What’s amazing about the Blockchain is that it’s recreating money.
It’s not just helping transition money from the physical to the digital world. It’s turning money into tokens.
Tokens are a superior form of money.
Tokens are programmable, divisible, and shareable.
You can use a token to request support for something you want to do, and if that something is perceived as worthwhile, you’ll get support from people who
- Want to go all-in on what you’re creating
- Don’t understand (or specificially care about) what you’re creating but want to bet on you
- See the crowd is “voting up” what you’re creating and follow along
- Contribute for purely speculative or uninformed reasons
What’s remarkable is that for the first time anyone can request support through a token for something they want to create and theoretically anyone can participate. I’m not talking about all the scamming that’s going on with ICOs, I’m talking about something more basic.
Yes, we had crowdfunding and kickstarting before the Blockchain and its tokens came on the scene, but this is next level because of the way the Blockchain is engineered and a token is designed with code, math, and some unique intention.
Tokens are the easiest and coolest way to exchange value among all 7.4 billion people on the planet. So eveyone can, and eventually will, participate in the token economy.
The token economy will create more value for all of us, and more quickly, than anything we’ve seen up to this point.
It’s a little strange that the blockchain, and its tokens, aren’t actually that complex, and yet they can seem that way.
If you’re not careful you can veer off into an area like “mining” that leaves the person you’re talking to confused. It’s true blockchains have a lot of dimensions and depth.
But here’s why they’re simple: Think about the idea of a blockchain apart from any technology.
Imagine a big sheet of paper that magically records the details of two or more people exchanging money (e.g., Cameron sends Andre thirty cents).This magic paper knows the identity of each person.
This sheet of paper is also magically owned, and kept, by lots and lots of people and therefore no one can own it. And it allows anyone to see details about the money that’s been exchanged.
So this big piece of paper magically records the exchange of money between people it can identify, the full record is freely distributed to many, many people, and it’s transparent to all. And because the blockchain system is built this way, it’s highly secure.
A token (or cryptocurrency) is special money used for the blockchain, which is exchanged in this secure and open way. In fact, any type of asset, truly anything of value, can be exchanged on the blockchain using a token.
So in a sentence:
The blockchain is an ownerless, transparent, and highly secure way to exchange and record value.
Laura Shin’s recent podcast on “How To Explain Cryptocurrencies and Blockchains” with Jamie Smith and Amanda Gutterman is a great way to explore why blockchains and cryptocurrencies are inherently simple. Highly recommended.