Prior to the advent of blockchain technology and cryptocurrencies, some tokens and a few digital money platforms have existed. But the technological potentials of blockchain have endangered these tokens and digital assets, although they all might be moving the world towards a model of programmable money that embodies an automated internal governance of common resources and fosters participation among the digital token holders’ communities.
Since the inception of blockchain technology, a lot of decentralized applications have been developed, more recently, the developers of these DApps are tokenizing various resources ranging from electricity to bandwidth and also trust checker for online content and advertisements. Although the spotlight has been on the profit that has been amassed through this, the greater goal is the sustainable economic design that will have a lasting footprint on the way things are done. In any case, a community can associate scarce tokens with the rights of ownership to its common resources, thereby establishing control over the usage of token which in turns helps to manage public goods. Through this, money becomes a direct tool for achieving the collective objectives of the community and performs beyond being a means of exchange.
The developers of dApps raised about $1.6 billion or more through 2016 and the first eight months of 2017 through a means called the ICO that was first launched in early 2014. This ICO process involved the giving out of tokens to individuals that participate in a fundraiser. By the end of 2017, the offered coin secondary market trading had resulted in a pool of cryptocurrencies, crypto commodities and crypto tokens that valued up to 95.6 billion in USD as compared to the $7 billion that existed at the start of 2016. Therefore, it became obvious that when crypto and digital tokens are made to perform more than the traditional purpose of exchange, they tend to gain more acceptances.
This occurrence enriched a lot of dApps developers and cryptocurrency lovers and also revealed the crowdfunding model that exists till today. And today, a sort of conflict of interest exists between people who see a change in status quo by the fundraising activity and economic strategy and those who are skeptical about the rising ICO scams and an inevitable regulatory crackdown on the crowdfunding process. However, both opinions require proper consideration. Additionally, if token fans are right, there’s a great deal at stake: a sustainable economic system that will challenge the existing capitalist economy, as tokens will be the fence that exists between products, currency and equity. However, dApps can be modeled such that regulation of behavior towards these three aspects is established. This will allow users to trade access storage across a decentralized network and maintain security for intellectual properties. These apps will program money such that it will combine self-interest and market pricing signals with a system that protects a common good.
Consequently, the implications of incorporating digital money by establishing economic policies and incentives have important and widely applicable effects. The concept is similar to the goal of a circular economy in which involved parties are given incentives to minimize waste and constantly recycle the economic activities to give far-reaching results. Decentralized applications are going to be the major tool for programming money to achieve individual, organization and even community objectives in a decentralized manner.