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Tokenomics
The Crypto Shift of Blockchains, ICOs, and Tokens
Sean Au, Thomas Power
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eBook - ePub
Tokenomics
The Crypto Shift of Blockchains, ICOs, and Tokens
Sean Au, Thomas Power
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About This Book
Explore the differences between ICOs, cryptocurrencies, and tokens (offerings), enabling the reader to understand the ICO landscape, how millions were raised in minutes, and where the future of the tokenized economy is heading. Take a real-time journey, cutting through the myths, understanding token choices available to everyone.
Key Features
- Interviews with key figures in Tokenomics
- Unbiased evaluation and comparison of the different offerings
- Conceptual analysis of the market's reaction
- League table showing current exposure
- An account of the theoretical and current legal foundations of alt coins and tokens
- A complete introduction to the phases of an initial coin offering
Book Description
Tokenomics is the economy of this new world. This is a no-holds-barred, in-depth exploration of the way in which we can participate in the blockchain economy. The reader will learn the basics of bitcoin, blockchains, and tokenomics; what the very first ICO was; and how over a period of 5 years, various projects managed to raise the enormous sums of money they did. The book then provides insights from ICO experts and looks at what the future holds. By comparing the past, current, and future of this technology, the book will inform anyone, whatever motivates their interest.
The crypto shift of blockchains, ICOs, and tokens is much more than just buying bitcoins, creating tokens, or raising millions in a minute in an ICO. It is a new paradigm shift from centralized to decentralized, from closed to open, and from opaqueness to transparency. ICOs and the creation of tokens during the craze of 2017 needed a lot of preparation, an understanding of cryptocurrencies and of emerging legal frameworks, but this has spurred a new movement to tokenize the world.
The author gives an unbiased, authoritative picture of the current playing field, exploring the token opportunities and provides a unique insight into the developing world of this tokenized economy. This book will nourish hungry minds wanting to grow their knowledge in this fascinating area.
What you will learn
- The background of ICOs and how they came to be
- The difference between a coin and a token, a utility and a security, and all the other acronyms you're likely to ever encounter
- How these ICOs raised enormous sums of money
- Tokenomics: structuring the token with creativity
- Why it's important to play nicely with the regulators
- A sneak peak into the future of ICOs from leaders in the industry
Who this book is for
With the media hype about bitcoin, this book appeals to anyone, from those with a general interest in anything crypto, or those with some knowledge of the nuances between cryptocurrency, ICOs, IPOs and the Token economy.
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Tokenomics
Table of Contents
Tokenomics
Thomas and I
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1. Once Upon a Token
A network of markets
The Internet of information
The Internet of value
What is tokenomics?
Micro and macro
First occurrence of the word
The token economy
What does the current tokenized economy look like?
What is tokenization?
The tokenization of everything
Summary
2. A Bit of Coin Theory
Bitcoin – in the beginning
DigiCash
E-gold
B-money
Bit gold
Liberty Dollar
Why did Bitcoin succeed?
How was Bitcoin born?
Trust
Decentralization
Transparency
Consensus
Other ways to achieve consensus
What is Bitcoin?
What is a coin?
Mining Bitcoin
Is Bitcoin money?
Open source
Alternative coins (Altcoins)
Namecoin – the first altcoin
Litecoin – the silver to Bitcoin's gold
Pre-mining
Primecoin – finding new prime numbers
Other altcoins
Lessons learned
Blockchain – the immutable database
The definitions
ISO/TC 307 – Blockchain and distributed ledger technologies
What is a distributed ledger?
What does a blockchain look like?
Storing information on the blockchain
Op Return
Scaling
IOTA
Coloring bitcoins
Smart contracts: are they that smart?
Smart contracts in Bitcoin
Script
Ethereum
Smart contracts in Ethereum
What does an Ethereum smart contract look like?
The most unfortunate famous smart contract – the DAO
Fees in Ethereum smart contracts
The peak of ICOs
Participating in an ICO
The fastest ICO raises
Network congestion
The Useless Ethereum Token
Summary
3. The Potential of ICOs
What is an ICO?
The ICO acronym
What is a token?
The difference between coins and tokens
Different types of tokens
Cryptocurrency coins or payment tokens
Utility tokens
Security or asset tokens
Common ICO terminologies and acronyms
ERC20/EIP20
Changing the promise
The dot-com versus dot-coin bubble
Market capitalization
Circa 1994 and email
Celebrities
The numbers
Bitcoin versus the Nasdaq
The bust
Risk in ICOs
Infrastructure
Education
ICO road maps
Working with new technologies
Token saturation
Community saturation
Greater fool theory
A new era of ICO innovation
Innovation in the ICO mechanism
Going private
Well-known advisors
Creative discounting
Second round
Innovation in ICO ideas
Health tokens
Digital identity
Supply chain
Energy
Summary
4. Token Varieties
ICOs on the Bitcoin blockchain
Omni (OMNI) (formerly MasterCoin)
MaidSafe (SFE) on Omni
Tether on Omni
Counterparty (XCP)
Storj (SJCX)
Factom (FCT)
Ripple (XRP)
How did Ripplepay work?
When was Ripple created?
Funding
XRP coin
The purpose of XRP
ICOs on custom blockchains
Nxt
Ethereum
Lisk (LSK)
Waves (WAVES)
Tezos (XTZ)
NEM (XEM)
Side note – proof of importance
ICOs on the Ethereum blockchain
Augur (REP)
ICONOMI (ICN)
EOS (EOS)
Bancor
ICOs on non-blockchain technologies
IOTA
Hashgraph
Summary
References
5. The Need for a Token
The purpose of a token
Thought experiment #1 – monetizing excess digital storage
Thought experiment #2 – monetizing excess processing power
Thought experiment #3 – payment cards
Thought experiment #4 – messaging platforms
Thought experiment #5 – decision-making platforms
Did these ICOs really need a blockchain?
SaaS analogy
Types of companies running ICOs
Existing companies running ICOs
GameCredits (GAME)
Kin from Kik (KIN)
Brave's BAT
Eastman Kodak Company – KODAKOne
New companies running ICOs
Humaniq
Other new companies
Critical considerations when creating a token
Step one – the purpose of the token
What does the token do?
Side note: multiple tokens
Step two – existing token or custom token?
Token tools
Step three – do you need a blockchain?
Side note: public or private blockchain?
Resources
Coinbase
ConsenSys
Public Trello board
Token questionnaire
Summary
6. Playing by the Rules
Security tokens and the SEC
What is an investment contract?
The Howey Test (US-based companies)
US citizens
AML/KYC
SEC statements
Global stance
Singapore (http://www.mas.gov.sg/)
Canada (https://www.securities-administrators.ca/)
China (http://www.pbc.gov.cn/)
Switzerland (https://www.finma.ch/)
Hong Kong (https://www.sfc.hk/)
Australia (https://asic.gov.au/)
South Korea (http://www.fsc.go.kr/)
Estonia (https://www.fi.ee/)
Europe (https://www.esma.europa.eu/)
United Kingdom (https://www.fca.org.uk/)
New Zealand (https://fma.govt.nz/)
The SEC comes knocking
The DAO
Harbour
Protostarr
PlexCoin
Munchee
Foundations
Crypto Valley
LLC, Ltd, GmbH
The evolution of white paper legality clauses
SAFT
Summary
7. The Token Sales Mechanics
Token supply and distribution
Distribution
EOS distribution
The presales strategy and bonuses
No bonuses
Case study – Civic
The Civic App
The Civic token
Cryptobeer
Kyber Networks
Bonuses
Ethereum
Waves
FirstBlood
Humaniq
TenX
Tezos
Synereo
NEM
Presales or pre-ICO and private sales
OmiseGo
Simple Tokens
Telegram
Vesting periods
Hard cap, soft cap, and no cap
Uncapped ICOs
Ethereum
Tezos
Capped ICOs
Soft cap
Hard cap
Hidden caps and presales: Aragon
Dynamic ceiling – Status
Reverse Dutch auction – Gnosis
Token mechanics considerations
Summary
References
8. White Paper, Website, and Team
The white paper
Other colored papers
Yellow paper
Grey paper
Green papers
Light paper
Mauve paper
First-generation white papers – lots of maths
Second-generation white papers – color
Third-generation white papers – project timelines
Fourth-generation white papers – the executive summary
White paper content considerations
Website
What is this and how does it work?
Token details
Blogs
Team
The hacker, hustler, and hipster
Advisors
Summary
9. Social Media and Influencers
The deeper meaning of being social
What is social media?
How has social media arisen?
Why is social media important?
Your brand, your voice, your face, and your profile
Organization
ORS®
Open
Random
Supportive
ORS® and social media
Case study: Thomas Power
Twitter
So what does the future hold?
Where is social media going?
Social media in ICOs
Factom
Influencers
People are more interested in who you are than what you do
What's the relationship between influencers and ICOs?
Influencers in the crypto community
YouTube influencers
Ian Balina
Influencer ICO platforms
Kylie Jenner
Summary
10. Marketing and the launch
The state of ICO marketing
Don't underestimate the workload
Key campaign elements and phases
Build-up to brand/site launch
Build-up to seed funding (private pre-sale)
Build-up to the public ICO
Post-ICO and ongoing community development and engagement
The message and tools
Quality of the brand and the presentation
Mind your grammar
Products with real users
Pay-per-click
Alternative social media
Telegram
Email marketing
The community
Partnerships
Public relations
Networking into investor groups – without this, the ICO dies
Bitcointalk
Bounty campaigns
Signature campaigns
Airdrops
The launch
ICO listings and ratings
Events
GDPR and marketing
Summary
11. Voices of the ICO World
ICO expert voice – Nick Ayton, founder 21Million TV, Chainstarter
ICO expert voice – Jonathan Fry, CEO TeamBlockchain, and member of the British Blockchain Assoc...