I've led some exciting projects in my career, but I’ve never been as enthusiastic as I am now, running a company at the forefront of the emerging token economy. By building the infrastructure to support new marketplaces, we laying the grounds for the economy of everything.
Blockchain technology first disrupted capital markets with incredible valuations in a crazy year of ICOs in 2017. Despite the lack of regulation, the exit-scams, and uncertainty, there were some great projects, and we had a glimpse of what the future could hold when the best investment opportunities are no longer reserved for the few. Some financial institutions have become proactive in their relationship with regulators and are paving the way for a new environment where disruptive innovation is still possible, but with manageable risk.
So, by 2020 we might see a re-emergence of ICOs (or STOs) which could mark the real end of what some have called crypto-winter.
In a previous blog I described some of the exciting use-cases that the blockchain can enable for luxury goods; this entry is about the whole economy.
In other recent signs that blockchain-based services including cryptocurrencies are becoming more mainstream, ATT&T started accepting crypto-payments for its services, and Facebook is reported to be about to launch their own stable coin. Whatever your take on the debate on the future coin’s merits (e.g. lack of censor resistance) Facebook’s fire power with its billions of users will be a boon the crypto and blockchain space by spreading the word. However well Facebook ends up doing with its partners like Visa, Mastercard and PayPal, 2020 will indeed see the debate become ever more mainstream.
I believe the digital value chain for brands will shift from audience to identity and credentials.
High-level economic indicators, unfortunately, show major trend shifts only after they occur, never during the inflexion point, which is where I believe we are. I look forward to checking this post in 10 years!
In the first few months of this year alone, we’ve signed several major deals. We will, for example, be building car wallets for Daimler and deploying our token-based Fintech solutions in a major European exchange. However, don’t take my word for it, things are already changing for technophile younger generations.Trendy young Germans or American freelancers alike already prefer cryptocurrency to regular money.
However, what I’m excited about is asset tokenisation on the blockchain, which is the real unstoppable economic game changer.
As CEO of a young deep tech company, I’m acutely aware that robust economic activity, as we know it, relies on capital. There have been instances where wealth, and hence capital, is created out of thin air, like when states print more and more banknotes. Economists agree that this never ends well. The global recession of decade ago also showed that complex financial structures, when they are too far removed from tangible value, lead to systemic collapse.
That’s one reason why a token economy represents such a significant change.
Blockchain technology and tamper-proof tagging technology enable us to, for example, associate a token to a Heavy Goods Vehicle (HGV), whose whereabouts are always known. A company that owns a fleet of HGVs can use these tokens as the basis of new financial instruments. Tokenising the trucks, grows their value, generating liquidity in the market. Deriving financial instruments from this creates a new market grounded in reality. Diving a single valuable asset into smaller parts offers other advantages beyond the scope of this post.
Tokenisation can be applied to endless examples such as for a community that lives around a lake, funds to create a wildlife reserve on one of its shores could be raised by tokenising the lake itself.
Issuing tokens gives contributors a stake in the venture, which can offer incentives for them to solve the chicken and egg problem arising when creating disruptive models. Tokens can now have a stable value relative to an external reference or become a speculative asset in their own right. They can provide working capital, a store of value or be used as part of a toolset to control the new marketplace.
So we combine strong security with tokenisation to enable the emergence of new marketplaces.
RIDDLE&CODE has had several successful projects in emerging “prosumer” (read the contraction of producer and consumer) energy market. We are experimenting both in our home city of Vienna with our partner Wien Energie, but also in Brazil with EDP.
Just like the Internet pioneers of mid-nineties that laid the foundation for today’s online economy, at RIDDLE&CODE, were an enthusiastic part of the community creating the foundation for the token economy, also known as the economy of everything.