How to analyze a token #3 – the framework

In the first two parts we presented the possibilities of token classification with regard to different aspects. In order to get a complete picture of a token, a combination of these different points of view is useful. Untitled INC achieves this with the Token Classification Framework.

The first two parts of this series have shown that a token can be viewed from different angles. In the case of the Distributed Lab framework, you could already see that the overall picture of a token is very multifaceted.

Bitcoin news: This approach is deepened in the Token Classification Framework of Untitled INC

Untitled INC is a think tank whose members are located in Berlin, Frankfurt, Munich, Vienna, Zurich, Tokyo and San Francisco. Bitcoin news focuses on the Distributed Economy and the Blockchain like explained in this review. The goal of one of the projects was a framework for a more precise classification of tokens.

The presented approach wants to classify a token by considering five dimensions:

the target of the token (crypto currencies like Bitcoin, network tokens like Gnosis, investment tokens like DigixDAO)
the utility of the token (usage token for access to services or network itself such as Bitcoin, work token, which give individual users the right of active participation in a system such as REP and hybrid token such as DASH)
the legal status (utility token like STEEM, security token like SPiCE or crypto currency like Litecoin)
the technical level (At which level is the token implemented? Is it blockchain-native like ether, a non-native protocol token like a REP or associated with a dApp or application like WIZ by Gnosis?)
the underlying value (Where does the value of the token come from? Is it asset-backed like Tether, does it have a value coming from the whole network like Bitcoin or can it be compared to a stock like DigixDAO?)
A complex image of a token can now be characterized along these five dimensions.

Bitcoin news about archetypes of tokens

If one examines different tokens for this Bitcoin news, one notices that some patterns occur several times. Bitcoin news tokens often feed their value from the network. In contrast, investment tokens are often covered by an asset or can be compared to a stock. Specifically, the Untitled INC team has named the following use cases:

Crypto currencies are used as a means of payment or store of value. They are not issued by a central authority. They can be mined (or acquired via another consensus mechanism), as long as the total quantity has not been generated by pre-mining or something similar.
Tokenized assets can give users access to classic assets such as gold or the like, so that even the smallest shares of gold can be traded. The price of the tokenized assets is not only subject to the mechanisms of supply and demand, as is the case with crypto currencies. The problem is that a central entity controls these assets. Accordingly, tokenized assets stand in a certain contradiction to the ideals of crypto currencies.
Platforms can also be organized as tokenized assets. Unlike the assets addressed, they are not owned by a single entity. The value of a tokenized platform is given by the whole network.
Finally, tokens can also be part of a project, as is the case with The DAO or various ICOs. Security tokens can lead to payouts on the one hand and give the token holders a say on the other. One problem is that such tokenized shares count as securities in different countries and are treated accordingly.
Token in a larger context
So far the Token Classification Framework corresponds to the approach of Distributed Lab or is only a slight extension of it. Untitled INC goes one step further and considers the different levels of blockchain systems. A distinction is made between the Governance Layer, the Token Layer and the Technology Layer.

The governance layer includes aspects such as the decision as to which legal form the project should have behind the token, how far token holders are integrated or how to organize the network. This also includes the question of how to make decisions within the system or how to regulate governance processes beyond the chain.

The token layer is described by the type of the token, i.e. by the previously used token layer.

The Escalation: Bitcoins First Hard Fork

By mid-2017, the fronts had hardened to such an extent that no agreement was in sight. The SegWit site had been retrofitted with the UASF (User Activated Soft Fork). Here, the full nodes in the Bitcoin network signaled that they would only support SegWit after August 1, 2017. As a result, the Ver and Wu camp took the helm into their own hands and decided on a hard fork. On August 1, 2017, the two sides parted ways. Bitcoin (BTC) activated SegWit and Bitcoin Cash (BCH) decided not to use SegWit, but increased the block size to eight megabytes.

Since then, little has changed technologically at Bitcoin (BTC). SegWit is active and allows new address formats and the Lightning Network. The block size was abolished, but now there is a block weight. This is around four megabytes. Effectively the space on the blockchain has been increased, but primarily the Transaction Malleability has been fixed. So the BTC community decided for the conservative way of the Soft Fork.

The Bitcoin formula split

Bitcoin formula went the way of larger blocks and the less conservative way of hard forks says onlinebetrug. It was agreed within the BCH community to carry out a hard fork twice a year. In May 2018, this plan was applied for the first time. The block size in BCH found its new limit now at 32 megabytes. In addition, some OP codes were reactivated for the protocol. The hard fork went smoothly, the conflict seemed to be solved…

… until August 2018 arrived. The specifications for the next Hard Fork, in November 2018, caused great controversy within the BCH community. As in the previous year, two camps were formed. On the one side were Roger Ver and Jihan Wu with their ABC protocol. On the other side was Craig Wright aka “Satoshi Nakamoto” and Coingeek CEO and billionaire Calvin Ayre with Satoshi Vision (SV). In the following months a lot of mud flew from both sides – especially from the Wrights. A civil war was on its way.

When November 15, the day of the hard fork, came, the Bitcoin trader network split again

At first, Faketoshi said they didn’t want a split. Instead, they threatened a 51 percent attack and wanted to wipe out the ABC chain. This Bitcoin trader battle went down as the Bitcoin trader scam in the still young history of the crypto currency. The end result was a chainsplit. So today there are two different coins. One is called Bitcoin Cash (which is the ABC faction). The other coin follows the vision of Craig, pardon, Satoshi and is therefore also called Bitcoin SV (Satoshi Vision).

Well thought, bad done? – Coinbase wants to offer customers more decentralisation

The Coinbase crypto exchange researches blockchain-based identity management. According to Coindesk, a team of 17 is working on the development of a decentralized app (dApp) that will give Coinbase customers more control over personal data. However, the implementation is still lacking.

An all too well-known battle cry of the Blockchain enthusiasts is “Be in possession of your own data”.

Identity management is and remains the use case for Bitcoin trader technology

Personal Bitcoin trader data is no longer stored as usual on central company servers, but remains on a Bitcoin trader blockchain and is thus effectively under the company’s own control. The advantage: On the one hand, the companies cannot make a mess of the data and on the other hand, data theft or loss is largely excluded. In short: The single point of failure is eliminated.

Now Coinbase is also researching such a blockchain solution. As Coinbase manager and head of the 17-member task force, B Byrne, told Coindesk, the team first wants to identify in which areas more decentralization is desired.

The Bitcoin exchange recently asked a small number of its customers about the dApps they were using.

“I look at dApps and which of our customers uses which dApps. That’s probably a good indicator of what kind of activities [our customers] want to do on an on-chain basis, Byrne told Coindesk.

Crypto trader in a different way

A possible application case for more decentralization in crypto trader IT is the storage of KYC data (“Know Your Customer”). This could considerably simplify the registration processes for the various Coinbase products and grant more customers access to the Exchange.

At the same time, however, the US crypto exchange is realistic. The decentralized identity management via blockchain is not an egg-laying wool milk sow. Although there are interesting areas in which an application seems to make sense, the company does not want to invest large sums in development, according to the report.

Byrne says that, in all honesty, a complete decentralization of customer data is hardly compatible with the regulatory requirements of the tax authorities.

So it remains with the focus team and the credo: Somewhere there is already a meaningful application case for the blockchain technology.