What is the Token Economy?

What is the Token Economy?
(Picture from internet)

Introduction : The certificate economy is a new concept put forward by the blockchain industry recently. Many people do not understand what is the CIS economy and the prospects of the CIS economy. Below I will use 6 sentences to explain clearly what is the certificate. economic. Each sentence is accompanied by an explanation of this sentence for your understanding. Please read it slowly.

1/Token is not a token.

It is a pass-through in network communication. The original meaning of token is token, signaling. Before Ethernet became a universal protocol for LAN, IBM once pushed a LAN protocol called Token Ring Network. , Token Ring Network. Each node in the network passes a token in turn, and only the node that gets the token can communicate.

This token is actually a right, or proof of equity.

We can use other more reasonable ways to use the token, or a more appropriate way to define, the token is a circulated encrypted digital rights certificate, referred to as the pass.

2/Certificate needs to have three elements: equity, encryption, and circulation certificate.

There are three elements in the certificate. The first is the digital equity certificate. That is to say, the certificate must be in the form of a digital certificate of equity. It must represent One right, one inherent and intrinsic value, the second is encryption, which means that the authenticity of the certificate, the tamper-proof modification, and the protection of privacy are guaranteed by cryptography. Every pass is a right protected by cryptography. This protection is stronger and more reliable than any law, authority and gun protection.

The third is tradable, which means that the pass must be able to flow in a network so that it can be verified anytime, anywhere.

3/Certificate can represent all rights and proves that the certificate can represent all rights and interests, from ID card to diploma, from currency to notes, from keys, tickets to points, card coupons, from stocks to bonds, proof of all rights and interests of human society, Can be represented by a pass.

The entire civilization of human society can be said to be based on the proof of rights, all accounts, ownership, qualifications, certificates, etc., all of which are proof of rights. As Yuval Hulari said in The Brief History of Humanity, it is these "fictional facts" that are the core reasons why Homo sapiens stand out and establish human civilization.

If these rights certificates are all digitized, electronic, and cryptographically protected and verified for their authenticity and integrity, then it will be a huge renovation for human civilization.

4/passport and blockchain are two different things, but the best partner between them is the most characteristic application of the blockchain.

Without the token, the charm and power of the blockchain will be greatly reduced. A blockchain that does not issue a pass is much better than a distributed database.

The blockchain is the back-end technology of the New World, and the pass is the front-office economy of the new world. The two things are completely independent, and the two things are equally great. The blockchain provides a solid foundation of trust for the card, and the credibility it achieves is beyond the reach of any centralized infrastructure. The Economist says that the blockchain is called "trust." Machine." We can analyze from the following points:

First, the blockchain is a natural cryptographic infrastructure. The certificate issued and transferred in the blockchain carries the cryptographic mark from the DNA and represents the rights. And cryptography is the most reliable and indestructible protection of rights. Therefore, the pass on the blockchain is naturally safe and credible in the sense of cryptography.

Second: The blockchain is an infrastructure for trading and circulation. The "pass" of the pass is to have high liquidity, fast trading, fast circulation, safe and reliable, and this is precisely a fundamental ability of the blockchain.

Some people say that the blockchain is a value exchange protocol over the Internet TCP/IP. Regardless of whether this statement is comprehensive, it at least accurately grasps that blockchain is naturally the most suitable infrastructure for value exchange.

Third: the blockchain is decentralized, which makes it more difficult to think that tampering records, blocking circulation, affecting prices, and destroying trust.

Fourth: The certificate must have intrinsic value and use value, and the blockchain can provide rich and dynamic use for the certificate through the smart contract.

5/Certificate of the economy is the digital economy of the next generation Internet

The IT technology industry has been obsessed with the underlying technology of the Internet. As the infrastructure of the next generation Internet, the blockchain is considered to be much more important than the pass. "The skin will not be stored."

But with the development of the blockchain, we found that it is the pass and the economic rules of the pass, which promoted the prosperity of Bitcoin. The importance of the general economy is more important than the block infrastructure. In the past 20 years, the Internet eye economy, traffic economy, fan economy, etc., the value reconstruction and value creation speed and scale far exceed the Internet infrastructure. The card is based on the real economy and serves the real economy.

Why can the general economics bring a new round of digital economic revolution? This needs to be analyzed from the following points

On the supply side, the supply of the certificate is fully market-oriented and highly liberal. Anyone, any organization, or any organization can The certificate of rights is issued by its own resources and service capabilities, and the certificate is run on the blockchain, which is verifiable, traceable and exchangeable at any time. Its security, credibility and reliability are unreachable in any way. . Therefore, every organization and individual can easily write, passify and marketize their commitments. This is an ability that human society has never had.

Second: the speed of circulation, this is a key. The pass on the blockchain can be hundreds of times thousands of times faster than previous cards, coupons, points, and tickets, and due to the application of cryptography, such circulation and transactions are extremely reliable, and disputes and frictions will be hundreds of thousands. The reduction is doubled.

If in the traditional economic era, an important indicator to measure the overall social and economic development is the speed of money circulation, and an important indicator for measuring the degree of development of a country and a city in the Internet era is network traffic, then in the era of Internet + economy, The total circulation rate of the certificate will be one of the most important economic indicators.

When each of us, each organizations various passes are rapidly circulating and trading, our production and lifestyle will change completely.

Third: price discovery. Due to the high-speed circulation and trading of the pass, the price of each pass will be quickly determined in the market. This is the invisible hand of the pass-through economy. It is more sensitive and sophisticated than today's market price signals. Times, it will push the effective market or even the perfect market to every micro-field.

Fourth: the application of the pass, that is, the smart contract application around the pass. Only this one can inspire a variety of innovations, and the innovation opportunities it creates and the wave of innovation that will be set up will far exceed the sum of the previous computer and Internet era.

Based on these four points of understanding, we firmly believe that Pass is the key to guiding us to the next generation of the Internet new economy.

6/pass, blockchain, big data combination is the trend

Blockchain to solve the trust problem of strangers, the pass-through economy promotes the prosperity of the blockchain, and the data value of the big data mining blockchain. The combination of the three will open a new era of digital economy.