Many aspects of the tokens used to control modern cars are imperfect. Car keys are not, and never really have been, unique. Since there are so many cars out there, just randomly trying your key in the locks of cars you see won’t usually get you inside. But with the right knowledge or a big enough key ring, criminals exploit weaknesses of modern keys every day.

Physical keys can be lost, so they must always be replaceable. And only one person can hold a physical key at any given instant. To acquire the key, someone needs to give it to you somehow, or you need to retrieve it from the place the last person left it. That place must be protected so that only someone authorized to use the vehicle has access. You get the idea.

I’m not exaggerating when I say that cryptographic tokens change everything.

Imagine instead of a physical key, the car is controlled by a one-of-a-kind-unique token built on the counterparty platform that controls the door, locks, and ignition of your car. On your phone you have an application with pockets, bitcoin addresses that can hold access tokens and empower you to cryptographically sign requests. You place the token in your digital pocket and walk up to your car; your phone lets the car know you're nearby and the car sends a request for a signed message from the digital pocket (bitcoin address) that controls the token key; your pocket controls the token which controls the car. Your phone uses the address containing the token to sign and broadcast a transaction back to your car to unlock the doors. Voila, you are in control of the car and enabled to press a button that toggles the ignition, or do anything else the current operator of the car should be able to do.

That might sound complex, but your phone and your car handle almost all of it without you even knowing. You just have to make sure you have the right token.

Okay, so you can use your phone to open and turn on a push-button car. That’s just the start. 

There are two levels of ownership when it comes to a token:
 

1. Token Possession

   Whoever holds the token (right now) can use it.

    

2. Asset Authority

   The true owner of the car, and thus the token, even when they do not hold it.  If the token is late, lost or stolen they can invalidate the old one and create a new and unique one for about $0.05 

Tokens, unlike cryptocurrencies, can be designed to be basically disposable by whoever holds the asset authority which means there's really no problem if the key does get lost or stolen.  In the future, instead of replacing the lost or stolen token with a new one, Key-Tokens will be designed as recallable "smart contracts" which can be given to anybody but then automatically "reeled in" and sent to the next person who has scheduled access.   In the event that a key is either "reeled in" or replaced, the vehicle doesn't just stop wherever it is but the driver will no longer be able to authorize any car functions that check authorization such as starting the vehicle.

This process is not geography dependent and can be automated. The process is resilient to hacking because the correct signal being sent from the key to the car requires a cryptographically signed message that can only come from the proper address. An advantage of a disposable token is that if stolen, the token can be quickly and cheaply replaced, then sent to an uncompromised address.

Forging or counterfeiting tokens in real life only requires making a replicate that appears indistinguishable to what you’re trying to imitate. Appearance matters, and important tokens like US dollars go to great lengths to embed features to make them difficult to mimic.

Forging cryptographic tokens? Don’t even bother. If you could check a dollar like you can a cryptographic token, even the slightest, most insignificant deviation from how that particular bill should look would be highlighted in electric green. A big booming voice would shout “That dude is lying to you”. It’s that obvious.

So we have a car key that cannot be lost, stolen, or forged and that can be retrieved and sent, automatically and remotely.

Let’s think about a typical family situation: two cars for two adults and three kids. Both adults are done with the cars most nights by 5pm and it’s alright for the kids to use them until 9pm, but then they should be home. In the conventional key situation, possession is 9/10ths of the law and good enough for the kids to stay out with the car until at least 10 without getting in too much trouble.

With a tokenized key, access lasts until the key is remotely pulled either by a preset timer or a watchful parent. The car remains on until turned off, but the door locks can no longer be controlled and the car can’t be started once stopped without a baleful call to the parents asking for the key to drive home.

One of the services we plan on building at Tokenly is called TokenTime—a multi-token scheduling service where availability can be bought and sold for tokens. Let’s imagine that concept applied to the family cars.

The family has a private calendar that shows the booking schedule for their vehicles. From 9pm–7am the keys are kept in a secure wallet. From 7am–5pm each car is assigned to the adults, from 5pm–9pm there are bookable hours in both vehicles. On the weekends there is usually one car available the whole 10 hour day. In total, the kids have access to 60 bookable hours between the two vehicles per week.

At the beginning of each week, the kids receive 20 "Smith Family Car Reserving" tokens each. One token represents one hour, and they use an app to book desired/available times. They pay for it with the tokens, and once paid for, the slot is no longer available to the siblings. If their plans change, they can relist the timeslot, and someone else can buy it from the original purchaser, trading the new owner's unbooked time for the already booked spot. If someone runs out of time, they can call their brother or sister to be bailed out rather than the parents. The system itself can incentivize not overstaying your reservation by automatically adjusting the disbursement of time in the next week based on non-adherence to the conditions of use.  Flexibility is very possible, but not unlimited.

The cost in terms of tokens for a day's use does not have to be fixed. It could cost more tokens to be out in the last two hours of the five hour window than the first three hour window. Adherence to rules can be incentivized through a more natural process than the current system where people are presented with the opportunity to fail, they take that opportunity, and a cycle of negative reinforcement perpetuates because there is no way to enforce the rules. Tokens and automation present an opportunity not just to families and vehicles, but to nearly every voluntary person-to-person interaction

Why stop at the kids? Open up the free hours to your neighbors or people driving by in the street who place a refundable deposit and have sufficient reputation.  You’ll notice that nowhere in this scenario does the car necessarily have to track anybody doing anything with the car. Remote control of the key means you don’t need to know where people are to remain in control should the situation go wrong. The only thing that doesn’t exist yet is the key and ignition interface plus the app.  

I actually wrote this paper more than a year ago, this is one of the further out the ideas we’re exploring at Tokenly and demonstrates how even non-monetary relationships will be empowered by Tokens, simply because they are so cheap and fast.  I say fast even assuming we're talking about the Bitcoin blockchain because this type of application, like pretty much all Token Controlled Access applications, doesn't need to wait for even a single blockchain confirmation before applying its benefit.  

Imagine it's my turn for the car and i'm standing outside, ready for it. My phone "BLEEPS" that the key-token has been sent to it and then alerts the car.  The car checks its controlling token on the blockchain and sees that there is an unconfirmed send of the key to a new address.  The fact that the key-token has been sent at all means that it was attempted by someone with the appropriate authority to do so, so there's really no need to wait for the bitcoin network before treating them like the current owner.

In a worst case scenario, the person is granted authority until it becomes clear that for whatever reason the transaction is not going to stick, at which point it can be re-sent automatically if authentic or invalidated and reeled in.

Token technology is at a place where nearly anything is possible: we can build anything we devote the resources to building. Our challenge is to expand our thinking to incorporate new possibilities and then drag them into our lives because they are better ways to accomplish the things we do every day.

Types of Users

• The R&D Foundation
• An open hardware design group like the Raspberry Pi Foundation, which creates, maintains and contributes most or all of the intellectual property of the thing that is to be manufactured.
• The Participating Manufacturers
• These users take the intellectual property created by the R&D foundation and manufacture the product(s) either speculatively to stock and sell to end-users directly themselves, or to do production runs on behalf of warehousers.
• The Regional Warehousing and Fulfillment Providers
• A manufacturer might also be a warehouser, but most of the time a warehouser will not be a manufacturer. Warehousers buy in bulk from manufacturers, then stock and sell directly to end users and third party sales organizations
• The Third Party Sales Organizations
• When the above three types of users exist, it is possible for independent sales organizations to emerge, buying in whatever bulk quantity makes sense and redeeming on behalf of customers to whom they sell the hardware at near retail price. At very minimal investment any individual or organization can have access to the decentralized distribution network.

Types of Tokens

• An Open Hardware License token, sold by the Raspberry Pi Foundation to Manufacturers and Wholesalers and redeemed by manufacturers for partner ranking purposes
• Redeemable Raspberry Pi including Free Regional Shipping Token issued by any participating warehouser.
• Optional A “Global Free Shipping” token operated by an otherwise unaffiliated company allowing for global sales and local fulfillment

Details

The Foundation, Manufacturers & The License Token

The Raspberry Pi foundation will issue and sell a token that represents the recommended donation (think of it like an open source license prepayment) for a single manufacture of a standard raspberry pi. Manufacturers will receive competitive benefits when they pay the fee for each unit they manufacture.

When a manufacturer redeems one of these tokens, they have it added to their total on the leaderboards - This leaderboard will be used as the basis for which manufacturers are prominently featured, or recommended on the official open source project outlets.

The two types of users who would buy the pre-paid donation token are Manufacturers and Warehousers. Warehousers order in bulk from manufacturers and would either pay the donation fee as part of their payment or the manufacturer adds it to the cost and pays it on the warehouser’s behalf.

This makes sense because warehousers have the choice of different manufacturers to work with. Manufacturers who are popular can buy the license tokens in extreme bulk to achieve the largest discounts, then redeem on behalf of warehousers who would rather not bother with the token.

The more tokens a warehouser or manufacturer redeems over time, the more prominent their position in the open source community as a supporting part of the reselling and manufacturing ecosystem.

Local Distribution and Global Sales

The core job of a warehouser is to store and provide fulfillment services by acquiring either physical units or tokens redeemable for physical units, and then either selling and shipping to end users or selling and redeeming another warehouser’s token on behalf of the paying customer.

Each warehouser will issue their own redeemable token which includes free delivery within their regional area. These tokens also have quantity discount programs which encourage the creation of sales organizations that can buy fulfillment tokens in bulk, sell units to end users for cash and redeem the fulfillment tokens on their users behalf.

Sales organizations never have to take delivery of the units. They can work with multiple warehousers to ship from wherever makes the most sense. Product could be shipped from their local warehouse or shipped from another warehouse when the token is redeemed.

Warehousers get customers they wouldn’t have had before and whenever they’re the most logistically rational option, they will get the sale.

When a sales organization gets a sale in a new area, it will make sense for them to buy the least quantity that gets them the best discount. That might be 10% off retail when they order 2, or 15% at 10 - Their profit is directly proportional to the quantity they are able to buy, so popular geographic areas or areas where they can get large orders will allow them to achieve greater profit margins or offer greater savings.

Decentralized Cheap and Global Fulfillment

Assume for a moment there are thirty warehousers all issuing their own token, each geographically located and with regional shipping included in the price of their token.

They each sell on the internet. Some of the time they get orders from people who are not in their geographic region. They could ship their own product and charge the shipping fee, or they could buy or swap for a local warehousers token and then redeem it on behalf of their customer. This is interesting.

Even more interesting, a third party individual or company could, without permission, operate a network of thirty one vending machines that allow any local warehouser’s token to be exchanged at little or no extra cost for any other. This means that any warehouser who has inventory in token form can sell an item to a distant customer, have it fulfilled and delivered locally and instead of paying a dollar cost, they barter future fulfillment.
Someone could also independently offer a “Global Free Delivery” token backed by local fulfillment tokens. We could simply add one additional payment option to the thirty one vending machines described previously. Now they can all accept the GFD token in exchange for their local delivery token, and if someone wants to sell their local delivery token they can get a GFD in exchange.

With a small investment on the part of the company running the GFD, they could buy bulk quantities of all local warehouser tokens and have this value backing be publically auditable (and swappable, since it would be in public vending machines) With a public backing, everyone could accept the GFD token and accept any order knowing that they will only ever ship to local users. Yet they would still be able to sell to anyone and offer free shipping so long as they are in the fulfillment range of one of the warehouser nodes.

Just the Beginning

All of the roles described can be filled by multiple independent companies or individuals, none of whom have to coordinate, go out of their way to cooperate, even have relationships and certainly not ask permission before doing whatever they want.

Tokens will add so much to open hardware manufacturing and distribution networks because these are systems that have always intended to be as open and inclusive as possible. They forgo a monopoly on making their own product because they want many people to make it. Whether for philosophical or practical reasons, the economics of the situation and especially the time/value cost of each relationship has made it impossible for all but the largest participant to be more involved than buying units or donating.

This is a wild advancement, made possible by the cash-on-the-barrel nature of Cryptocurrency and Cryptographic Tokens and although trust is required in any type of system using real inventory tied to digital tokens, there is only ever risk when talking about manufacturers or warehousers.

The benefit gained is that anyone who could sell the product at near-retail price to their online or local community now has an easy path to doing that and a clear and predictable monetary gain from doing that. Which means more people using products which in a perfect world would be ubiquitous and pervasive.

The New Token Economy

Whatever you do for a living, Whether you charge by the hour, the item, by project, or per line of code, you can within a few minutes and for less than a dollar create a customized digital token, on the bitcoin blockchain which you control, issue at will and which allows you to know with 100% certainty that anyone who has your token must have gotten it from you or someone you first gave it to because otherwise it provably could not exist.

This token you’ve created has rules you set defining what value you will provide when presented with it and under what conditions it may be presented to you. It can then be priced as you see fit and loaded into an automated digital vending machine allowing anyone in the world with bitcoin or other valuable tokens to buy pre-paid units of your work, which may be given to a friend, swapped or saved as the purchaser sees fit and eventually redeemed on your website in place of other payment and in compliance with the rules of the token.

My name is Adam B. Levine, I founded the long running Let's Talk bitcoin podcast as my vehicle to explore the ideas, people and projects powering cryptocurrency back in April of 2013 along with Andreas Antonopoulos and Stephanie Murphy. In January of 2014 we turned our little website into a podcasting network and in June of that year we launched the first ever rewards program that gave out real cryptographic tokens called LTBCOIN which was how I fell down the rabbit hole and wound up founding a company called Tokenly.

SLIDE 2

Tokens and Cryptocurrencys are like Apples and Oranges, they’re both fruit but of differing characteristics. Both Tokens and Cryptocurrencies use blockchains but a Cryptocurrency maintains its own blockchain and at least part of the use of its token is to pay miners to do that work. In contrast, an unlimited number of tokens, issued by different people, can use a blockchain like bitcoin but as passengers on the network rather than as the network itself. They pay a standard fee using bitcoin whenever they make a transaction on the blockchain but that’s it.

While something like Bitcoin is valuable because it literally is how you pay the postage to send things on the Bitcoin network, what we generically call tokens can’t be used to pay that fee and so for a token to be valuable, there must be something about it that makes it desirable or useful.

So tokens just to summarize are a neutral, brandable, secure, intercompatible cryptographic vehicle which can be created as needed and which can be held by users in a single wallet along with bitcoin and other tokens, Enjoying all the advantages of a blockchain but basically none of the cost.

Now that we have this neutral vehicle, what do you do with it?

SLIDE 3

While the technology is there to do anything you want with a token, those possibilities are restricted by legal systems around the world.

Just to get our terms straight, a currency token is something that has no value except that which the market gives it and an equity type token is anything that looks, walks or quacks like a token sold to those making an investment that is supposed to generate return.

Currency and equity whether in token form or not have all sorts of special government rules about how things can or can't be treated, so it's really less about the technology and what it can do, and more about who gets to decide and whether those being disrupted will give permission to those doing the disrupting.

By contrast, non-currency uses of tokens are not trying to do anything that government or regulatory systems care about too much, they get the advantages of cryptocurrencys robust infrastructure and cashlike characteristics but without much of the drama that seems unavoidable when presenting a revolutionary alternative to the global financial system.

SLIDE 4

If Bitcoin is digital cash, redeemable tokens are digital gift certificates. Once purchased, the merchant doesn’t need to worry about who they owe the product to, they only need to to make sure that they fulfill their obligation to whoever turns up with their token. This means that a token can trade hands dozens or even hundreds of times without the merchant knowing and yet they can trust that if a user has their token, they were paid for it at some point in the past.

So a simple example is, User buys a product in token form, theres a big gap here where a bunch of stuff can happen, and then someone redeems the token for the product it represents.

Let’s look at a more interesting example, one of the most compelling near-term uses for tokens comes from rewards based crowdfunding on platforms like Kickstarter. If Bob helps Alice fund her campaign then Alice will promise Bob a remote when it’s ready to ship. This doesn’t really work well for Bob or Alice because if Bob changes his mind or needs his money back, the only person he can ask is Alice and chances are good Alice has already spent Bobs money actually making the project. This means either Alice Refunds Bob out of money meant to produce the project or Bob is unhappily stuck with no options.

SLIDE 5

Once she’s successfully raised her money Alice could instead create a unique token to represent each type of reward she’s sold to her campaign backers. Instead of getting a promise, they have a cash-like representation of their support that they can do whatever they want with. If Bob wants his money back, instead of asking Alice for a refund he can find somebody interested to buy it from him or even set up his own online vending machine offering extra tokens he has for sale and buying ones he’d like more of.

When Alice is ready to ship her rewards she simply sets up her ecommerce system to accept Credit Cards and cryptocurrency at prices set in dollars along with her rewards tokens at fixed values.

SLIDE 6

The last and probably my favorite kind of use would be access tokens. You can think of them like tradable passwords that grant you specific kinds of access not for spending them but just for possessing them.

If we know that a single bitcoin address can contain any number of tokens, each in a unique amount then a website, service or app can ask a user to prove they own a bitcoin address and then treat its contents as that users property giving them specific powers and privileges within the platform depending on the rules they’ve set up.

SLIDE 7

So looking at our crowdfunding example again, everything is the same as before except in this example Alice has also decided to make Bob’s redeemable token into an access token to allow her to keep in touch with all her supporters.

Now Alice can share private, early or behind the scenes information with all the current supporters or her campaign not based on who supported her originally but who has each of the various rewards now. Alice can let all backers access the same early information or can give different specific permissions and even communicate differently based on the tokens each supporter has.

SLIDE 8

While I like to talk about Tokens generically, there are a number of different technologies and protocols you can use to create them. Since the beginning we’ve used Counterparty and while every protocol has its specific mix of advantages and disadvantages, they all provide the same broad opportunities to create cheap, cash-like tokens. The question really is, once you’ve got the token how do you make it useful for you?

Another commonality between the various technologies is the token by itself can do nothing. Tokens need to be sold and held and, redeemed and stored and all of that comes from server based solutions that abstract the cryptowonk, handle and integrate the token into user friendly, useful situations.

SLIDE 9

This was exactly the situation we found ourselves in after launching the LTBCOIN rewards program. We’d created the token, defined what kind of users would earn it through our rewards program and even built a simple tool that sent out unique amounts to hundreds and eventually thousands of participating community members for a penny or two per week. A gentlemen by the name of Jeremy Lam had started a company called Vennd that was building online vending machines for bitcoin and tokens. From first sight I was hooked, this was the solution we needed and further it could be the basis for a whole variety of tools that would enable everything from threshold based crowdfunding to auctions to charity drives. Only problem was, Jeremy’s company was new and overwhelmed. To make a long story short, I’m still waiting for the solution for Vennd. Over the last year i’ve put my money where my mouth is and built out the concept along with quite a few other necessary tools.

Tokenly is an open source infrastructure company. We’ve built tools that make it easy and fast to do everything from rent a single digital vending machine, offer your users a simple, secure wallet which can have individual tokens branded within it or custom brand the entire wallet to fit your needs. To running a customer branded software as a service platform renting token enabled, shopify-like stores to your customers for a low, flat, monthly rate.

Our products are designed to work together modularly, so when you create a vending machine or an auction you can stick it right into your store and perform normal sales, token sales and token redemptions in one easy, embeddable place. In the next two weeks we’ll be launching our first open alpha and making these simple, inexpensive, powerful tools available broadly for the first time.

Slide 10

So that’s the background, how I went from being a mild mannered cryptocurrency enthusiast to a would be catalyst for a new type of online economy. Here are a few of the opportunities that emerge from all of this.

I live in the Napa Valley, every year there’s a big fundraiser and auction where attendees spend about 15 million dollars in a night. You can donate any time of the year but if you want to participate in the party and auction, you’ve got to do your charitable giving on that particular night. The wine auction could, using a 7 dollar per month vending machine sell a customized charity token year round that represents 1 dollar of charitable giving to the foundation. When the night of the auction arrives, donors from all over the world bid in real time with the tokens received from their donations over the course of the year, and if they find themselves short they can always quickly donate some more to get that winning edge.

Auctions really haven’t changed during my lifetime, whether you’re talking about EBay or that wine auction one of the biggest problems is phantom bidders who either wind up winning multiple items and then don’t have the funds to pay or are just bidding up the price because they can - Running an auction using tokens obsoletes this problem, auctions are cash-on-the-barrel and to increase ones bid when you’ve been surpassed you merely send more of the token to the auction. If you don’t win or have been outbid and don’t intend to keep bidding, you quickly and easily get all your tokens back plus a little bonus from whomever outbid you for your trouble.

And why stop there? Each item being auctioned should itself be represented by a unique, token, redeemable for the prize which would allow people to bid and win items even if they cannot or don’t want to use it themselves. In token form, that prize can be given, traded or even sold without any impact or additional work on the part of whomever is providing the prize.

And this is a commonality in all of the things I’m excited about - They present new, empowering opportunities for users without putting additional burden on the merchant or platform.

Another more layered example is Netflix - Netflix’s streaming service has totally changed the way I along with quite a few others consume content, and for all the advantages it has once you’ve reached the end of Netflix you’ll notice that there are quite a few titles they don’t have and won’t likely get in the near future. This is because the streaming service, unlike their discs-in-the-mail service can only showcase titles which Netflix can get bulk, all-you-can-eat licensing terms, for all their users at a price they’re willing to pay.. It doesn’t matter if I’d personally pay a dollar or $2.50 or $5 to watch a new release because the studios don’t trust netflix and lacking trust, the deal can’t happen.

Imagine for a second that those publishers Netflix has to negotiate with created redeemable and access tokens that represent and allow the streaming of those premium films. Now instead of only having the all-you-can-eat option, Netflix can choose to buy for sale copies (as access tokens) or single use tickets (in the form of redeemables), potentially in bulk and then rent and sell them to their users at a profit.

A user who just to watch the film once would buy the cheaper redeemable ticket and spend it to start the movie or give them access for 24hrs. If you like the movie, buy the access token version and add the title to your premium library. When you’re done with it, you can lend, give or sell it to someone else.

Actually, netflix doesn’t even have to sell these tokens directly - The filmmakers or publishers can set up their own vending machines, market directly to their audience and pay Netflix to associate their token and stream the video as a content delivery network.

If you’re going to do that with Netflix, why not Amazon too? And every other Streaming service for that matter. Tokens upend the current reality where the platform does the picking to one where the content creator,the filmmaker or writer or whatever kind of creative work can Use these closed-gardens as merely an infrastructure provider, rather than having the option to partner, license or go away. If I want to sell my audiobook on Audible, why does the platform set the price and take 50% of every sale? Because they have a monopoly, the content lives and breathes and dies on their platform and at their discretion.

And that, is the big point. Tokens takes the productive output of normal people, which, for all my life, has been trapped on closed, proprietary platforms that eventually turn into abusive monopolies, and puts the power to choose into the hands of anyone who wants to create. In an environment where only bad options exist, the least bad will suffice and that’s the story of ownership on the internet to today. Tokens aren’t for every situation and won’t change the way we’ll do everything but they do give us better options and the power to build your own audience rather than the platform you wound up on.

There is a lot more to this, even after 18 months of thinking about little besides these possibilities, I’m still having new revelations and writing down new use cases all the time.

This isn’t going to happen all at once, Tokens are new and have the potential to disrupt the way things are done in nearly any industry you can think of. I’m looking for partners, companies and collaborators who can see what’s possible here, to join our open source effort and help me drag this vision into reality. Feel free to email me at adam@tokenly.com or chat with me

Tokens, Trains and Right-of-Way

Some time ago I was spoke with Birdie Jaworski, editor of Very Much Wow magazine about tokens and train intersections. Right now train systems have lots of dumb infrastructure (Tracks, switches, etc) carrying smart (automated) trains from smart station to smart station.

So trains and stations need to talk to each other in order to keep an accurate picture of where the various moving parts are. When those moving parts find themselves in the same place at the same time you get a news-worthy catastrophe.

Imagine for a moment we have unlimited funds and manpower to fix this problem. The simplest way would be to station a traffic controller at every single junction with a powerful two way radio, a brain and the ability to communicate with nearby trains.

The procedure would be that whenever a train is approaching a specific intersection, track switch or anything where only one, or some limited number of trains can pass through safely at one time, the conductor radios ahead to that switches traffic controller. If the coast is clear, you know you’re safe to pass because he will tell any other trains that request after you do, but before you’ve safely passed by that the switch is busy and they’ll need to wait.

The advantages of this system are that each traffic controller only has one job and it’s really simple. They’re focused on the one intersection and need only determine if based on recent requests if the coast is clear and the way safe.

The disadvantages of this system are several; you need LOTs of traffic controllers working 24hrs a day and you need them to never mistakenly tell a second train “Yep, the coast is clear”

On some very dangerous mountain railroads, they use a baton system where the rule is that only a train possessing the baton may use the pass, and so the train going up the mountain carries it to the top where it is given to the next train wanting to go down. We can take this practice and make it better with tokens.

This is a hypothetical so lets not worry about current blockchain congestion and confirmation times. Instead of a human with a radio, each train junction has its own token in what is effectively a vending machine - A train approaching will send a bitcoin deposit to the junction and if available, the junction access token would be sent back to the train. The train would then pass through the junction exclusively and once completed would send back the access token and be refunded their deposit.

A second train making the same request would find that the token is unavailable, and would need to wait. If the token was not given back in a sufficient amount of time, the junction would simply create a new token that obsoletes the old one.

With dumb infrastructure and the intelligence at the centers of the network as you have with trains, you have a bunch of different groups of authorities trying to keep one giant accurate picture of the entire network as based on all the participants reporting in through automated and manual means.

Give each junction its own token and the ability to communicate with nearby trains and you have a very simple, highly decentralized network of distributed intelligence where each junction knows its capacity (number and type of tokens) and its current load (how many tokens are in use and by whom).

Using that simple foundation, you can do arbitrarily complex things. A series of switches might ask that you send the token to the next switch in the sequence in order to receive its access token for example. An express train might carry a token in its wallet that gives it priority to receive all access tokens on a specific route, or at certain times. Such a system would support trains run by different companies who don’t communicate with each other operating using the same tracks because all right-of-way is handled on a purely local basis. The rabbit hole here, as always, is deep.

While Tokenly is currently focused on things that are possible and practicable now, these longer term ideas of how cryptographic tokens can be used in entirely unexpected situations are a major opportunity.

And while this example applies to Trains, all the implications are the same for runways on an airfield or even at a highway intersection serving driverless cars.

Distributing authority, power and control away from centralized clearing-houses to empower the individual components within a given system, whether mechanical or human, means that systems become more resilient and more able to deal with changing situations because the actors who are most local and best able to understand the situation have the power to do exactly that.

Feel free to pick apart this example, I'm happy to further expand on the idea in the comments.

The Email

Hey Adam

I’ve just rebooted my computer (after having not done so for a couple of weeks) and suddenly am getting this message about Tokenly Pockets: 

I am a little concerned about “Read and change all your data on the websites that you visit”!

Can you fill me in on what this means? Is it legit or is this a spurious message I shouldn’t be getting?

Regards

Philip

Sydney, Australia

And the response

Hi Philip, It is legitimate and necessary

"change your data pages" basically means that the wallet has the ability to look for certain types of scripts and add elements to the page in response to them. In practice this happens in two situations.

One is where you're buying something and the option is to do the whole copy/paste routine to and from your wallet without clicking away from it or to use our token enhanced payment protocol that supplements the information with a "Pay with Pockets" button that when clicked opens up your wallet in a new browser window pre-loaded with the payment information, all you have to do is verify it is correct, select the appropriate pocket that has enough of the requested token and click the pay button.

The other time this happens is when you visit chain.so (which is linked whenever you make a transaction by clicking View Transaction), normally counterparty transactions are not detected on block explorers until they have one confirmation but the wallet itself can interpret the data on the page and show the user exactly what counterparty data will be confirming so no wait is needed.

To do this the wallet must be able to both read the page (to find the data to parse and display or to find the script that indicates the payment information) and edit the page (to add the button or to add the interpreted data)

Because Tokenly Pockets is intended to act as the best way to buy with tokens on any site, we've expanded the permissions which previously just made these changes on LTB and tokenly.com domains

The "Manage Downloads" permission was needed to enable import/export labels, which is a new feature in this version. If you use multiple wallets you can now export your labels as a .json and the next time you load up that wallet, you can import that label file and it will load up (from the default five addresses that load with a wallet) to however many are named.

If you have more than one wallet or you use more than one computer and want to be able to have consistency between your wallet naming schemes without maintaining a spreadsheet dedicated to the topic this is very helpful. We looked at doing it a couple of ways, this way required more permissions but it was the most private solution, so we picked this way.

Swapbot FAQ, July 2015

Swapbot Multi-Token Vending Machines
 

1. What is Swapbot?

   1. Swapbot is hosted, open source software project developed by Tokenly CTO Devon Weller allowing anyone to operate or rent token-to-token vending machine services.

2. What is a swapbot?

   1. A swapbot is a single set of automation and logic designed to enable its operator to sell a token as simply as stocking a vending machine (or sending a bitcoin transaction).  

3. What is Swapbot.Tokenly.com?

   1. An easy to use, inexpensive hosted swapbot rental service provided by Swapbot developer Tokenly.

4. How can I use a swapbot to buy or sell tokens for me?

   1. Two ways:

      1. You can run Swapbot on your own server along with Bitcoin and Counterparty servers and a variety of supporting tools and services that power Swapbot and other Tokenly technologies.

      2. You can rent a swapbot by the month from someone else who is (Like Tokenly!)

5. How difficult would it be for me to run Swapbot myself?

   1. If you’re a technical person, comfortable with linux server environments with experience running and maintaining commandline cryptocurrency daemons, you’ll probably feel right at home.  If thats you, check out our Github and get involved!
       

6. What’s the easiest way to get started?

   1. Tokenly offers swapbots for $7 per month as a flat hosted rental cost payable in bitcoin and other valuable tokens.  You’ll answer some questions about what you’re trying to do and your bot will be set up within 24 hours of payment.  

7. Are there any other fees if I choose the hosted service?

   1. Just one for the basic Swapbot service.
      
      There is a very small miners fee per transaction that must be paid by the swapbot from its address whenever it dispenses to paying customers.  
      
      Tokenly starts all swapbots with enough BTC fuel for 20 swaps as a courtesy.
      
      Whomever rents the swapbot (the Operator) is responsible for making sure the bot maintains enough “Fuel” to continue operating.  The operator is alerted by email when fuel is running low and can top-up the account from the email.
      
      If customers pay you in BTC the miners fee will be drawn from here but in some circumstances where token-for-token transactions are much more common than bitcoin transactions, very small amounts of BTC will need to be added occasionally.

8. Can I run my own hosted version of Swapbot and sell Token Vending Machine services to non-technical users if I want?

   1. Yes you can!   You must include links to the Tokenly blog and if you make any improvements you’ll need to make your improved source code available either on demand or by publishing it publicly.  
      
      Tokenly services are designed to be offered commercially by many companies, we believe the market for tokens is as small now as it ever will be and so the goal is not to dominate this tiny market but to help show its potential and along with others of like mind, grow the market to its full and behemothic potential.   

9. How many tokens can I sell in a single swapbot?

   1. If you have one type of token you’d like to sell than you’ll need one swapbot.  If you want to sell 10 different types of tokens, you’ll need 10 swapbots.   The token sold by a swapbot is called its “Native Token” because one side of every trade performed by the swapbot will involve this token.

10. How many kinds of tokens can I accept in exchange for my Native Token?

    1. Each swapbot can be configured to accept as many types of tokens in exchange.  You can set a US Dollar price payable in bitcoin and as many other tokens as you choose to accept.  Swaps can be set as fixed rates or {AMOUNT} for {AMOUNT} depending on the style of token.

11. How does someone purchase from a Swapbot?

    1. A user becomes a customer when they send the appropriate amount of bitcoin or another accepted token at the particular swapbot to trigger the swapbot vend.  
       
       When a deposit is detected and the operator defined number of confirmations on the bitcoin network has occurred, Swapbot logic controlling the vending machine address sends the appropriate amount of the appropriate token (based on the operator defined rules of that particular swapbot) to whatever address it received the deposit from.  
        

12. How do I know the rules of a given swapbot?

    1. Each swapbot has a page of its own containing its address, inventory and the rules and rates of all its swaps.  You can most simply buy from a swapbot by using the order interface on its page that will help you calculate the price you’ll need to pay to get the tokens you wish to receive.
       
        

13. Do I have to order through a swapbots webpage?

    1. No.   
       
       But it is strongly recommended that you do, the ordering interface is designed to help you calculate prices and see the rules clearly listed in text that must be accurate because it is determined by the logic of the bot.  
       Fundamentally though, Swapbot is designed to be a fairly simple, modular part of what will become surprisingly complex systems of behavior as Swapbots trade with other Swapbots and who knows what else emerges.
        

14. How can I tell if the rules of a Swapbot I purchase from regularly have changed?
    
    

    1. Each swapbot has what we call a “Changebot”, a colorful, distinctive robot head that acts as a visual fingerprint for all the details important to potential customers of the swapbot.
       
       So long as those details remain the same, the Changebot will look identical each time you visit.  When something, ANYTHING, changes you’ll find yourself looking at an unfamiliar face the next time you visit.
       
       This feature is currently working although tooltips explaining it are not yet implemented.

15. What happens if I send too much or too little in order to buy the amount of token I want?

    1. Unless the amount you send is below the minimum order you will receive proportionally either too much or too little.  It is for this reason we suggest strongly that normal users do so on a given Swapbots page.  

16. What happens if I order less than the minimum order?

    1. bitcoin deposits will be refunded minus the miners fee of the refund transaction, tokens must be manually returned - please contact the operator or contact team@tokenly.com.  To keep from wasting your time, please pay attention to posted minimums.
       
       

17. You mentioned open source, where can I find it?

    1. https://github.com/tokenly/swapbot/

18. Do you have a roadmap for further development?

    1. Why yes! https://github.com/tokenly/swapbot/milestones

19. Have you ever heard of Shapeshift.io?  Is Swapbot like that?

    1. Yes, we’ve heard of Shapeshift (and really like what they do!) and no we don’t think Swapbot really competes with what they do.
       
       Shapeshift.io is an Exchange Service that has a vending-machine style user interface.  Whenever you use shapeshift, you are sending your coins to Shapeshift (the company) and then they send you back the tokens you’ve purchased from another address they control.   
       
       Because of this, there is only one Shapeshift.io with one set of tokens they accept and one set of rates backed by one company.
       
       Swapbot on the other hand is designed to have each individual swapbot be hosted, operated and stocked by different companies and people who have different needs, preferences and peculiarities.   
       
       A hosting provider like Tokenly runs Swapbot on our servers and acts as an infrastructure provider to those who wish to buy or sell tokens but don’t want to run the server.  Each operator individually picks the tokens that are sold and stocked, the tokens that are accepted and the specific swaps that are available.

20. Does Swapbot compete with Shapeshift.io?

    1. No, Shapeshift.io is designed for and focused on tokens which are high enough volume to have reliable prices when sold onto exchange markets in quantity.  Further, Shapeshift is designed to help you accept a token you do not want and convert it into a token you do want, hence “ShapeShift”  
       
       Swapbot can be thought of simply as “Like Shapeshift anyone can run for less than $10 a month for low volume coins and you keep the tokens you collect.

What Tokens Do

A Cryptographic Token created through Colored Coin, Counterparty, Mastercoin or other protocol is really just a decentralization of participants’ trust in the validity of the token itself. Without it, the issuer would have to worry about counterfeiting and fraud, the holders would have to worry about transparency. Using a token solves both problems, they are nearly impossible to fake and the ledger of creation and ownership is public but does not connect to real identities in a way that violates user or issuer privacy.

The token is not held in your hand or even in your wallet. It lives as a data entry on the blockchain and its only function is to be controlled by the latest keyholder it is assigned to, as defined and encoded into the Bitcoin distributed ledger to the standards and best practices as defined by the Counterparty protocol.

The token lets you or anyone else know if they really possess tokens; there is no ambiguity or room to negotiate what the current state of the network is. Knowing what the token’s true name is proves it is not a fake or forgery in the same way a counterfeit bitcoin simply cannot appear in your wallet with no explanation. These individual, unfakeable events are then tallied up; the total is the unmistakably correct balance.

Whether a given token has value is a function of the market (all the people out there who might want to acquire or get rid of the token in question) individually asking themselves: If the thing it is supposedly useful for is valuable or desirable If the person or group promising to give it that value is credible, or not.

Not all tokens should be valuable. The cheap, collectively verified unfakability is a boon for uses entirely non-monetary in nature... But that’s another topic for another time.

Everything Changes

Before the advent of tokens, you literally had to launch your own blockchain with your own miners and developers to take advantage of these basic blockchain features. Some did it anyhow, but for most small or speculative uses this meant it was impractical to even pursue the projects and so many didn’t.

Now the process of creating a token takes minutes and costs dollars with no maintenance or development costs and the security of the biggest cryptocurrency around. What was impossible becomes mundane, so the challenge shifts.

What Tokens Don’t Do

It turns out, the token is just the first part of a larger puzzle and while the token is getting attention, it’s really the other pieces that are both more interesting and most desperately needed.

When you create a token, it’s generally not just to hold onto all of them. You either want to give them to people, or sell them to people or more likely a combination of the two. You want to be able to deliver them in an automated, programmatic fashion and in many cases you’ll want people to be able to redeem them according to the rules you propose and they buy into.

Sometimes that will be for physical goods that need to be delivered, sometimes it will be for digital goods that must be downloaded. Redemption in some cases is used to order goods, reserve time or pay for services.
What about using the token as a way to distinguish your peers from the masses of the internet and have an ongoing conversation with them everywhere you go, in public but only visible to those who ought see?

Inventing the Wheel

All of these things are possible, but the token does none of them by its nature.

This is not an obvious problem until you run headlong into it as was my experience with LTBCOIN, and subsequently I’ve found it to be the experience of most new token creators.

The possibilities are endless, but nothing is easy and to do any of it you've got to invent the wheel.

Nearly a year later, our solution is Tokenly - a technology infrastructure company building open source software solutions that make tokens more useful and usable to everyone.

Things aren’t so good for legitimate users. They aren’t the type of people who seek to evade the DRM, so they get to live with it, while the pirates just have to shake it off once. In some famous cases, like the Sony DRM Rootkit debacle, protections against copying can even cause direct harm to normal users.

At the core of this issue is the fact that software as it has developed over the last tens of years is not scarce.  I can have a fully functional copy installed on my device, give the installation disks to a friend and he can install a functional copy too.  

What do I mean by "Scarce?" I'll let Justus Ranvier briefly explain:

In economic terms, something is scarce if people can’t have an infinite amount of it at a price of zero.

On the surface of the Earth, air is not scarce. It’s not scarce because every human can breathe as much as they are capable of breathing, without paying for the air, and there’s still enough to go around. Because everybody can consume as much as they are capable of without reducing anyone else’s ability to do the same, air does not require allocation. In practical terms, the amount of available air at a price of zero is infinite, therefore air is not scarce.

Almost everything else is scarce, certainly any services that require time and/or energy to produce.

Almost everything is scarce, except software, or other things that exist as information or code on a computer.

Code or information may be rare, protected or tightly controlled, but it is not economically scarce.

Tokens, it turns out, are arbitrarily scarce to meet the needs of whatever the token creator wishes to represent. Using tokens to represent paid access within software applications means it's not just the posession of the software and a password, it's the token which is finite in amount and valuable in ability within the application that is empowered by it.

One concept we’re working on at Tokenly is the idea of Token Controlled Access (TCA), or Token Controlled Viewpoint (TCV), as I prefer to think of it. What you see in a given application, or on a given website, varies depending on what access tokens you possess.

We’re building a generic service that will let you create an account and associate a bitcoin wallet with it. You prove to the service that you control the wallet by signing a transaction or making a .0001 BTC send to an address shown only to you. This proves that you control the private key, which means you control the account, and the tokens it contains are yours.

You can see the prototype system in action at Let's Talk Bitcoin! to get an idea of how quick this one-time process is.

In the future, the service will let applications and websites request information about your verified public addresses — we call them pockets — either generally, or ask yes/no questions to confirm or disprove balances a user indicates it possesses in a private pocket.

A software creator who is getting ready to release a new work can create a token in any desired quantity, in minutes and for just a few dollars.   Each individual token represents one full software license for a single user who possesses it.

A single version of the software would be released, for free, that would contain basic or demo functionality. In order to use the full tool, add additional tools or access content made available as additions, a user would have to log into the app with their TCA login.  This would associate their wallet with their application profile and allow the application to work to its full potential, if the correct tokens are present.

Full-version or add-on packs could be cheaply sold by software makers and purchased via automated access token vending machines — we call them Swapbots. Users could exchange bitcoin and other tokens with the software developers' Swapbots from within the application itself.

Once a user is done with your software or wants to lend it to a friend, they just sell or send the token as simply as sending them an email. Their access to the full product is removed and transferred to whomever they desire. We’re turning licenses into ownership, and part of ownership is being able to sell what is yours.

It’s sort of a throwback to what Shareware should have been, except at the time there was no secured distributed neutral ledger to keep track of token balances, nor the Bitcoin network to enable person-to-person transfers.

Tokens give us a second chance at a world beyond ineffectual and painful DRM. With tokens, we can turn software into property and solve two big problems:

Software is not an economically scarce product, but it's sold like one.
Software buyers don't own what they've purchased.

In doing so, we can empower software buyers to hold a tangible, valuable thing, rather than getting stuck with the worst of all worlds — software they do not own and that does not trust them.

This is just the start of the impact of tokens that we’re going to see on the world of software and games. If this Tokenly usecase sounds like something you'd like to pursue, leave a comment, or email team@tokenly.com.

Remember Napster? They were the folks who introduced peer to peer sharing of music and who were crushed because the service they offered (peer to peer duplicative sharing of music at basically no cost to either party coordinated by a central server) was dangerous to the status quo (of music publishing).

The services provided by a social network are multi-faceted. On the one hand youve got cat and baby pictures, but on some special days youve got the Arab Spring or the Occupy movement. Back in those early days of social networks being used to communicate between mass groups of people who didnt know each other, these efforts were heralded by the American media as proof of the platforms utility in breaking down the walls put up by repressive governments to control the ability to organize.

In more recent days? Not so much.

Russia makes Facebook block page of Putin's top critic

December 21, 2014 5:10 AM

Moscow (AFP) - Russian authorities convinced Facebook to shut off a page inviting people to attend a rally in support of an opposition politician, drawing ire from Internet users Sunday. Supporters on Friday created an event page for January 15, the day President Vladimir Putin's biggest critic Alexei Navalny will hear his verdict in a controversial embezzlement case which could see him sent him to prison for up to 10 years.

Russia's Internet watchdog Roskomnadzor said Sunday that the page has been blocked on orders of the general prosecutor. The prosecutor "demanded to limit access to a number of resources calling for an unsanctioned mass event, including social networking groups. The demand has been fulfilled," RIA-Novosti news agency quoted spokesman Vadim Ampelonsky as saying.The Facebook event, called "Public gathering to discuss the verdict", had over 12,000 people signed up at the time it was blocked, and now opens only through a non-Russian IP and only for non-Russian users. Navalny, whose leadership role in the opposition was built up over the years via his popular anti-corruption blog and carefully-managed Internet campaigns, criticised the social networking giant for quickly bending under Kremlin's pressure.

"It's a rather unpleasant and surprising behaviour by Russian Facebook. I thought they would at least demand a court order rather than rush to block pages as soon as crooks from the Roskomnadzor (the Internet watchdog) ask," he wrote on his personal page. Former US ambassador to Moscow Michael McFaul wrote on his Twitter blog that the block set a "horrible precedent" and that Facebook should correct their "mistake" as soon as possible. Supporters quickly signed up onto newly-created event pages and made new ones blasting Facebook's "censorship". Navalny, a 38-year-old lawyer, is accused together with his brother Oleg of embezzling nearly 27 million rubles (more than half a million dollars at the exchange rate at the time) when Yves Rocher Vostok, the company's Russian wing, used their delivery firm. The case is only one of many against him. A previous probe into embezzlement of a state timber company saw him sentenced to five years though the sentence was suspended later.

At their core, social networks are about connecting and enabling communication between people who might know each other or might not know each other, on a common topic of interest or through connections in the social web.

The beautiful thing about a pervasive service that everybody uses, is anybody can be reached by anybody else without doing anything complicated like being part of multiple networks.

The problem with a pervasive service is that if the company that plays caretaker to that service is weak, then you've got one of the best tools ever invented for not only putting the kibosh on protests, but a time-stamped record and investigative tool to look back and prove just how crazy that guy really is.

The problem is not social networks, its the caretaker company more concerned with its own survival and profit than the utility and neutrality of the network. There is no way around this issue. The bigger the company, the easier it is to pressure them if you're important, as we see with the Russian situation above.

The problem is Centralization. The fact is, a single company pressured in this way will always give in if they perceive the potential damage from declining the choice to be worse than the push-back theyll get from their users for giving them up.

Decentralized social networks are not a panacea, but in this particular circumstance they just dont have the vulnerability. Russia or any other country for that matter can achieve censorship simply by looking at Facebook like a big fat sheep and baring its teeth menacingly. Facebook might be able to hold out for a while, demand a court order before complying as part of its policies and procedures, but when the ability to do business in the country relies on the continued good will of that countrys leadership, you'll find its an easy choice for them to make, future public handwringing not withstanding.

On the other hand a decentralized social network has no company with servers behind it storing user updates. One or many companies only make and improve the open source software utilized by users and organizations to collaboratively create the network through the process of using it. Sure, Russia could threaten the creators of the software, but as they have literally no control over what it is being used for and by whom, the threat is for public eyes only.

Think about social networks as seacraft. A decentralized model is like a million rafts loosely lashed together, one for each user. It can grow as large as is necessary in any direction. If necessary it can be separated into chunks that will still each operate as a raft made of rafts. The Facebook model looks a bit more like the titanic, as the number of users grow the ship must get bigger. Its not only more troublesome to scale, but presents a huge target to anyone looking to mess with a lot of people.

These things dont exist yet; technologies like STORJ and MAIDSAFE represent the fascinating development of decentralized, peer to peer storage and computing networks that could power such a thing. But the first shot has been fired in the battle over the purpose of social networking. If all you wanted was dogs wearing hats, nothing has changed for you. If you think social networks can do social good that won't necessarily be approved by the status quo, you should start thinking about decentralized social networks.