O'Reilly logo

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Tokenomics

Book Description

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.

Downloading the example code for this book You can download the example code files for all Packt books you have purchased from your account at http://www.PacktPub.com. If you purchased this book elsewhere, you can visit http://www.PacktPub.com/support and register to have the files e-mailed directly to you.

Table of Contents

  1. Tokenomics
    1. Table of Contents
    2. Tokenomics
      1. Thomas and I
      2. Endorsements
      3. Why subscribe?
      4. Packt.com
    3. Contributors
      1. About the authors
      2. About the reviewer
      3. Packt is Searching for Authors Like You
    4. Preface
      1. Who this book is for
      2. What this book covers
        1. Download the color images
        2. Conventions used
      3. Get in touch
        1. Reviews
    5. 1. Once Upon a Token
      1. A network of markets
        1. The Internet of information
          1. The Internet of value
      2. What is tokenomics?
        1. Micro and macro
        2. First occurrence of the word
      3. The token economy
        1. What does the current tokenized economy look like?
        2. What is tokenization?
          1. The tokenization of everything
      4. Summary
    6. 2. A Bit of Coin Theory
      1. Bitcoin – in the beginning
        1. DigiCash
        2. E-gold
        3. B-money
        4. Bit gold
        5. Liberty Dollar
        6. Why did Bitcoin succeed?
        7. How was Bitcoin born?
        8. Trust
        9. Decentralization
        10. Transparency
        11. Consensus
          1. Other ways to achieve consensus
        12. What is Bitcoin?
        13. What is a coin?
        14. Mining Bitcoin
        15. Is Bitcoin money?
        16. Open source
      2. Alternative coins (Altcoins)
        1. Namecoin – the first altcoin
        2. Litecoin – the silver to Bitcoin's gold
          1. Pre-mining
        3. Primecoin – finding new prime numbers
        4. Other altcoins
        5. Lessons learned
      3. Blockchain – the immutable database
        1. The definitions
        2. ISO/TC 307 – Blockchain and distributed ledger technologies
        3. What is a distributed ledger?
        4. What does a blockchain look like?
        5. Storing information on the blockchain
          1. Op Return
        6. Scaling
        7. IOTA
        8. Coloring bitcoins
      4. Smart contracts: are they that smart?
        1. Smart contracts in Bitcoin
          1. Script
        2. Ethereum
        3. Smart contracts in Ethereum
          1. What does an Ethereum smart contract look like?
          2. The most unfortunate famous smart contract – the DAO
        4. Fees in Ethereum smart contracts
      5. The peak of ICOs
        1. Participating in an ICO
        2. The fastest ICO raises
        3. Network congestion
        4. The Useless Ethereum Token
      6. Summary
    7. 3. The Potential of ICOs
      1. What is an ICO?
        1. The ICO acronym
          1. What is a token?
          2. The difference between coins and tokens
            1. Different types of tokens
              1. Cryptocurrency coins or payment tokens
              2. Utility tokens
              3. Security or asset tokens
            2. Common ICO terminologies and acronyms
              1. ERC20/EIP20
              2. Changing the promise
          3. The dot-com versus dot-coin bubble
            1. Market capitalization
            2. Circa 1994 and email
            3. Celebrities
            4. The numbers
            5. Bitcoin versus the Nasdaq
          4. The bust
            1. Risk in ICOs
              1. Infrastructure
              2. Education
              3. ICO road maps
              4. Working with new technologies
              5. Token saturation
              6. Community saturation
              7. Greater fool theory
          5. A new era of ICO innovation
            1. Innovation in the ICO mechanism
              1. Going private
              2. Well-known advisors
              3. Creative discounting
              4. Second round
            2. Innovation in ICO ideas
              1. Health tokens
              2. Digital identity
              3. Supply chain
              4. Energy
          6. Summary
    8. 4. Token Varieties
      1. ICOs on the Bitcoin blockchain
        1. Omni (OMNI) (formerly MasterCoin)
        2. MaidSafe (SFE) on Omni
        3. Tether on Omni
      2. Counterparty (XCP)
        1. Storj (SJCX)
        2. Factom (FCT)
        3. Ripple (XRP)
          1. How did Ripplepay work?
          2. When was Ripple created?
          3. Funding
          4. XRP coin
          5. The purpose of XRP
      3. ICOs on custom blockchains
        1. Nxt
        2. Ethereum
        3. Lisk (LSK)
        4. Waves (WAVES)
        5. Tezos (XTZ)
        6. NEM (XEM)
          1. Side note – proof of importance
      4. ICOs on the Ethereum blockchain
        1. Augur (REP)
        2. ICONOMI (ICN)
        3. EOS (EOS)
        4. Bancor
      5. ICOs on non-blockchain technologies
        1. IOTA
          1. Hashgraph
      6. Summary
      7. References
    9. 5. The Need for a Token
      1. The purpose of a token
        1. Thought experiment #1 – monetizing excess digital storage
        2. Thought experiment #2 – monetizing excess processing power
        3. Thought experiment #3 – payment cards
        4. Thought experiment #4 – messaging platforms
        5. Thought experiment #5 – decision-making platforms
      2. Did these ICOs really need a blockchain?
        1. SaaS analogy
      3. Types of companies running ICOs
        1. Existing companies running ICOs
          1. GameCredits (GAME)
          2. Kin from Kik (KIN)
          3. Brave's BAT
          4. Eastman Kodak Company – KODAKOne
        2. New companies running ICOs
          1. Humaniq
        3. Other new companies
      4. Critical considerations when creating a token
        1. Step one – the purpose of the token
          1. What does the token do?
          2. Side note: multiple tokens
        2. Step two – existing token or custom token?
          1. Token tools
        3. Step three – do you need a blockchain?
          1. Side note: public or private blockchain?
        4. Resources
          1. Coinbase
          2. ConsenSys
          3. Public Trello board
        5. Token questionnaire
      5. Summary
    10. 6. Playing by the Rules
      1. Security tokens and the SEC
        1. What is an investment contract?
        2. The Howey Test (US-based companies)
        3. US citizens
        4. AML/KYC
        5. SEC statements
      2. Global stance
        1. Singapore (http://www.mas.gov.sg/)
        2. Canada (https://www.securities-administrators.ca/)
        3. China (http://www.pbc.gov.cn/)
        4. Switzerland (https://www.finma.ch/)
        5. Hong Kong (https://www.sfc.hk/)
        6. Australia (https://asic.gov.au/)
        7. South Korea (http://www.fsc.go.kr/)
        8. Estonia (https://www.fi.ee/)
        9. Europe (https://www.esma.europa.eu/)
        10. United Kingdom (https://www.fca.org.uk/)
        11. New Zealand (https://fma.govt.nz/)
        12. The SEC comes knocking
        13. The DAO
        14. Harbour
        15. Protostarr
        16. PlexCoin
        17. Munchee
      3. Foundations
        1. Crypto Valley
        2. LLC, Ltd, GmbH
      4. The evolution of white paper legality clauses
        1. SAFT
      5. Summary
    11. 7. The Token Sales Mechanics
      1. Token supply and distribution
        1. Distribution
          1. EOS distribution
          2. The presales strategy and bonuses
            1. No bonuses
              1. Case study – Civic
                1. The Civic App
                2. The Civic token
              2. Cryptobeer
              3. Kyber Networks
            2. Bonuses
            3. Ethereum
            4. Waves
            5. FirstBlood
            6. Humaniq
            7. TenX
            8. Tezos
            9. Synereo
            10. NEM
          3. Presales or pre-ICO and private sales
            1. OmiseGo
            2. Simple Tokens
            3. Telegram
            4. Vesting periods
          4. Hard cap, soft cap, and no cap
            1. Uncapped ICOs
              1. Ethereum
              2. Tezos
            2. Capped ICOs
              1. Soft cap
              2. Hard cap
              3. Hidden caps and presales: Aragon
              4. Dynamic ceiling – Status
          5. Reverse Dutch auction – Gnosis
          6. Token mechanics considerations
        2. Summary
        3. References
    12. 8. White Paper, Website, and Team
      1. The white paper
        1. Other colored papers
          1. Yellow paper
          2. Grey paper
          3. Green papers
          4. Light paper
          5. Mauve paper
        2. First-generation white papers – lots of maths
        3. Second-generation white papers – color
        4. Third-generation white papers – project timelines
        5. Fourth-generation white papers – the executive summary
        6. White paper content considerations
      2. Website
        1. What is this and how does it work?
        2. Token details
        3. Blogs
      3. Team
        1. The hacker, hustler, and hipster
        2. Advisors
      4. Summary
    13. 9. Social Media and Influencers
      1. The deeper meaning of being social
      2. What is social media?
        1. How has social media arisen?
        2. Why is social media important?
        3. Your brand, your voice, your face, and your profile
        4. Organization
        5. ORS®
          1. Open
          2. Random
          3. Supportive
          4. ORS® and social media
          5. Case study: Thomas Power
        6. Twitter
        7. So what does the future hold?
        8. Where is social media going?
      3. Social media in ICOs
        1. Factom
      4. Influencers
        1. People are more interested in who you are than what you do
        2. What's the relationship between influencers and ICOs?
        3. Influencers in the crypto community
          1. YouTube influencers
            1. Ian Balina
            2. Influencer ICO platforms
            3. Kylie Jenner
          2. Summary
    14. 10. Marketing and the launch
      1. The state of ICO marketing
        1. Don't underestimate the workload
        2. Key campaign elements and phases
          1. Build-up to brand/site launch
          2. Build-up to seed funding (private pre-sale)
          3. Build-up to the public ICO
          4. Post-ICO and ongoing community development and engagement
      2. The message and tools
        1. Quality of the brand and the presentation
        2. Mind your grammar
        3. Products with real users
        4. Pay-per-click
        5. Alternative social media
        6. Telegram
        7. Email marketing
      3. The community
        1. Partnerships
        2. Public relations
        3. Networking into investor groups – without this, the ICO dies
        4. Bitcointalk
        5. Bounty campaigns
        6. Signature campaigns
        7. Airdrops
      4. The launch
        1. ICO listings and ratings
        2. Events
        3. GDPR and marketing
      5. Summary
    15. 11. Voices of the ICO World
      1. ICO expert voice – Nick Ayton, founder 21Million TV, Chainstarter
      2. ICO expert voice – Jonathan Fry, CEO TeamBlockchain, and member of the British Blockchain Association
      3. ICO expert voice – Jason Goldberg, founder and CEO of Open Simple Token, $20M ICO
      4. ICO expert voice – Dinis Guarda, former CEO of Humaniq, $5M ICO, founder Lifesdna
      5. ICO expert voice – Vinny Lingham, co-founder and CEO of Civic, $33M ICO
      6. ICO expert voice – Aaron McDonald, CEO and co-founder of Centrality, $100M ICO
      7. ICO expert voice – Nimo Naamani, co-founder of Horizon State, $1M ICO
      8. ICO expert voice – Bokky PooBah, ICO auditor
      9. Summary
    16. 12. The Future
      1. There is only one Bitcoin
        1. The killer app
      2. The Internet of Tokens
        1. ICOs
        2. Tokenization of securities and real-world assets
        3. Non-fungible tokens (NFT)
        4. Token volumes, saturation, and communication
        5. The Internet of Things
        6. Tokens in a virtual world
      3. Technology
        1. Decentralization
        2. Decentralized exchanges
        3. Case study – Tenzorum
          1. What problem does Tenzorum solve?
        4. Tenzorum components
        5. The Internet of Blockchains
          1. Cosmos
          2. Polkadot
          3. Other cross-ledger blockchains
        6. Governance
          1. On-chain/Off-chain governance
          2. Auditchain
      4. Privacy and anonymity
        1. The privacy of cash and coin
          1. Privacy coins versus coins with privacy features
            1. Monero
            2. Zcash
            3. Dash
            4. Verge
        2. Case study – Hedera hashgraph
          1. The Hedera name
          2. Consensus
          3. Licensing model
          4. The network
            1. The platform
          5. Quantum blockchains
            1. Classical computer
            2. Quantum computers
            3. Superposition
            4. Entanglement
          6. What can be used as qubits?
            1. The link to cryptography
            2. The link to blockchains
        3. Governments and society
        4. Free society
      5. Summary
    17. Summary
      1. The journey has just begun
    18. Other Books You May Enjoy
      1. Leave a review - let other readers know what you think
    19. Index