Shermin Voshmgir - Token Economy: How the Web3 reinvents the Internet

Tokens are to the Web3 what websites were to the Web1. With the emergence of the WWW in 1991, Tim Berner Lee introduced a new standard that allowed us to create visually appealing web pages with just a few lines of code, and surf the Internet following links, instead of using command-line interfaces. Back in the early 1990s, most people did not know how to code HTML, or how to create appealing, meaningful, user-friendly websites. It took us almost a decade to figure out how to use webpages beyond the scope of online directories and online billboards, and when we did, the Web2 emerged. Compared to those early days of the Web, we are at a very similar stage when it comes to understanding what we can potentially do with cryptographic tokens. While it has become easy to create a token with a few lines of code, the understanding of how to apply these tokens is still vague. Even though there are already more than 5400 publicly traded tokens listed on Coinmarketcap at the time of writing this book, most of these tokens still lack proper design; many of these might, therefore, soon fail simply because of that.

The technology is still in its early stages, rapidly evolving, with the potential to uproot many industries, in particular money and finance, including government and governance. However, we currently lack best practices, while simultaneously dealing with a myriad of technological and legal challenges. We also lack substantial education around the mechanisms, potentials, threats, and state of the technology, including its socio-economic implications.

Buzzwords like smart contracts, cryptocurrencies, and tokens add to the confusion of what is what. Partial and one-sided knowledge seem to be on the rise, but the big picture of why and how Web3 networks could prove to be one of the biggest game-changing innovations in the years to come is still vague. The media keeps referring to cryptocurrencies, even when talking of non-currency tokens, while reducing the underlying blockchain networks to objects of speculation, instead of focusing on the fact that they provide - first and foremost - a promising governance infrastructure that could resolve many problems of the Internet we use today, such as: (a) the fact that we have no control over what happens with our private data, (b) the lack of transparency along the supply chain of goods, services, and financial payments, or (c) the fact that the Internet lacks an inherent payment settlement layer, forcing us to rely on trusted Internet platforms such as Amazon, Airbnb, or Uber.