Token Economy

The current Internet was built around connecting machines, not people. The Internet does not provide a native identity layer for people, institutions, or objects other than the operating nodes in a network of computers. Workaround solutions have been built on the application layer using internal databases (private infrastructure) to manage all the ... See more

The Web2 allowed us to enjoy peer-to-peer (P2P) interactions on a global scale, but always with a middleman: a platform acting as a trusted intermediary between two people who do not know or trust each other. While these Internet platforms have done a fantastic job of creating a P2P economy, they also dictate all the rules and they control the data... See more

Resolve principal-agent dilemma of organizations: Distributed ledgers also provide a global coordination tool for new types of decentralized and sometimes also autonomous organizations (read more: Part 2 - Institutional Economics & Governance of DAOs).

The protocol is a set of rules and processes that define how all the (anonymous) nodes in the network can reach an agreement on the true state of the network. The protocol defines how the participants in the network interact with each other: (i) under which conditions sending tokens from A to B is valid; (ii) the economic rewards for validating tra... See more

While most blockchain literature makes a binary distinction between permissioned and permissionless ledgers, I would like to argue that there is no such thing as “100 percent permissionless.” Every consensus mechanism requires a minimum threshold of investment that one needs to make in order to be able to validate transactions or write to the ledge... See more

Early Proof-of-Stake proposals assumed that those who have more stake in the system have a natural incentive to act in a truthful manner when validating transactions and writing blocks. It was assumed that token holders would have a natural interest in the long-term success of the network; otherwise, their stake in the system would devalue if they ... See more

Furthermore, smart contract security is still an issue that needs to be resolved on a technical level. More sophisticated contractual clauses need to be implemented to make smart contracts compliant with legal contracts, including decentralized dispute settlement mechanisms. While such developments might take more time to mature, some interesting d... See more

As a result of this, users are paying for services with their private data.

Authentication is the process with which a person, institution, or object can prove that they are who they claim they are. A person can authenticate themselves by proving ownership of an object (ID card, hardware wallet, software wallet), knowledge (password or PIN), or by a personal property (biometric data, signature). Often, a combination of the... See more