Economic forces are everywhere. They shape and structure our everyday lives. It’s how we organize people, resources, and technology to create and exchange value within society.
During the modern era those forces came to be channeled and structured within a particular set of centralized bureaucratic institutions based around the nation-state and the enterprise.
But today the proliferation of information networks is unleashing constrained economic forces.
Through ledgers and blockchain technology, the most fundamental rules governing our society are now open for redefinition, as was prior to the industrial age.
As advanced economies move out of industrial production and into a new form of global services and information economy, the economic model of the industrial age is becoming eroded.
This emerging global information and services economy will be coordinated through the internet running on an updated set of protocols that provides the secure distributed infrastructure for this emerging global token economy.
This transition builds upon major trends that began in the late 20th century which are today converging in powerful new ways. Privatization and globalization, financialization and the rise of online platforms are all converging as blockchain networks merge economics and information technology to take us into a new economic paradigm.
- Privatization opened up more spheres of activity to markets.
- Globalization expanded those market around the world.
- Financialization connected up our real economy into an integrated information-based financial system.
- The platform economy created new forms of user-generated networks.
Blockchain brings these trends together in synergistic, powerful new ways.
Hence, a new economic system is being established; one that is truly global, that reflects the underlying logic of services. This will be an economic model that is for the first time in harmony with its underlying technology of information.
These emerging token networks offer the potential to unleash a massive wave of creativity and innovation.
With trillions of dollars set to migrate to this global cloud computing and blockchain infrastructure in the coming decades, the stakes are high.
Financial and economic sovereignty appear to be slipping out of the fingers of nation states.
And the tensions are mounting.
Are we moving into a lawless chaos? Or are we moving to a historically new level of economic organization?
That will be decided by our capacity to understand this new economic paradigm coupled with our ability to design and develop new token networks of synergistic incentives.
Rethinking how we organize economic production and exchange is one of the major challenges and opportunities. Token economics is an opportunity to revisit the foundations of economic organization.
It’s an opportunity to reconstruct a new form of economy that is different from the industrial model that we know so well.
It’s an exercise that is of critical importance to the development of a sustainable model to economic development in the age of information, globalization and billions of people wishing to join a worldwide economic system, which is already showing major signs of stress.
This is no longer about politics, policies or protesting, the technology is reaching a maturity. We now stand at a point where we can design economic systems from the ground up. The success or failure of such systems does not rest with the actors in the network, but squarely with the design of the system.
Possibly for the first time ever, if we don’t like the prevailing economic system, we now have the option to design a better one.
What is so powerful about this revolution is that it is not really driven by idealism or politics but rather economic incentives. The global economy will switch to being based upon distributed blockchain networks with each actor seeing it as in their economic interest to do so.
This revolution does not require large-scale political coordination. It bypasses it. Instead, it employs a highly modular and granular transition.
Specific parts of the existing economic institutions can be upgraded and integrated into a new economic model.
Yet, this will be a profoundly disruptive transformation.
Enterprises will be automated. Whole industries will be upended by powerful new blockchain ecosystems. National governments will face mounting pressures from a global information services architecture.
This new economic paradigm promises the potential to build new forms of economic organization to deliver what people value.
It promises a more open and inclusive model that harnesses the efforts of the many instead of the few.