What is Ethereum?


Blockchain technology gained public notice with the advent of bitcoin in 2009.
Bitcoin is a cryptocurrency that runs on blockchain technology and is by far, the most
popular and most ranked cryptocurrency. Ethereum was initially released in 2015.
Within two years of its release, it was ranked the second best blockchain network,
Bitcoin is the first. The Ethereum network acquired more global interest when china
stated that it is the best blockchain network ever created.

What is Ethereum?

Ethereum is a Blockchain network that introduced a built-in Turing-complete

programming language that can be used for creating various decentralized
applications(also called Dapps). The Ethereum network is fueled by its own
cryptocurrency called ‘ether’.
 The Ethereum network is currently famous for allowing the implementation of
smart contracts. Smart contracts can be thought of as ‘cryptographic bank lockers’
which contain certain values.
 These cryptographic lockers can only be unlocked when certain conditions are
met.
 Unlike bitcoin, Ethereum is a network that can be applied to various other sectors.
 Ethereum is often called Blockchain 2.0 since it proved the potential of blockchain
technology beyond the financial sector.
 The consensus mechanism used in Ethereum is Proof of Stakes(PoS), which is
more energy efficient when compared to that used in the Bitcoin network, that
is, Proof of Work(PoW). PoS depends on the amount of stake a node holds.

History of Ethereum

 2013: Ethereum was first described in Vitalik Buterin’s white paper in 2013 with
the goal of developing decentralized applications.
 2014: In 2014, EVM was specified in a paper by Gavin Wood, and the formal
development of the software also began.
 2015: In 2015, Ethereum created its genesis block marking the official launch of
the platform.
 2018: In 2018, Ethereum took second place in Bitcoin in terms of market
capitalization.
 2021: In 2021, a major network upgrade named London included Ethereum
improvement proposal 1559 and introduced a mechanism for reducing transaction
fee volatility.
 2022: In 2022, Ethereum has shifted from PoW( Proof-of-Work ) to PoS( Proof-
of-State ) consensus mechanism, which is also known as Ethereum Merge. It has
reduced Ethereum’s energy consumption by ~ 99.95%.
Features of Ethereum

1. Smart contracts: Ethereum allows the creation and deployment of smart

contracts. Smart contracts are created mainly using a programming language called
solidity. Solidity is an Object Oriented Programming language that is
comparatively easy to learn.
2. Ethereum Virtual Machine (EVM): It is designed to operate as a runtime
environment for compiling and deploying Ethereum-based smart contracts.
3. Ether: Ether is the cryptocurrency of the Ethereum network. It is the only
acceptable form of payment for transaction fees on the Ethereum network.
4. Decentralized applications (Daaps): Dapp has its backend code running on a
decentralized peer-to-peer network. It can have a frontend and user interface
written in any language to make calls and query data from its backend. They
operate on Ethereum and perform the same function irrespective of the
environment in which they get executed.
5. Decentralized autonomous organizations (DAOs): It is a decentralized
organization that works in a democratic and decentralized fashion. DAO relies on
smart contracts for decision-making or decentralized voting systems within the
organization.

Type of Ethereum Accounts

Ethereum has two types of accounts: An externally owned account (EOA), and a
Contract account. These are explained as following below:
 Externally owned account (EOA): Externally owned accounts are controlled by
private keys. Each EOA has a public-private key pair. The users can send
messages by creating and signing transactions.
 Contract Account: Contract accounts are controlled by contract codes. These
codes are stored with the account. Each contract account has an ether balance
associated with it. The contract code of these accounts gets activated every time a
transaction from an EOA or a message from another contract is received by it.
When the contract code activates, it allows to read/write the message to the local
storage, send messages and create contracts.

How Does Ethereum Work?

Ethereum implements an execution environment called Ethereum Virtual Machine

(EVM).
 When a transaction triggers a smart contract all the nodes of the network will
execute every instruction.
 All the nodes will run The EVM as part of the block verification, where the nodes
will go through the transactions listed in the block and runs the code as triggered
by the transaction in the EVM.
 All the nodes on the network must perform the same calculations for keeping their
ledgers in sync.
 Every transaction must include:
 Gas limit.
 Transaction Fee that the sender is willing to pay for the transaction.
 If the total amount of gas needed to process the transaction is less than or equal to
the gas limit then the transaction will be processed and if the total amount of the
gas needed is more than the gas limit then the transaction will not be processed the
fees are still lost.
 Thus it is safe to send transactions with the gas limit above the estimate to increase
the chances of getting it processed.

Real-World Applications of Ethereum

 Voting: Voting systems are adopting Ethereum. The results of polls are available
publicly, ensuring a transparent fair system thus eliminating voting malpractices.
 Agreements: With Ethereum smart contracts, agreements and contracts can be
maintained and executed without any alteration. Ethereum can be used for creating
smart contracts and for digitally recording transactions based on them.
 Banking systems: Due to the decentralized nature of the Ethereum blockchain it
becomes challenging for hackers to gain unauthorized access to the network. It
also makes payments on the Ethereum network secure, so banks are using
Ethereum as a channel for making payments.
 Shipping: Ethereum provides a tracking framework that helps with the tracking of
cargo and prevents goods from being misplaced.
 Crowdfunding: Applying Ethereum smart contracts to blockchain-based
crowdfunding platforms helps to increase trust and information symmetry. It
creates many possibilities for startups by raising funds to create their own digital
cryptocurrency.
 Domain names: Ethereum name service allows crypto users to buy and manage
their own domain names on Ethereum, thus simplifying decentralized transactions
without putting users to remember long, machine-readable addresses.

Benefits of Ethereum

 Availability: As the Ethereum network is decentralized so there is no downtime.

Even if one node goes down other computing nodes are available.
 Privacy: Users don’t need to enter their personal credentials while using the
network for exchanges, thus allowing them to remain anonymous.
 Security: Ethereum is designed to be unhackable, as the hackers have to get
control of the majority of the network nodes to exploit the network.
 Less ambiguity: The smart contracts that are used as a basis for trade and
agreement on Ethereum ensure stronger contracts that differ from the normal
traditional contracts which require follow-through and interpretation.
 Rapid deployment: On Ethereum decentralized networks, enterprises can easily
deploy and manage private blockchain networks instead of coding blockchain
implementation from scratch.
 Network size: Ethereum network can work with hundreds of nodes and millions
of users.
 Data coordination: Ethereum decentralized architecture better allocates
information so that the network participants don’t have to rely on a central entity to
manage the system and mediate transactions.

Drawbacks of Ethereum

 Complicated programming language: Learning solidity from programming

smart contracts on Ethereum can be challenging and one of the main concerns is
the scarcity of beginner-friendly classes.
 Volatile cryptocurrency: Ethereum investing can be risky as the price of Ether is
very volatile, resulting in significant gains as well as a significant loss.
 Low transaction rate: Bitcoin has an average transaction rate of 7TPS and
Ethereum has an average speed of 15 TPS which is almost double that of bitcoin
but it is still not enough.

Consensus Algorithms in Block chain

Prerequisites: Introduction to Blockchain technology | Set 1, Set 2 We know that
Blockchain is a distributed decentralized network that provides immutability,
privacy, security, and transparency. There is no central authority present to validate
and verify the transactions, yet every transaction in the Blockchain is considered to
be completely secured and verified. This is possible only because of the presence of
the consensus protocol which is a core part of any Blockchain network. A
consensus algorithm is a procedure through which all the peers of the Blockchain
network reach a common agreement about the present state of the distributed
ledger. In this way, consensus algorithms achieve reliability in the Blockchain
network and establish trust between unknown peers in a distributed computing
environment. Essentially, the consensus protocol makes sure that every new block
that is added to the Blockchain is the one and only version of the truth that is agreed
upon by all the nodes in the Blockchain. The Blockchain consensus protocol consists
of some specific objectives such as coming to an agreement, collaboration,
cooperation, equal rights to every node, and mandatory participation of each node in
the consensus process. Thus, a consensus algorithm aims at finding a common
agreement that is a win for the entire network. Now, we will discuss various
consensus algorithms and how they work.

1. Proof of Work (PoW): This consensus algorithm is used to select a miner for
the next block generation. Bitcoin uses this PoW consensus algorithm. The
central idea behind this algorithm is to solve a complex mathematical puzzle and
 easily give out a solution. This mathematical puzzle requires a lot of
computational power and thus, the node who solves the puzzle as soon as
possible gets to mine the next block. For more details on PoW, please read Proof
of Work (PoW) Consensus

2. Practical Byzantine Fault Tolerance (PBFT): Please refer to the existing

article on practical Byzantine Fault Tolerance(pBFT).

3. Proof of Stake (PoS): This is the most common alternative to PoW. Ethereum
has shifted from PoW to PoS consensus. In this type of consensus algorithm,
instead of investing in expensive hardware to solve a complex puzzle, validators
invest in the coins of the system by locking up some of their coins as stakes.
After that, all the validators will start validating the blocks. Validators will
validate blocks by placing a bet on them if they discover a block that they think
can be added to the chain. Based on the actual blocks added in the Blockchain,
all the validators get a reward proportionate to their bets, and their stake increase
accordingly. In the end, a validator is chosen to generate a new block based on its
economic stake in the network. Thus, PoS encourages validators through an
incentive mechanism to reach to an agreement.

4. Delegated Proof Of Stake (DPoS): This is another type of Proof of Stake

consensus algorithm. This type of consensus mechanism depends on the basis of
the delegation of votes. The users delegate their votes to other users. Whichever
user then mines the block will distribute the rewards to the users who delegated
to that particular vote. Refer to the article Delegated Proof of Stake for more.

5. Proof of Burn (PoB): With PoB, instead of investing in expensive hardware

equipment, validators ‘burn’ coins by sending them to an address from where
they are irretrievable. By committing the coins to an unreachable address,
validators earn the privilege to mine on the system based on a random selection
process. Thus, burning coins here means that validators have a long-term
commitment in exchange for their short-term loss. Depending on how the PoB is
implemented, miners may burn the native currency of the Blockchain application
or the currency of an alternative chain, such as bitcoin. The more coins they burn,
the better their chances of being selected to mine the next block. While PoB is an
interesting alternative to PoW, the protocol still wastes resources needlessly. And
it is also questioned that mining power simply goes to those who are willing to
burn more money.

6. Proof of Capacity: In the Proof of Capacity consensus, validators are supposed

to invest their hard drive space instead of investing in expensive hardware or
burning coins. The more hard drive space validators have, the better their
chances of getting selected for mining the next block and earning the block
reward.
 7. Proof of Elapsed Time: PoET is one of the fairest consensus algorithms which
chooses the next block using fair means only. It is widely used in permissioned
Blockchain networks. In this algorithm, every validator on the network gets a fair
chance to create their own block. All the nodes do so by waiting for a random
amount of time, adding proof of their wait in the block. The created blocks are
broadcasted to the network for others’ consideration. The winner is the validator
which has the least timer value in the proof part. The block from the winning
validator node gets appended to the Blockchain. There are additional checks in
the algorithm to stop nodes from always winning the election, and stop nodes
from generating the lowest timer value.

There also exist other consensus algorithms like Proof of Activity, Proof of Weight,
Proof of Importance, Leased Proof of Stake, etc. It is therefore important to wisely
choose one as per the business network requirement because Blockchain networks
cannot function properly without the consensus algorithms to verify each and every
transaction that is being committed.

Introduction of Hyper ledger


Hyperledger is an open-source project under the Linux Foundation where people can
come and work on the platform to develop blockchain-related use cases. According to
Brian behlendorf, executive director of Hyperledger
“Hyperledger is an open source community of communities to benefit an ecosystem of
hyperledger based solution providers and users focused on blockchain related use-
cases that will work on variety of industrial sectors”.

Introduction To Hyperledger

Hyperledger provides the platform to create personalized blockchain services

according to the need of business work. Unlike other platforms for developing
blockchain-based software, Hyperledger has the advantage of creating a secured and
personalized blockchain network.
 It is created to support the development of blockchain-based distributed ledgers.
 It includes a variety of enterprise-ready permissioned blockchain platforms.
 It is a global collaboration for developing high-performance and reliable
blockchain and distributed ledger-based technology frameworks.
Example: Consider a situation when person X wants to buy medicine from person Y,
who was a doctor living in another country.
 As medicine requirement is one person’s private needs, they need to maintain the
data confidentially.
 But Dr. Y is selling medicine in the network to so many people, in the case of the
public blockchain, every transaction will get updated in the network to all the
peers.
 That’s where hyperledger finds its significance. In the hyperledger, the parties are
directly connected and the concerned people’s ledger will be updated.
 Hence providing privacy and confidentiality.

Why Do We Need Hyperledger?

Below are some of the reasons stating the need for a hyperledger project:
 To enhance the efficiency, performance, and transactions of various business
processes.
 It provides the necessary infrastructure and standards for developing various
blockchain-based systems and applications for industrial use.
 It gets rid of the complex nature of contractual agreements, as the legal issues are
taken care of.
 Hyperledger offers the physical separation of sensitive data.
 It decreases the need for verification and enhances trust, thus optimizing network
performance and scalability.

Hyperledger Technology Layers

Hyperledger uses the following key business components:

1. Consensus layer: It takes care of creating an agreement on the order and
confirming the correctness of the set of transactions that constitute a block.
2. Smart layer: This layer is responsible for processing transaction requests and
authorizing valid transactions.
3. Communication layer: It takes care of peer-to-peer message transport.
4. Identity management services: these are important for establishing trust on the
blockchain.
5. API: It enables external applications and clients to interface with the blockchain.

How Does Hyperledger Work?

Hyperledger works in a way that a requirement for the contract can be initiated
through an application.
 The membership service involved in the network validates the contract.
 The concerned two-peer has to produce a result and then sent it to the consensus
cloud.
 The generated result from both the peer has to be the same in order to validate the
contract.
 Once it is validated, then the transaction will happen between the affiliated peers
and their ledger will be updated.
 When a business requires confidentiality and a private network for its transaction
to happen without doing that in a single network, a hyperledger paves the way.
This can be summarized as the peers who are directly affiliated with the deal are
connected and only their ledgers will get updated about the deal. The third parties who
help to carry out the transaction will only get to know the exact and required amount
of information with the help of regulations levied on the network.
Let’s understand the concept with the help of an example.
 Suppose Alice decides to send the product to Bob on a hyperledger-based network.
 She looks at her app to locate her address of Bob on the network.
 The app in return queries the membership service and validates Bob’s
membership.
 The hyperledger will connect both parties directly for the transaction affiliated
with the deal.
 Both parties will generate the result, which has to be the same for them to get
validated.
 The result will be sent to the consensus cloud to be ordered and verified.
 Once the result is validated, Bob receives the product and the transaction is
committed to the ledger.

Roles of Peers

In the hyperledger network, the peers are separated into three distinct roles at two-run
times. This distinct feature in this network makes notable changes as it allows a high
degree of personalization. The 3 peer roles are:
1. Committer: Appends validated transactions to their specific ledger. They only add
the transaction to the specific ledger once the transaction is returned by the
consenter.
2. Endorser: Endorser nodes are responsible for simulating transactions specific to
their network and preventing unreliable and non-deterministic transactions. All
endorsers act as committers on the other hand committer may or may not be
endorsers depending on network restrictions.
3. Consenter: Their role is to validate the transaction by verifying the result
produced by the affiliated peers who want to proceed with a transaction. Their role
is very specific and runs on separate run times, unlike committers and endorsers
who run on the same run time. Their role is to decide which ledger the transaction
be committed to.

Hyperledger Advantages

 Flexibility: Hyperledger provides a high degree of flexibility and modularity,

allowing developers to customize and configure the platform to meet their specific
needs.
 Security: Hyperledger has a strong focus on security, with features such as access
control, identity management, and encryption. This makes it well-suited for
enterprise applications that require a high level of security.
 Scalability: Hyperledger is designed to handle large-scale enterprise applications,
with the ability to support thousands of transactions per second.
 Privacy: Hyperledger allows for the creation of private, permissioned blockchain
networks, which means that only authorized participants have access to the data on
the network.
 Interoperability: Hyperledger provides a common platform for building blockchain
applications, which makes it easier to integrate with other systems and
applications.

Hyperledger Disadvantages

 Complexity: Hyperledger can be complex to set up and maintain, particularly for

organizations that are new to blockchain technology. This can require significant
technical expertise and resources.
 Limited decentralization: Hyperledger is a permissioned blockchain platform,
which means that only authorized parties can participate in the network. While this
can provide increased security and privacy, it also means that the network is less
decentralized than public blockchain platforms.
 Limited community: While Hyperledger has a growing community of developers
and contributors, it is still smaller than some other blockchain platforms. This
could make it more difficult to find support and resources.
 Limited smart contract functionality: Hyperledger offers limited smart contract
functionality compared to some other blockchain platforms. While this may be
sufficient for some use cases, it could be a disadvantage for organizations that
require more advanced smart contract capabilities.

Hyper ledger Projects

There are numerous projects under hyperledger project itself. These projects include:
1. Hyperledger Fabric: Hyperledger Fabric is intended as a foundation for
developing applications and solutions with modular architecture. It provides many
benefits like permissioned networks, confidential transactions, etc.

2. Hyperledger Sawtooth: It is an open-source project and used as an enterprise-

level blockchain system used for creating and operating distributed ledger
applications. Hyperledger sawtooth supports a variety of consensus algorithms like
PBFT, and PoET.

3. Hyperledger Indy: It is a project that is made for decentralized identity. It offers

lots of libraries, tools, and reusable components for creating decentralized
identities.
4. Hyperledger Iroha: It is a blockchain platform designed for infrastructure
projects that need distributed ledger technology. It is used to build identity
management platforms like national IDs. It can integrate with Linux, macOS, and
Windows platforms.

5. Hyperledger Burrow: It is a framework for executing smart contracts in

permissioned blockchains. The goal of Hyperledger burrow is to facilitate cross-
industry applications for smart contracts. It is built around the BFT consensus
algorithm.

6. Hyperledger Caliper: It is a blockchain benchmark tool that allows users to

measure the performance of a blockchain implementation with a set of predefined
use cases. It will produce reports containing a number of performance indicators to
serve as a reference when using the blockchain solutions like Hyperledger Burrow,
Hyperledger Fabric, Hyperledger Iroha, and so on.

7. Hyperledger Cello: It serves as an operational dashboard for Blockchain that

reduces the effort required for creating, managing, and using blockchains. It
provides an operational console for managing blockchain efficiently.

8. Hyperledger Explorer: It is a user-friendly web application tool that is used to

view, invoke, deploy, or query blocks, associated data, and network information
stored in the ledger. It is regarded as an easy way that allows users to view the
necessary network information of the blockchain.

9. Hyperledger Besu: It is an Ethereum client designed to be enterprise-friendly for

both public and private blockchain network use cases. It offers many useful
features like EVM, several proof-of-authority protocols, a privacy transaction
manager to ensure the privacy of transactions, etc.
What Is Tokenization in
Blockchain?
Tokenized digital assets are transforming the way we exchange information and
value.

Summary
In the blockchain ecosystem, tokens are assets that allow information and value to
be transferred, stored, and verified in an efficient and secure manner. These crypto
tokens can take many forms, and can be programmed with unique characteristics
that expand their use cases. Security tokens, utility tokens, and cryptocurrencies
have massive implications for a wide array of sectors in terms of increasing
liquidity, improving transaction efficiency, and enhancing transparency and
provability to assets.

Contents


Security Tokens, Utility Tokens, and Cryptocurrencies

The Benefits of Tokenization

What Does Crypto Tokenization Look Like?

Challenges to Tokenization

The Future of Crypto Tokenization

Security Tokens, Utility Tokens, and Cryptocurrencies

Generally speaking, a token is a representation of a particular asset or utility.

Within the context of blockchain technology, tokenization is the process of
converting something of value into a digital token that’s usable on a blockchain
application. Assets tokenized on the blockchain come in two forms. They can
represent tangible assets like gold, real estate, and art, or intangible assets like
voting rights, ownership rights, or content licensing. Practically anything can be
tokenized if it is considered an asset that can be owned and has value to someone,
and can be incorporated into a larger asset market.

The concept of tokenization precedes blockchain technology. The financial

services industry has implemented some form of tokenization to protect clients’
confidential information since the 1970s. This process has typically involved the
conversion of sensitive information such as credit card numbers, social security
numbers, and other personally identifiable information into a string of
alphanumeric characters, which are then processed through a cryptographic
function to create a unique token.

To some extent, this method bears some resemblance to the tokenization process
enabled by blockchain technology. However, while past tokenization mechanisms
were primarily designed to protect sensitive data, blockchain-enabled tokenization
allows for a more secure yet flexible tokenization of assets that has significantly
broadened the potential applications of digital tokens across a wide array of
industries.

The Benefits of Tokenization

Crypto tokens provide several user benefits that can be generalized into three main
categories:

More Liquidity: Once tokenized, assets can be made available to a much larger
audience, which increases market liquidity and removes the “liquidity premium”
associated with investments that are traditionally more difficult or time-consuming
to sell, like fine art or real estate. Tokenized assets can be designed to be freely
exchangeable online and allow investors to acquire fractional ownership of a
token’s underlying asset. As a result, crypto tokens can both contribute to the
liquidity of existing markets and provide a broader range of investment
opportunities to more investors.

Faster, Cheaper Transactions: Crypto tokens allow investors to bypass market

intermediaries and other middlemen who are typically involved in the traditional
asset management process. This effectively reduces the transaction costs and
processing time of each exchange, allowing for a more streamlined, cost-efficient
method of transferring value. Additionally, since crypto tokens exist on the
blockchain, they can be traded and sold 24/7 around the globe.

Transparency and Provability: Because crypto tokens live on the blockchain,

users can easily trace their provenance and transaction history in a way that is
cryptographically verifiable. Transactions can be automatically recorded on the
blockchain, and the immutability and transparency enabled by blockchain
technology helps guarantee the authenticity of each token’s stated history. These
qualities enable crypto tokens to achieve a level of reliability that most other digital
assets cannot match.

Crypto tokens enable both information and value to be transferred, stored, and
verified in a way that is both efficient and secure. And while asset tokenization has
massive implications within the financial services sector, this technology is equally
valuable for smaller investors and other individuals who can benefit from more
market access and more effective ways to leverage their existing assets.

What Does Crypto Tokenization Look Like?

There are four main categories of crypto tokens, although the delineations can blur
depending on the specificities of a particular token or the platform with which it is
tokenized.

Security tokens: Security tokens embody a particular investment, such as a share

in a company, a voting right in a company or other centralized organization, or
some tangible or digital thing of value. In addition to serving as a digital
representation of an underlying asset or utility, security tokens can be programmed
with an inexhaustible array of unique characteristics and ownership rights. As
such, these tokens constitute an entirely new type of digital asset.

Tokenized securities: It’s important to note that security tokens are not the same
as “tokenized securities.” While the two terms are often conflated, a tokenized
security serves as a straightforward digital stand-in for its underlying security, and
is typically designed to be easily exchanged, aggregated, or used. In other words,
tokenized securities mainly exist to broaden the market accessibility or liquidity of
the security being tokenized, without the addition of unique programmed or
cryptographic characteristics such as those found in security tokens.

Utility tokens: Utility tokens represent access to a given product or service,

usually on a specific blockchain network. Utility tokens may be used to power a
blockchain network’s consensus mechanism, furnish the operations of a
decentralized market, pay transaction fees, or grant holders the right to submit and
vote on new developments within a decentralized autonomous organization (DAO)
or other decentralized network. While security tokens are primarily used to
establish ownership rights, utility tokens are more focused on practical use. Many
of the crypto tokens launched via an Initial Coin Offering (ICO) on the Ethereum
platform are intended to function as utility tokens.

Currency tokens: Currency tokens are designed to be traded and spent. Some are
based on underlying assets — as is the case with asset-backed stablecoins such
as MakerDAO’s DAI and Gemini’s GUSD. However, many others are not based
on any underlying assets. Instead, their value is directly linked to their distribution
mechanism and underlying blockchain network.

It’s important to note that just because a crypto token is designed for a specific
purpose doesn’t mean that users will only use the token for that intended purpose.
For instance, while utility tokens are not explicitly designed to be speculative
investments, many people buy these tokens in hopes that their value will increase
as demand for the company’s products or services grows.

In addition to the above classifications, tokens can also be designed to be

either fungible or non-fungible, depending on their intended use. Fungible tokens
are identical and can seamlessly replace one another. On the other hand, non-
fungible tokens (NFTs) are unique and provably scarce, meaning their histories can
be traced down to the individual level. Examples of NFTs include
Ethereum’s Cryptokitties and the digital art and collectibles available for purchase
on NFT marketplaces such as Nifty Gateway, OpenSea, and NBA Top Shot. As
such, fungible tokens are typically used in environments where individual
traceability is not a concern (such as in providing market liquidity), whereas NFTs
are used in instances where uniqueness and provable scarcity is valued (such as in
digital art and collectables).

Challenges to Tokenization

Blockchain projects that use crypto tokens can encounter regulatory hurdles as
governments around the world scramble to react to the unprecedented nature of
this new technology. These tokens can often involve characteristics common in
financial securities but are often not subject to the same regulations as traditional
securities. This presents a challenge to both government authorities and blockchain
projects trying to balance innovation and compliance.

While an increasing number of countries have implemented crypto regulations in

order to encourage growth, other nations are taking a stricter approach in order to
front-run potential issues down the road. For example, in the U.S. the Securities
and Exchange Commission is considering officially classifying certain tokens as
securities, which would subject those projects to a heightened level of external
scrutiny.
 Another central concern for regulators is how security tokens will remain tethered
to their underlying assets. If thousands of anonymous investors collectively own a
tokenized hotel, how will they determine who is responsible for the hotel’s
maintenance and operations? Or what happens if the gold reserves underpinning an
asset-backed token go missing? In other words, while tokenizing digital assets
allows for decentralized, trustless value transfers, physical asset tokenization will
likely still require some degree of centralization and third-party involvement.

As a result, a more mature regulatory environment will likely be necessary in order

to achieve the mass adoption of crypto tokens across a broader range of industries;
courts need defined rules to arbitrate cases in which the blockchain environment
and traditional world overlap. Many investors want specified protections and the
ability to seek recourse in situations that cannot yet be fully codified in smart
contracts.

The Future of Crypto Tokenization

Tokenization — from asset tokenization to real estate tokenization — is radically

transforming the way we interact with assets of value. Blockchain technology
enables any asset or service to be represented and stored on a blockchain, thereby
democratizing access to assets while providing an unprecedented level of online
transparency and security. However, with the rules governing the sale, distribution,
and management of crypto tokens continuing to vary from country to country, it
will take a large-scale, multilateral effort to build the global, borderless value
transfer systems that crypto tokens may one day enable. As more and more people
and governments around the world come to terms with the incredible power and
utility of blockchain, the tokenized future is very quickly becoming a reality.

Demur-rage currencies in Blockchain


Currency is one such core concept in blockchain technology that can extended and re-
understood. Currency which is usually referred as digital token it facilitates quantified
transfer mechanism. This idea is known as Demur-rage currency.
Demur-rage means “cost of carrying”- that is the cost to carry an asset. The Demur-
rage originated from freight and shipping industry which is used to indicate the extra
cost or charge associated with detention in port of a vessel by the ship owner, as in
loading or unloading in given time.
In the cryptocurrency sense, demur-rage can lose the value over time i.e., deflationary.
Thus, there should be some sort of action taking to realize value before it is lost i.e.,
spending. Therefore it encourages economic activity. Another important aspect of
demur-rage currencies is automatic redistribution of the currency across the network
at certain time specified. In addition to the value loss, this periodic redistribution is
another important factor.
Demur-rage currency features could become dominant and standard currency tool.
Freicoin and Healthcoin are two examples of demur-rage currency.Here several
health-related services can be paid by using “Healthcoin”, for instance in United
States many health related services or plans are usually paid in Healthcoin, where as
Freicoin can be used basic needs like living expenditures. As the currency loses it
value over the time the main goal is to spend it or to use it as soon as possible. Thus
inducement to spend and redistribution are the main features of demur-rage currency.
This concept of demur-rage currency is not only in the context of currency but it is
also used for financial purpose, in economic activities and so on.
However the main goal of demur-rage currency is to provide trust and motivate the
people to spend the money before it looses its value.

CurrencyMultiplicity:
Generally, people tend to attribute currency to money and financial
transaction. If we peel away the superficial layers of modern life which we
all must navigate, we may become aware of more types of currency and
exchange. Contemplation and practice of this awareness can enrich our
activities and relationships in ways we may not anticipate. Whether we work
in the private, public, or corporate sector — even in artistic and creative
fields — we can enhance our experiences professionally and personally.

currency (noun) 1 a : circulation as a medium of

exchange — Merriam-Webster Dictionary

We already know that in the current economic paradigm, we all do

work/labor in exchange for paper onto which an abstract yet tangible value
is attributed. That value is dependent on the current market value and
demand (vs. supply) of goods, services, real estate, etc. This is by no means
meant to serve as an economics lesson, nor am I an individual from whom
one would want such a lesson. However, it is important to explore the
essence of our conditioned modes of exchange.

P ersonally, I can only speak from experience in creative fields. I

have been a full-time musician in New York City since 2003. Before that,
jobs I had outside my field were mostly in the restaurant or construction
industries. I decided right before Christmas 2003 to quit my job as a waiter
in Manhattan. I had become really good at that job, was making a lot of
money, and completely miserable. I had moved to New York in 2002 — a
move I had known I would make since as far back as I remember — to
pursue music in what I perceived to be the center of the cultural universe.

At this time, I realized the most important — and nonrenewable — resource

available is time and I didn’t want to continue wasting mine. I had some
money saved up, so I knew whatever the case, I would be ok for a few
months. From then on, I navigated the landscapes of jam sessions, concerts,
and Craig’s List making connections, getting guitar students, and working
on performance opportunities. The lessons I learned along the way I could
not have learned in any school. I ended up in situations — where I would
have never seen myself before — that nourished and enriched my
musicianship. I made lifelong connections and partnerships that allowed a
career to blossom beyond imagination. I learned — and am still learning —
that money is only one possible result of many forms of currency and
exchange. Heart is everything. Trusting your convictions is key. Seizing
one’s precious time is absolutely crucial.

“If you say that getting the money is the most

important thing, you’ll spend your life completely
wasting your time. You’ll be doing things you don’t like
doing in order to go on living, that is to go on doing
things you don’t like doing, which is stupid.” — Alan
Watts

Currently, in the music business, many of us struggle with being

compensated financially what we feel we are worth or correspondent to the
amount of work, effort, and skill that goes into each project/job. Because of
this, most people who dream of being full-time have difficulty establishing
their own path while navigating through this reality of timeless altered
creative states and down to earth pragmatic survival concerns. This is,
however, where the true struggle lies and what separates the proverbial
wheat from the chaff.

G etting to the point, I have discovered — and this may seem

glaringly obvious to some — that there are myriad types of currency

available to us to work with. None are mutually exclusive which can and do
interact with each other. Some more concrete exchange scenarios can
involve barter (something crucial to thriving in the creative fields) and
sharing of information and resources. Now we can decide if our interactions
will be staunchly quid pro quo or if we can get creative and play with it.

For instance, you may need me to play guitar on your recording and might
not have money to pay my established rate. All may not be lost. I might see
if you have something else I need — resources, equipment, or work
exchange and we can set up a clean quid pro quo transaction. Or we can
decide we want a long-term relationship and maybe I will just do you a solid
and ask you to pay it forward or keep me in mind for something down the
road. This would be a long-term/long-game approach and likely only be
reserved for projects you are interested in beyond immediate compensation.

If we look at the first word from the above definition of currency —

circulation — we may get a more holistic view of what can be. If you are like
me and believe we are here to give, build, and contribute, then circulation is
key. Fundamentally, we are giving — and hopefully also receiving — energy.
If we approach it from the point of view of a circular flow of this energy,
giving to others can be experienced as equally giving to oneself. The joy you
can experience from another’s joy is absolutely priceless. I can’t tell you how
many times I have been in high-paying situations where there is little to no
joy and everyone involved is totally uptight. I have also been in low-paying
situations where the joy is flowing, there is comradery and also chemistry.
Having experienced plenty of both, I would choose the latter over the former
any day.

Building relationships is all about circulation. And life is all about

relationships. Perhaps it can be a beneficial approach to practice being
active and present — generous and gracious — all as part of the same
circular flow. We all want to receive. We all want love, attention, friendship,
money, validation, stuff, etc. What if all we have to cultivate is that
awareness of circulation? What if it’s all about giving and giving it ALL? It’s
an interesting supposition considering we cannot take any material
accumulations with us when we die. We can only leave what we were. We
leave feelings, memories, deeds, constructions, works, etc. and maybe that’s
the only currency worth participating in.