The Blockchain Art Exchange, based in London, is seeking to establish a “more democratic art market.”
The idea is that when a digital artist sells work on the Blockchain Art Exchange they will receive Blockchain Art Exchange (BAE) tokens.
Holders of BAE will receive royalty payments from every artwork sale that happens on the BAE exchange. Hence, the more sales an individual accrues, the larger the share of royalties received. In theory, emerging artists will be supported by royalties from the sales of more established artists.
The sequence is as follows:
1) Submit digital artwork for analysis.
2) The digital work is graded and given an “objective price.”
3) The digital work is uniquely identified with a blockchain certificate to prove authenticity.
4) The digital work can be exchanged instantly on the BAE platform.
Can such an idea be executed for traditional (non-digital) art forms?
Artificial General Intelligence (AGI) is in the process of rewriting what it means to live on planet earth.
AGI refers to the intelligence of a machine that could successfully perform any intellectual task that a human being can.
AGI is a goal of some artificial intelligence research, as well as a science fiction topic.
Kimera Systems, Inc. offers artificial intelligence technology to observe user behavior, context, and derive a common sense set of actions to apply under specific circumstances.
Mounir Shita, Co-Founder and CEO of Kimera Systems, speaks about AGI and a vision of how to develop an economic model that benefits people rather than a handful of powerful organizations or governments.
In this brief video he discusses using token economics and blockchain to pay individuals via the devices they use, which hold data. He says it’s about financially rewarding people for living their lives.
This video outlines a parallel between token economic models and business models. The central idea is that the way business models are designed is to provide value for customers while extracting value for shareholders. In a token model, the design is intended to create value in the token itself and therefore reward those supporting the business, including customers and shareholders.
However, part of the problem of a single-token model is the inherent tension between those who want the token to rise in value, like an investment, and those who simply want to pay for services, as with a currency that maintains a stable value.
Hence, the design of this two-token model is intended to satisfy the needs of two groups: customers and business supporters. This model is comprised of three key principles:
Reward value creators
Align actor incentives
Support business sustainability and expansion
Often blockchains are thought of as a way to disintermediate middlemen. However, some of them add value. Hence, this system is designed to reward all those who are adding value to the business, whether they are creators or traditional middlemen.
This specific 2-token system is designed for music blockchain Emanate. The two tokens are designated as MN8 and MNX.
MN8 is a governance token
MNX is a stable, internal cryptocurrency
Customers don’t care about MN8. They will swap money for MNX and use MNX to pay for services, just like traditional currency.
Different actors aligned with supporting the business will extract value from the system by receiving MNX as part of their provided services, according to pertinent smart contracts. They can then swap MNX for whatever currency they desire through an internal exchange.
However, they will need to stake some MN8 to participate in the system and earn MNX. Hence, they are buying into part ownership. Alternatively, they could be investing in the business itself.
All of the MN8 stakeholders can vote on the direction of the business. Those who own the most MN8 will have the most votes and the greatest vested interest in the success of the business and MN8 token. As the business becomes more successful, the MN8 tokens would be anticipated to rise in value, in the same way the value of stocks rise in a traditional, publicly traded corporation.
Security Token Academy Host, Amy Wan interviews Dr. Stephanie Hurder, partner and founding economist at Prysm Group about token economics and tokenizated assets.
Token economics, also known as crypto economics, is the study and design of economic systems based on blockchain technology.
Hurder express the importance of understanding the rights and governance of what a token provides.
There are two primary types of tokens:
1) Security tokens
2) Utility tokens
The major difference is the intended use and functionality of the tokens. Security tokens are created as investments. Users holding the security token also get ownership of the company.
Utility tokens, on the other hand, are not intended to give their holders the ability to control how decisions are made in a company. They merely enable users to interact with a company’s services.
However, both security and utility tokens can increase in value, hence some people may find it difficult to differentiate them.
Hurder talks about the tension inherent within a utility token when people are desiring that it go up in value, vs the stability required for its use of value exchange.
Token economics includes designing a token as a functioning part of an overall economic platform. In other words, ‘what’ do you tokenize so that everything works well together?
Tokenization is an intrinsic part of the Blockchain technology that serves the purpose of platform identification and accessibility.
For example. Bitcoin is a token. And so is Litecoin, Dash, and other currencies that function over a blockchain. While tokens can represent money, as in the examples above, they can also represent other things.
The demand for a particular blockchain product or service is usually the main determinant of the value and eventual market price of its token. This is why there is a variation in the prices of different altcoins in the Blockchain environment. For example, Bitcoin is more readily accepted by merchants than Litecoin, and is consequently more valuable.
Broadly speaking, tokenization is the process of converting some form of asset into a token that can be moved, recorded, or stored on a blockchain system. That sounds more complex than it is. To put it simply, tokenization converts the value stored in some object — a physical object, like a painting, or an intangible object, like a carbon credit — into a token that can be manipulated along a blockchain system.
Blockchain tokenization is powerful because it has the potential of tokenizing everything from “gas” on the Ethereum blockchain (GasToken), to fine art, real estate, or even “attention” (Basic Attention Token), which have applicability in social media and advertising. There is also the possibility of tokenized governance — making 1 token worth 1 vote in meetings for some organizations.
In October 2017, Matthew Roszak discussed how we’re transitioning from an old model where money is used to equal power; changing to “money becoming technology” via the rise of cryptocurrencies and tokenized assets on the blockchain; and ultimately becoming “technology equals power.”
In brief, a token is a scarce, digital asset. Bitcoin was the first.
Roszak states that Bitcoin is one of the greatest inventions of our time. More specifically, it’s one of the greatest technological, financial, political, industrial and humanitarian inventions of our time.
Blockchain is like the rails for Bitcoins (tokens), which represents the cars that run on the rails.
Roszak discusses how things can be tokenized, not just money, resulting in new opportunities for businesses and entrepreneurs.
Blockchain and tokenization is one of the greatest generational opportunities for entrepreneurs and investors.
He notes how technology generally outpaces regulation and that the early phase of technology adoption includes some risk and uncertainty.
Matthew Roszak is co-founder and chairman of Bloq, a leading blockchain enterprise software company. Mr. Roszak is also founding partner of Tally Capital, a private investment firm focused on digital assets and blockchain-enabled technology with a portfolio of over 20 investments, including Block.One, Civic, Factom, Rivetz and Qtum.
Mr. Roszak is a blockchain investor, entrepreneur and advocate. He has spent over 20 years in private equity and venture capital with Advent International, Keystone Capital Partners, Platinum Venture Partners and SilkRoad Equity, and has invested over $1 billion of capital (from start-up to IPO) in a broad range of industries. Mr. Roszak is a director and beneficial owner of Eboost, Enter Financial, MissionMode, Neu Entity, Onramp, SolidSpace and TrueLook.
Mr. Roszak serves as chairman of the Chamber of Digital Commerce, the world’s largest trade association representing the blockchain industry. In addition, Mr. Roszak serves on the board of BitGive, a no This talk was given at a TEDx event using the TED conference format but independently organized by a local community.
