Blockchain tokenization and the public infrastructure

John Weitzmann, Kai Christian Wagner Blockchain-based tokenization
is all the rage. It can be used to build trusted virtual currencies
into any kind of project or enterprise – with a view to providing
the people involved with an objective way to incentivize whatever
is needed, be that computing power, exchange of data or the
involvement in a project in general. To be active in such systems
requires spending tokens that you either buy or earn based on other
contributions. In the Bitcoin system, tokens are issued to “Miners”
that contribute to verifying the blockchain. But the contribution
earning you tokens could also be any other kind of effort, like
editing content or sharing data. Inevitably, this introduction of
currencies brings about the monetary dynamics of economies, i. e.
systems framed by laws (code), organized in markets and governed by
structures that can range from dictatorship to democracy. If we
acknowledge the complex dynamics of economies, questions arise
about the potential risks and benefits of tokenization, especially
where it is introduced to manage public infrastructure. Two such
infrastructures are free knowledge and proof of identity. Both
require a continuous investment into maintenance, but everyone is
free to use them without charge. Projects like Wikipedia run on
volunteers and donations, proof of identity is most often provided
by states, sometimes by companies in exchange for privacy and
personal data. Tokenization could be a new way to ensure
sustainability of this kind of public infrastructure by
compensating stakeholders that contribute to it. It could allow for
new mechanisms to redistribute power and wealth. Or it could create
detrimental patterns of power accumulation and inequality –
something we might not want around public infrastructures. So, is
tokenization good or bad for public infrastructure? In our
discussion, we will shed light on existing models of tokenization
and discuss the future potential for its use in the context of
public infrastructure.   supported by T-Labs