on Ethereum after the London Hardfork?
The End of Era for Crypto Exchange Platform?!
NFT: Digital Solution or Delusion?
NFT: The Future of Gamers' Assets
Is Bitcoin Untraceable Anymore?! It Depends!
Why Crypto Got So Political Suddenly: The Beginning Tale of Government Crypto Surveillance Program
Where are We Position Crypto at : the Problem with Money and Wealth
Crypto Hacking: How Did it Really Happen?
Bitcoin Mining Recover?! The Chinese vs. The U.S Strategy of Blockchain
The Legendary of Shitcoin: Meme to the 🌓 or Unique of 💎 or Simply just 💩
Defi: A Rainbow 5-Layers Cake
Crypto Economy: the Untold Speculative Financial System We will Live?
Red Alert: Lesson Learns from the Nearly Cashless Nation
Jack Dorsey’s Ambitious: Twitter wants to Become a Place of Freedom of Speech
What Categories Does Bitcoin Belong to or Does it Really Matter?
Quantum Financial System: The System Lost Itself in Quantum World
Doge 2.0: Who Let The Dog Out?!
Legendary Hacker: the White Hat into the Rescue
Crypto Hot Hub: The Best Place to become Crypto Incubator
EIP-1559: The Future of Ethereum Economy
Break the Fourth Wall?!
Robot Sucks: How Lousy Jobs AMMs Did to Ruin the DeFi
The Future of Cardano: as Clear or as Uncleared?
We Are Short for the Dollars: The Dollar's Liquidity Issue
Currency Comparison: Bitcoin vs Dollar
Patent the Blockchain: the Nonsense Action Shows a Worry from Big Tech Companies
Forget about Trade War: New Era of the International Trade
Ethereum Got Update Bug: A Blockchain Synchronization Problem
CBDC's Cross Border Payments System: Worse than Crypto
Bitcoin's Energy Concerns, Scalability and the End of Bitcoin Prediction
Unknown Author’s Hypothesis: Creator of PoW and PoS Hybrid Blockchain
Currency Debasement: Cryptocurrency Inflation Hedge Hypothesis Still Hold
Shitcoin Economy: Part 1 - Category
NFT Bubble: Does it Really Matter ?!
Shitcoin Economy: Part 2 - Regulations
Fiat vs. Crypto: Religion vs. Science or Vice Versa
Dogecoin 2.0: Doge Breeder Era
Shitcoin Economy: Part 4 - Technology
Disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose cryptocurrencies are mentioned in this article. This information is only for educational