Token Economy

The study of economics, public choice theory, theory of public goods, and behavioral sciences will be essential for a better understanding, and as a result, also a better design and engineering process of purpose-driven tokens

Purpose-driven tokens provide an alternative to conventional economic systems, which predominantly incentivize individual value creation: private actors to extract rent from nature or from the workforce, and transform this into products, often externalizing costs to society, while internalizing (and maximizing) private profits.

Tokens are used to provide an economic incentive to curate the ranking of information in such a list.

Token Curated Registries (TCRs) are a cryptoeconomic mechanism designed to incentivize the collective curation of public lists or content feeds in a social network.

In the case of Bitcoin, the public good represents a P2P payment infrastructure. In the case of Ethereum, the public good represents a P2P computing infrastructure.

The reward mechanism is based on the assumption that all network actors are potentially corrupt, and therefore the process of writing transactions to the blockchain is intentionally made difficult and inefficient, making it costly for malicious actors to attack the network.

Networks like Ethereum took the idea of collective value creation to the next level by providing a public infrastructure for creating an application token with only a few lines of code.

The idea of aligning incentives among a tribe of anonymous actors introduced a new type of public infrastructure that is autonomous, self-sustaining, and attack resistant

The protocol provides an operating system for a new type of economy that can transcend nation states and individual organizations.