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Hello My dear followers!

I have been feeling guilty lately about "neglecting" my blog. When I initially started I wanted to talk about my 2 greatest passion investing and technology. As I got caught up in curating, promo-steem and primarily @promo-mentors, I barely blog which is a shame as I like to share my thoughts (even if they are short) and like to hear what you guys think about various subjects. So from now on I will blog more regularly.

Introduction

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Today's subject will be about tokenization. With SMT being a hot topic, I was thinking about what the underlying utility of an SMT, token creation on the Steem blockchain, could be. There is a difference between tokens and cryptocurrencies. As the media uses these terms interchangeably and honestly when I read about the differences most sources say something a little bit different. But overall they agree on that a token is something more than a cryptocurrency, which is only used as a real currency. A token is tied to something more than a monetary value. "In contrast, a token is a digital asset for dapps within a blockchain ecosystem" [1]. A token is always part of a blockchain like Ethereum and Waves and can be tied to a physical assset or intangible asset, for example with Whopper coin you can buy Whoppers.

So now we have a basic idea of the difference let's focus on the interesting part: what the use of these token are and will it be practical to have a token for everything in the future, we now already have hundreds of tokens, will we able to keep up?

Incentives alligned

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There are many use cases for tokens that are related to tying them up to digital assets, however there is one aspect I want to focus on which is the power to allign incentives. We already see this in Steem, where people work together for the betterment of Steem. Every initiative may it be curation, community building app development all benefit everybody in the Steem ecosystem. By giving everybody the same token for work people will be motivated or atleast hope that the token they receive increase in value.

To me this concept is one of the most beautiful collaborative effect we can achieve with the blockchain. I will illustrate an example where it could be used which I found in a blockchain research.

An extreme scenario would be that a whole economy is represented on a blockchain system. For example, the ecosystem of an online multiplayer game. [1]

In this research they say it's an "extreme case", but to me it's logical that tokens will be used in games, because it will create more engagement for the game. It is true that big multiplayer games already have their own token, but what is different with a blockchain token is that the outside world can trust the token system and it can be used outside the game. This effect also works the other way. When people in the game can trust that the token can be used outside the game, suddenly in game token has more value, and the players will be more incentivized that the game will be successful, because their token will get more value.

Now let's apply this to companies for creating loyalty for their products. This is were it gets exciting. The way product loyalty now works for most companies is that it is basically non existent. If we take our grocery stores as an example, we don't care about the store where we do our groceries daily whenever a new one comes to town and shows much better service and products. Ofcourse this is not always the case if we really love the product or are used to certain services. But usually you can win customers by showing a better product.

Now here comes tokens in to play. Imagine a company like Uber giving out tokens. I personally wouldn't care if Uber were to be replaced by another service if they did a better job and transffering me from A to B. Now what if Uber gave us tokens everytime we ride with them, and these tokens give us right to own a part of Uber (like shares). We would probably be more concerned with the well being of the company because we will lose our tokens if they were cease to exist. Instead of Uber being a normal company to us, we would be co-owners of Uber. How small our stake may be, I would probably treat Uber much differently.

Making people co-owner of a system encourages people to contribute to what the system needs. Like we see in Steem companies can use this to innovate or ask the community to help with problem solution. Tokens allow new economies of resource allocation. In this case we are talking about human resources. [2]

See this video of an EOS presentation from where I got the idea of using Uber and more information about this topic:

Eos.io Link

So, will we have hundres of usuable tokens in the future?

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I think so. The same as we have coupons and airmiles, these tokens could be seen a "collectable". Ofcourse there will be many tokens that will fail, as most are issued just to raise money. But I think hundreds or even thousand will exist in our daily lives. And we won't get overwhelmed by them because it's up to us to choose which token we use. We probably will have a card on which we can all store different kinds of tokens.

I am ready and excited for a tokenized future and I will be looking how I can apply this with @promo-mentors.

Let me know what you guys think about tokens below!

References

[1] aisnet.org
[2] W2.blockchain
[3] Wikipedia