The Future Of Currency: Time-Based Asset Tokens and Experience Coins
The proliferation of cryptocurrencies has caused many to question the very definition of currency. The introduction of user-created assets, network tokens, app coins, and other Bitcoin 2.0 jargon represents our attempt to name something similar but somehow different than currency. Bitcoin itself has many attributes that fit the definition of currency, and yet, many of its attributes do not resemble currency at all.
Regardless of the terms used to define a currency, currency does not have value in and of itself, rather, its value is a reflection of its function. For example, the dollars in a person’s bank account don’t have value per se. What gives those digits value is their function: the ability to obtain goods or services at sometime in the future. If a bank account balance is also earning interest, then the income generation comes into play. Fair enough. However, if function is really the most important aspect of any currency, we should be focusing on function, not value, in our creation and use of new cryptocurrencies.
Market Based Currencies versus Time Based Currencies
With the advent of Mastercoin, Counterparty, Bitshares, Dogeparty and other blockchain-based crypto-platforms, almost anyone can instantly create a currency, asset, or token (let’s refer to all of them as tokens for simplicity sake). But merely creating a token does not give it value. For some tokens, like with bitcoin, the value is determined by buyers and sellers. Bitcoin is therefore an example of a market-based currency. However, what could become even more powerful than a market-based currency is a time-based currency (or, alternatively, a time-based asset, event token or ticket coin).
This post was published at Lets Talk Bitcoin on January 12th, 2015.