Shermin Voshmgir is Director of Cryptoeconomics Research Lab @ Vienna University of Economics and Founder of BlockchainHub which she started nearly 5 years ago. She recently published a book called the “Token Economy”.

In this podcast Shermin is going to take us through what are tokens and the token economy.

When researching blockchain, Shermin quickly realised that blockchain information was spread out on Reddit, Twitter, Ted Talks and numerous other places but there didn’t seem to be this one central repository of information. Shermin launched BlockchainHub to provide a comprenhsive source of information on blockchain.

To find out more about Shermin you can check out her site Shermin.net.

 
What is blockchain?
Blockchain is the driving force of the next generation internet, often referred to as Web 3.0. It’s not a front-end revolution it’s a change around the data structures in the back end of the internet.  Blockchain allows us to have a universal state layer of who did what and who owned what in terms of values or tokens. This is a completely new way of storing and collectively validating data via ledgers which are collective managed by a public or a federate network.

Blockchain is not a financial technology it’s a governance technology.

 
The Book - Token Economy

Shermin recently published her book the “Token Economy”. For her, tokens are the killer application of blockchain and smart contracts.

With the launch of the internet in the late 80s we had the information revolution. However most people couldn’t access the internet because even if they had a computer they did not have the notion of command line to operate the internet to connect to another computer.

However, when Sir Tim Berners-Lee invented hypertext it allowed everyone with even limited computer knowledge to create a visually appealing website, which anyone could now use to navigate the internet with clicking on links.

Tokens are to the Web 3.0 what HTML was to the web. Smart contracts have made it really easy to create a token with a few lines of code. At the beginning of the web a lot of the initial web sets had a “hello world” message and a bunch of links. One of the earliest use case was the search engine. Tokens are at a very similar stage. Whilst it is now very easy to create tokens most people don’t know what to do with tokens.

 
What is a token?
Tokens have been out for a quite a while. Prior to blockchain tokens have had many use cases from their usage at amusement parks, airmiles, gift certificate, a paper note for a fiat currency is a token, a metro / tube ticket is a token, a casino jetton is a token that can be exchanged for cash. Probably the earliest tokens in human history were shells or seeds that were used as a kind of standardised medium of exchange.

A QR code is a kind of computerised token. Cognitive psychology have used tokens. For example in the 50s there were experiments to use incentive mechanism as kind of positive reinforcement tool to change patient behaviour. Good behaviour at the hospital would be rewarded with tokens which could be exchanged for special access rights to the TV room or a special kind of food at the canteen.

Tokens have three components related to them: