The Story So Far

Hi folks, my name is Adam B. Levine, I’m the founder of Let’s Talk Bitcoin and the CEO of Tokenly. Three years ago I started the Let’s Talk Bitcoin show with the intent to broaden the conversation from the current and future price of the bitcoin token to the much more interesting topic of what had, or was becoming possible now that the primordial fire of cryptocurrency had been lit and were beginning to burn on their own.

From early on the value proposition presented to us as the future of bitcoin was one of smoother, less expensive cross border transactions and a new level of privacy in your finances. Ironically, even though we find ourselves in a world that seems perfectly suited to making those things important, the vast majority of people really don’t care.

Proof of Participation & The LTBCOIN Rewards Program

In the winter of 2013 I came upon the idea to use a cryptocurrency as a rewards program where instead of using your computer to computationally mine, your actions in the community would be tracked and you’d be awarded proportionally based on your contribution during the past week. When people are first getting interested in Bitcoin, the “Can I mine” conversation always comes up, and for the first few years of Bitcoin the answer was “Yes, install Bitcoin on your computer and earn some bitcoin by helping the network.

But there’s a flaw, the Bitcoin mining reward can only ever be won by a single miner. It doesn’t matter if there are four active miners or a hundred thousand. Each block, it’s a new race between miners where the first place winner gets the prize and everybody else has to try again to be that lucky one.

In contrast, the Proof of Participation metric along with a few others gave us the ability to do what Bitcoin mining never could and each week award literally everyone participating.

Adam B. Levine speaking about LTBCOIN and Bootstrapping at the Institute for the Future in Spring of 2014

LTBCOIN showed me that with the tools available we could now create a token that shared almost all of the beneficial aspects of bitcoin, yet it could be branded specifically to a company or project, created as needed at basically no cost and even used in the same wallet as Bitcoin and almost any other token built on it.

The problem with LTBCOIN became clear, when you give away a token for free it’s very hard to then turn around and offer something valuable in exchange for it. Lacking a valuable token, what’s the point of owning it?

“The New Token Economy Introduction” talk from the New Context Conference, November 2015

Laying the Foundation

Tokenly creates modular tools that let people do all of the things you’d want or need to do to use a token in your business. Tokens are useful as un-fakeable gift certificates, swappable passwords, transferrable rights and really anything where you want to represent digital ownership. Beyond what the token itself does, businesses need to be able to issue, customize, distribute in mass, buy and sell, accept as payment and even more for their token to work.

For the last two years we’ve been focused on building those basic tools and late last year we finished that foundational step.

Since then the challenge has shifted, with the work we’ve done we can go after any of a dozen attractive market opportunities. The one we settled on is Rewards Based Crowdfunding.

Old Paradigm Problems with Crowdfunding

Rewards Based Crowdfunding is the kickstarter style of threshold based crowdfunding. Bob has a great hat design but doesn’t have the money for his first production run. In the old days he’d get a small business loan or sell part of his company.

Rewards based crowdfunding gives Bob the option to present his hat design directly to his future customers. Each potential customer can then become a project backer or supporter of the project by pledging money in exchange for rewards that will be produced once the campaign is successful. A campaign is considered successful once backer pledges exceed the amount needed for the project to go forward. If not enough pledges are received, the project fails and backers never pay anything.

Tokenly connects Successful Crowdfunding Campaigns and Cryptocurrency — If a campaign fails, no reward tokens are ever created. It’s only after successfully raising their stated goal that they gain the mandate to spend that money on their project, and it’s at that point that Tokens become useful.

In the old style of Rewards Based Crowdfunding, a successful project thanks its backers and writes their names down on a glorified list of what they owe to whom. Rewards can’t be transferred because the campaign doesn’t want to spend time or risk messing with the list, and crowdfunding platforms don’t want to be responsible either because it puts pressure on site security.

Tokenly / Crowdfunding White-Board Explainer

Solving Problems with Tokenly

With Tokenly, instead of a promise, backers receive their reward as a campaign branded token that is first an access token, connecting the current backer to the campaign for news, updates and exclusive access. And which, once the product is ready, can be redeemed at the campaign's website for whatever reward or perk it represents.

Tokens are, of course, transferrable. That’s their primary attribute. In the old style, if a backer hits hard times and needs a refund, there’s no answer for them beyond “Sorry”. If someone who would have backed the project finds out about it days or weeks after the campaign ended, they’re generally out of luck… And if a business or individual wants to become a reseller or re-distributor of the product, it involves contracts and lawyers, time and money.

With tokens, a backer who needs a refund doesn’t need to beg the campaign. Anybody interested can buy it from them, solving their problem without harming the viability of the project.

Someone who finds out about the project after the campaign has succeeded now has two options, they can buy it from someone who already owns one or even buy it directly from the campaign itself.

Most of the time, crowdfunding campaigns offer discounts to users who support during that crucial pre-success period, but those discounts go away when the campaign ends. Now that rewards are transferable, you can have customers banding together to do group-buys and gift exchanges. People can even start businesses that take the wholesale/retail model online, buying marketable rewards in bulk and then reselling or redeeming on behalf of their own customers. Token resellers profit from products they never take possession of, and which are delivered directly from the campaign to their customer.

Now you or anyone can operate a business with a very limited real-world footprint connecting customers with crowdfunded products. This means that Rewards Based Crowdfunding as a whole now has an entirely new demographic of funders and evangelists who can be motivated at least in part by something entirely new to the sector— a profit motive.

Partnering with and Empowering Crowdfunding Platforms

Our go-to-market strategy is unique, rather than trying to create our own crowdfunding platform empowered by our solutions, we’ll partner with existing, already successful platforms, providing our solutions and tools as co-branded merchant services and generating revenue for crowdfunding platform long after the campaign has ended.

Each platform we partner with becomes a steady source of new, valuable tokens that are issued by real companies already validated by their first customers. Once a product is represented as a token, there’s no reason to stop and plenty of reasons to continue.

As time goes on we’ll see the number of real, valuable tokens, supported by successful companies that have nothing to do with cryptocurrency form what we think of as a global distributed barter network, enabling digital Product-for-Product trades between businesses not involving money at all.

Crowdfunding Connect — A Solution First and a Blockchain Later

And finally, all of this means it's possible to connect crowdfunding platforms in a new way. When someone lists a project on Kickstarter, they don’t list it on Indiegogo or any of the other thousand crowdfunding communities. Tokenly’s partner platforms can choose to offer and relist campaigns found elsewhere in our customer network. This means more eyeballs and money for good campaigns, the new ability for the originating platform to earn fees paid by backers outside their community and the new ability for a referring platform to earn fees from good projects that didn’t pick them as their platform of choice.

So those are the basics. This is the best opportunity we see, with the most to gain, the shortest path to success, the biggest potential to actually change the world and all the pieces in place to push.

Tokenly, Inc. Online Equity Pitch Launches Today

To this point, Tokenly has been a self-funded and developed by part-time-founders. We’ve accomplished a lot but have reached the point where the project needs to grow to deliver on the vision.

Today Tokenly, INC launches an Equity pitch open to qualifying investors on the BankToTheFuture platform to fund the next phase of our quest and bring useful, valuable tokens to everyone.

For more information visit our Pitch Page