Is it true that is the only , and all others are “scam”, or study cases at best? Or is the “T-Model” of the and new will conquer the market?
Everything started with back in 2008, but then the industry expanded with the “separation” of its underlying technology, the so-called . A more recent invention, in fact, Satoshi Nakamoto does not ever mention this term in his whitepaper, referring to it only as “chain of blocks”. However, someone realized that this technology could be used to solve other needs, without necessarily involving . The (as it was named later) can be used to disintermediate all those processes in which a third party has to guarantee for the parties involved in a transaction, from the process of a payment to the extraction of a number for the game of Bingo.
At this point there’s a division in two separate factions, the ones that believe that “the financial system will never change and there’ll always be the need of a bank to guarantee on behalf of people”, and those that say “the doesn’t exist, there’s only ”. Even if I sympathize more for the second faction, I think the truth resides in the middle. I believe that the “tokenization” of financial, economic and social processes is the real point of interest of the following years. Let’s see why.
Is best to remember, in a nutshell, which are the main characteristics of the . In my opinion, they are at least five:
Inviolability
Immutability
Transparency
Uniqueness of digital information
Timestamp
A technology with these features has infinite potential applications and if it’s true that without the economic incentive for those who “sustain” the ’s network we don’t have the security of full decentralization it is also true that for some applications, the more elementary ones, we don’t need full decentralization. For example, to create a supermarket’s loyalty point system, it’s not necessary to “involve king ”, but we can be satisfied with a less decentralized but cheaper and faster . On the other hand, if we are talking about money or financial assets, we need maximum security, therefore we will need the maximum level of decentralization.
The “tokenization” of business models will involve an infinite series of applications. Money is just a part of it.
The following are examples of information (or processes) that can be “tokenized”:
- Ownership and authenticity certificates
- Production and Distribution channels
- Public archives (criminal records, public vehicle registries, land registries, …)
- Management of public contracts
- Public rankings
- Voting systems
Besides “simpler” things such as:
- Events’ tickets
- Loyalty points
- Purchase and discount coupons
- Collectables
There are obviously the things that we are already “tokenizing”, such as:
- Currencies
- Complementary currencies or stable-coins
- Financial assets
To be able to trust the system and the , given the lack of a third central authority that acts as guarantor between the parties, it’s important to have the so-called “decentralization” of the network. There are four types of players: who maintains the network, who creates information, who exchanges it and who validates transactions (without knowing exactly the content). Then, there are hardware and software operators that take care of maintaining and upgrading the system. Each of these players has an economic interest: someone pays, someone collects. Nothing would work without financial incentives; the problem is that each field of application has participants with different interests.
When analyzing this use case, it’s best to keep in mind that maximum decentralization means more costs and less speed, but maximum security. Whereas, a less decentralized solution, for instance with pre-selected random validators is faster and cheaper. Someone could say that the is either completely decentralized or it’s NOT a (but a database). In reality, there are several levels of grey, not everything is either “black or white”.
When managing a currency, such as or a stable coin pegged to the dollar, all players usually have a high level of interest and therefore are ready to pay a fee. But in other cases, for example with loyalty points or discount coupons, the interest of who creates the game (the issuer) is higher than the stake of who uses it (the customer). So, the first is more inclined to pay and sustain the network. In this case, a minor level of decentralization is enough in exchange for superior speed and cheaper fees. Hence, why try to overload a such as to manage “silly points”? Best to use as digital gold and preserve it.
So many Blockchains emerged in recent years, some have real-world applications, some are just pure research trials and some are “scams” ….. but for different needs, different solutions are required. There’s not only , even though is fundamental for the ecosystem, but let’s have someone else manage CryptoKitties’ collectibles.
The topic is complex, but the technology is extremely powerful, what we need are good architects and honest projects. The market will enforce its selection and decide what to use and why; there isn’t a superior authority that can decide in its place.
I’ve been working on the Noku project for more than two years now. We created a platform that allows its users to create and manage their , without having to be expert developers and just focusing on their own businesses. The platform is called Tokenraise and it’s already live on . It enables creation on the and soon even on and Qtum. Furthermore, we developed two Blockchains, one for financial applications (NokuBit), based on the ’s economic incentive; and one for industrial applications (NokuChain), with immediate and free transactions.
In our industry ( and ), there are infinite debates and very divergent positions. Paradoxically this is a sign of increased maturity. Every sector, being it a market, a political movement or a religion; tends to divide itself in smaller niches when it starts growing. It enforces what has been defined as “speciation”. In any case, no scientist, politician or central authority official will dictate the of this or that technology and not even this article. In the end, only the sum of choices made by individuals that take part in the market’s economic processes will ensure the projects’ success. It’s what we could define as human action (to quote one of the best economists in history, Ludwig von Mises).
But one thing is certain, the Economy is here to stay and will change the world as we know it today, forever.
Published at Tue, 29 Jan 2019 02:19:01 +0000
