Modern technology allows people to communicate directly. Voice and video calls, emails, pictures and instant messages travel straight away from A to B. Maintaining trust between individuals no matter how far they are.
When it comes to money, people must trust a third party to be able to complete a transaction. Blockchain technology is challenging this in a radical way, by using cryptography, providing an open decentralized database of every transaction involving value. Money, goods, property or even votes. Creating a record whose authenticity can be verified by the entire community.
The future global economy will move towards one of distributed property and trust, where anyone with access to the Internet can get involved on Blockchain based transactions and third-party trust organizations may no longer be necessary.
Everyday people own more tokens, exchange and consume them. A token has a lot of use cases. Let’s name some of them:
Crowdfunding, Rewards program, Bond issuance, Derivatives, Stock certificates, Tickets, Voting system, Ownership, Access to rental cars, Membership and Subscriptions, Software license among others.
But how I really understand Blockchain? More than talking about this huge distributed ledger, the nodes, smart contracts, secret store, no Alice neither Bob here… Let’s simplify it, let’s put it in context.
Say you have a Super Bowl ticket and for some reason, you cannot make it to be there, so you want to give the ticket to a friend. Either you meet with him or you must send it. These would be two possible choices:
- Make a screenshot of you QR code and send it to him.
- Send the email that the company sent you with the ticket.
Whatever option you choose, through Internet you cannot send value, what you are sending is a copy of another copy of the copy of your original ticket:
- The company sent you the ticket via email. That’s copy #1.
- You send that email to a friend. A copy #2 will be on the Delivered folder.
- The #3 copy may be the one that arrives in your friend’s inbox, if in the middle there are no intermediaries.
That’s what Blockchain solve. You can send value through Internet, you can have control about what you are sending. The ticket for the Super Bowl has attached an ownership token which can be sent directly to another person.
It’s time to build the bridge between the old and the new economy.
Even though you send some money to your brother, you are still being the owner of that money.
So, how value can be sent through money? Is it possible to attach value to a token? The money won’t be just digital cash instead they can be smart money.
As I wrote in my last article there are different types of tokens, but those are just assets, stable coins or new currencies that want us to think they are the new Bitcoin. The smart money are tokens that can be controlled by an owner.
How that really works?
Let’s put a familiar example. We build a token in the Ethereum Blockchain, which must fulfill some conditions provided in the Smart Contract.
The owner of this token can be both parents. They decide whether the money can be spent. The Smart Contract will follow the given instructions to know when the token can be spent or not.
Imagine that your son is travelling, and you receive a notification that a payment has a higher cost than usual, one of the parents can accept or reject it. The same currency, until your son turns 18, can be used as a family ecosystem. Which can be used as a vote within family decisions or common purchases. The ownership of that smart contract can be transferred in time.
It also fits in a corporate ecosystem, for example. It can be built a token that is consumed within a company, which can be exchanged for a bonus, necessary to book a meeting room, buy food or drinks, to access to the gym among others.
That’s just as an illustration of what can be created through Blockchain. A token has multiple uses but when it comes to money, you can be your own bank, so let’s build something smart. Now that we know that money can fulfill some conditions, let’s think intelligently and help to create a new sustainable economy with this technology.