Blockchain technology with it’s integrated private key cryptography revolutionized what digital ownership means. The first application is money, but the tokenized economy needs to evolve in a more nuanced system that can perform multiple functions and facilitate complex forms of economic communication. The more forms of economic collaboration we are able to automate in a decentralized way, the more opportunities for people to work together and produce growth. One of the key aspects we need to focus on when developing these new technologies is to facilitate collaboration as much as possible, working together needs to be easy and intuitive to the extent it can be done by a 12-years-old on a phone. There are several steps until this scenario unfolds because we are only at the beginning of this journey and more than 90% of the functions needed have not been invented yet, but we are getting there.
One of the more democratic ways in which tokens with monetary value have been used is for project funding in the form of Initial Coin Offerings. Different projects would create an integrated token which would be sold in order to raise the money needed to develop the product, and investors would buy with the possibility of later selling that token at a higher price on the market. This created a new worldwide economic collaboration model based on digital assets and literally opened the door for a more inclusive and democratic global funding mechanism. And as with all new economic paradigms, there has been a lot of speculation, mainly due to the immaturity of the emerging digital assets market. Although there have also been a lot of scams in the space, this is something any class of new investors needs to navigate and steer clear of and this says more of human nature than the economic mechanism at play.
But, although Initial Coin Offerings are a step in the right direction regarding access and opportunities of investment, there is something to be said about the speculative nature of this phenomenon. Because most of the investors are looking for the future financial gains, their goal is to buy low and sell high and this means that there are winners and losers. Although there is collaboration in funding the project, after the coin is listed on an exchange the token holders are incentivized to compete with each other and try to sell at the highest price, disregarding the other holders and the project itself. And although the actors at play in this market have total autonomy over their decision of what is an acceptable risk and face the consequences, the fact that there must be losers for this game to work is a reality we must face and to which we need to find a counterbalance.
Most probably the monetary use case for blockchain technology was the best way to start of the space because it got the most attention, but we need to move things forward and create new ways of collaboration that don’t end up in a competition that produces losers. We need to leverage this technology in the direction of a collaborative economy because as opposed to speculation, collaboration yields results that can be beneficial to all the parties involved and is able to create sustainable long-term growth. This post seeks to “tweak” the Initial Coin Offering funding mechanism and provide a more sustainable and community friendly way of setting projects in motion and then contextualize it in the Ressolid project.
Access Token Offering
The blockchain security model can be applied to all sorts of tokens, not necessarily with monetary value, and one type that can be very easily integrated is an access token. We can create a key that does not give you access to your funds, but to a service or product you are invested in.
An Access Token Offering (ATO) would work roughly like an Initial Coin Offering (ICO), but instead of getting a token with a monetary value you would get an access token. As an example let’s take a project that wants to create a for-profit online game, they would be able to create an access token that permits lifetime premium membership and sell that token as a way to fund the project; and if people like the idea of the game they can sponsor the development and also get full access to the future game. As opposed to ICO’s that attract investors which mostly put their profitability above all else, an ATO would attract investment from people with a long vested interest in the product or service and this creates a superior community effect that can boost the chances of the project succeeding.
Another such example of economic collaboration would be in the Non-Governmental Organizations sector. A cause could be funded by an access token that grants decision-making status to the investors through voting, thus people that want a certain problem fixed can fund the solution and also guide it in the direction best thought suited.
This token concept has good versatility because depending on what type of access is granted, you can generate a different community effect to move things in a certain direction. And the key benefit for this approach is that ATO's are based on a type of collaboration that if successful, can create a situation in which all parties involved are in a winning position, no more losers and winners. This does not guarantee the success of any project but is a step in the direction of a collaborative economy.
Ressolid and the Access Token Economy
Ressolid’s mission is to create a global, blockchain based, digital trust analog; we seek to create an app that can organically hold identity, skill set, and reputation. We believe that these are the three main ingredients of trust and the more trust in a society, the more cooperation which in turn fosters innovation. But it’s not enough for the app to hold these three pieces of information, we need to create an environment in which they can be used; basically, we need to create a collaboration interface that facilitates human interaction. And in order to increase the chances of the project to success, we need to leverage as many aspects of the token economy as possible.
The possibility of creating access tokens directly in the app would facilitate collaboration in several ways. One could use it in the form of an Access Token Offering as discussed above, but the major innovation when access tokens meet the Ressolid trust mechanism is that communities can create projects that address their problems, people could pull together and fund endeavours that can deliver products or services and the focus the quality, rather than profitability.
Let’s imagine that a group of people want to create a good educational environment for their children and the state sponsored educational system is not a good choice, but the private system is not that great as well. They could turn to the Ressolid app which would have a community funding option; firstly they would all need to agree on the type of education and the desired quality, secondly they would need to figure out a budget for this and with the help of the app they could find the best suited people to manage and deliver this project to the community. Because this is a community effort to provide the best education, this does not necessarily need to be a for-profit business and you could arguably get a better quality for a smaller cost; as opposed to private schools where profit is desired and people rarely have a say in how things work. Or you could leverage the quality of the service and provide it for a cost to other parents, thus subsidizing the education of your own child.
An access token enabled economy with the skill and reputation mapping provided by Ressolid can create a lot of opportunities for economic collaboration. The key is to make this experience a easy as possible, if we can deliver an interface that can run these type of collaborative project without the need of any outside mechanism, collaborative efforts will most probably skyrocket and empower communities into taking matters in their own hands. We will be keeping a close eye on the tokenized economy in order to find out what would be best integrated in our project, if you have any such ideas please share them with us.