The Inception of Cryptocurrency

The inception of Bitcoin in 2009 was a revolutionary act that introduced people to the concepts of blockchain and cryptocurrency. The technology enabled the creation of tokenized assets that are transferable, verifiable and immutable, allowing anyone to own and transfer assets across an open financial network without the need of a trusted third party.

Smart Contract and Tokenization

In 2015, Ethereum made its debut with the concept of smart contracts. The concept extends the capabilities of blockchain to a much higher degree, disrupting the fundamental form of human trust and interactions where anyone can use an open network to run program and contractual relationships through code.

One of the most promising concepts spawned from smart contract adoption is tokenization. Differing from traditional cryptocurrency, a token allows for business logic and relationship models to be imbued in the token — providing unprecedented efficiency to value transfer, contractual relationships, and capital management. This not only has the potential for immense impact on modern digital constructs, but also brings several opportunities to revolutionize traditional business models. Since the inception of Ethereum, hundreds of new businesses have been conceived on this new decentralized medium, forming an entire new industry of blockchain-centric companies.

The Age of Tokenized Economy

The adoptions of the tokenization model have been substantial within the blockchain community, and the innovation on smart contracts brings us closer to a more collaborative and fair economy. But to inspire a wider utilization in traditional industries, we need to overcome existing obstacles of high technical barrier, lack of standard, and lack of supporting infrastructure.

Technical Barriers

The process of development and execution of smart contracts is often complex, time-consuming, and error-prone. The demanding requirements of technical expertise and industry experience for blockchain-based development limits its benefits to a handful of groups. These groups, such as early adopters and established corporations financially capable to hire the necessary talent, cover a small spectrum of those willing to explore and incorporate the technology to business needs.

Lack of Standards

The rapid growth of the tokenization ideology spawned a variety of ways to perform token system design and distribution. The chaotic development of the ICO market in 2017 was a testimony to how the lack of standards can put both investors and businesses at risk. It is impractical to expect a non-blockchain-centric business to enter the space and navigate the technology without ending up on a similar path. A standardized process for designing business and value generation models based on crypto-token systems and distribution needs to be set in place.

Economical Infrastructure Support

Once a token is established and deployed. It needs to be fluid on the open market to maximize its potential. However, the interests of cryptocurrency exchanges are not aligned with the interests of businesses. Enormous listing fees and artificial volume inflation are unsuitable for genuine businesses that need a stable, transparent and sustainable marketplace for their tokens.