Creating

The creation of new things on chains will have value. Selling them to people who want them will generate hashflow. Making these unique tokens takes a lot of effort. You have to get a community of people to agree to their value.

Creating scarcity in the kittie.

CryptoKitties helped accelerate a wave of experimentation around these created items. There are many more models popping up. For example, Nexus Mutual is creating a factory for insurance contracts that will live on Ethereum. The creation process of these agreements will involve a lot of effort. The system will generate hashflow by selling the agreements and processing the payouts.

Mutually assured construction of reassuring insurance.

Exploring the experimentation

There is an explosion of new models on the interchain. I have only listed a few of them here. My hope is that I have convinced you that this is an incredibly exciting and fast-moving area. Lots of large businesses are going to be built on top of these open economic protocols. The next question is: what form will these businesses take?

Discounted Hashflow

As projects earn hashflow, they can convert this into government issued money like dollars to generate cashflow. This can be stored in closed source banks and accounted for using traditional tools for running a company. Today, miners need to convert their hashflow into cash in order to pay for hardware and energy. Over time, I expect that more projects will keep their entire operations on-chain. The flow of hashflow into and out of their project will never touch the closed source financial system. This has really interesting implications for how business on the interchain will be done.

When this happens, you will be able to run a discounted hashflow analysis on the tokens that capture and control the organisation’s revenues. These are typically known as Distributed Autonomous Organisations. I find that this term is very confusing to a lot of new people and it has been irreparably damaged by TheDAO hack.

Joint-Token Communities

The joint-stock company has unlocked a huge amount of human potential. People and capital mixed together to start new companies. Successful projects would deliver a return to investors by delivering positive cashflow. Companies have been the most powerful organising unit for humanity so far. They are incentivised with cash and stock. Today, enormous digital communities are starting to emerge which are more powerful than companies or governments. They are incentivised with tokens.

There is a new “dark matter” rising that manages to coordinate a galaxy of people, and it is the ability to create new schelling points of coordination anchored into a shared, decentralized truth using blockchained tokens.

These communities already exist at the protocol level. The proponents of Bitcoin, Ethereum and all of the other competing protocols have their own cultures.

I think we are going to start seeing more communities developing around products. In the traditional world, you can see this with companies like Apple. They have a rabid fanbase of developers and evangelists who love the objects they make. This is about to be supercharged when any customer of a product can easily buy a share in its future hashflow. These communities will own part of the product and benefit from its improvements and growth.

Share tokens

When you buy shares in a company, you have a claim to its value and future cashflows. If the board decides to pay you a dividend, you will actually receive a portion of that claim as real cash.

Buying into a community-owned product should give you a claim to its future hashflow. Companies are divided up with voting and non-voting stock. Communities could be divided up with governance tokens and share tokens. CEOs of public companies are accountable every three months. The leader of a community project could be subject to the vote from the community every three years.

This tweet was inspired by Lawson Baker’s observation about PDFs on the internet.

There is a big security token boom about to happen. I think it is going to be an enormous distraction from the more interesting trend. On-chain share tokens will have crypto-economically enforceable claims to future hashflows.

Toke: Share Token for interchain hashflow.

These new digital companies will not live in any country’s jurisdiction, they will be started on or uploaded to the public interchain of value. These projects will have a presence in multiple countries in the form of a company but the value will be accruing at the share token level. All of its important revenue-generating functions will begin as hashflow and a portion of that will be converted to cashflow.

He is firmly set on this opinion.

This new kind of organisational structure will blend many of the elements of companies and protocols together. Distributed Autonomous Corporations will be formed and fuelled by online communities creating online companies.

Balance’s Distributed Autonomous Bank

At Balance, we are buidling tools to help people access products on the open source financial system. We want to help our customers transact, store, save, stake, exchange and borrow digital capital. Some of these activities will generate significant hashflow. Today, that capital is being stored in a set of wallets that are controlled by people who are employed by our company. In the future, we hope to migrate the control of that hashflow to a community-owned organisation that lives on a protocol. All of our current investors who own shares of the company will become owners of tokens in the community. This will effectively be a Distributed Autonomous Bank. It will mix properties of protocol governance and credit union decision making to ensure that the customers get great products and the management of the project is held accountable.

We want to create positive hashflow for everyone involved. Like Snoop Dogg.

Owning a share in a distributed autonomous bank should be valuable if customers find the services it provides useful. As the project grows, we hope to offer services across the world in many different languages. We are even dreaming of what a Balance bank branch might someday look like.

Imagine having a beautiful, helpful bank branch.

Free Open Source Bankware

We think that open source software creates enormous amounts of competition for closed source companies. Linux completely knee-capped Microsoft’s growth by offering a free kernel. The combination of GNU, Linux & Apache helped the internet take off. This documentary captures the incredible battle and how it all played out.

We believe that the banking system is going to suffer the same fate as the operating system. Open source software is going to viciously compete with and undercut every single service the banks offer.

We need a password reset protocol.

There are loads of missing pieces to this becoming a reality. Thousands of missionaries are gathering together to take on different parts of the project. Our contribution to this common goal will be to focus on the interface.

We think that exchanging and lending on Ethereum will drive most of our hashflow.

Hopefully this gives you a good overview of how we view the world. We want to make great products for these incredible new protocols.

If you would like to HEPL us, there are loads of ways to do that:

Test our software: http://balance-testflight.herokuapp.com/

Join our forum: https://spectrum.chat/balance

Contribute code: https://github.com/balance-io

Follow us: https://twitter.com/balance_io