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A Summary of

Thoughts on tokens

by
Balaji Srinivasan
Medium
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Tokens are a digital asset based on bitcoin’s technology. Tokens are not equity, they are a type of API key. The combined market cap for these digital tokens is in the tens of millions, which could eventually lead to greater amounts of captured value compared to earlier generations of internet companies.

The Basics:

  1. Tokens are possible because of four years of digital currency infrastructure
  2. Tokens vary in their underlying blockchains and codebases
  3. Token buyers are buying private keys
  4. Tokens are analogous to paid API keys
  5. Tokens are a new model for technology, not just startups
  6. Tokens are a non-dilutive alternative to traditional financing
  7. Tokens can be bought by any American (>30X increase in buyers)
  8. Tokens can be sold internationally over the internet (~20–25X increase in buyers)
  9. Tokens have a liquidity premium (>1000X improvement in time-to-liquidity)
  10. Tokens will decentralize the process of funding technology
  11. Tokens enable a new business model: better-than-free
  12. Token buyers will be to investors what bloggers/tweeters are to journalists
  13. Tokens further increase the primacy of the technologist over the traditional executive
  14. Tokens mean instant custody without intermediaries
  15. Tokens may be generalizable to every tech company through paid logins
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