Value Creation Through Blockchain-Based Tokens: Transforming Traditional Collaboration Structures

Money is viewed as a medium of exchange, a unit of account, and a store of value. This article focuses on the “store of value” and rephrases it as “representing potential futures”. Assessing the buying power of one’s money relies on the assumption that the person will be able to buy in the future what he or she can buy today. However, this notion does not consider the impact of an increase in buying potential (through rising productivity) or of a decrease (through external shocks and other structural changes).

In the case of external shocks such as the coronavirus crisis, attempts are made to mitigate the consequences by injecting liquidity into the hard-hit sectors. Yet, we are still faced with the internal devaluation dilemma: All long-term contracts, such as loans and rents, do not decrease even though the reduced payment capacity of the contractual partners requires a downward adjustment. It can take months or even years for such an adjustment to occur, at the cost of a tremendous loss of productivity, which is often accompanied by social unrest.

Digital units, which represent an underlying asset, share or right, the so-called “security tokens”, have the same quality as a currency in regard to their immutability. Therefore, they can function like a currency in this respect. Compared to traditional legal instruments for organizing work products, a security token can very effectively and with no prohibitive contractual arrangements tie the success of a business project to the security token. This means that even an anonymous workforce can participate successfully in a business project and be remunerated by tokens. Today there are liquidity options available which give immediate liquidity to the security token. Security tokens can instigate the production of goods and services, thereby expanding the potential futures for everyone.

Such a (security) token economy allows for a fair platform economy as compared to traditional centralized platforms since the token governance and value distribution can be organized effectively through a token structure including all stakeholders in the process. Achieving the same result with the traditional legal and economic instruments is close to impossible.

Hence, such a security token economy is a valid option for implementation into the Common Legal Platform (CLP).