1.
Is there a token for that?
Tokens demystified.
Jan Brejcha, Ph.D.
Business designer, Co-founder at Adahoy.io
jan@brejcha.name
@jbrejcha

2.
Contents
• Summary
• Initial coin offerings
• Tokens
• Regulation
• Conclusion
• Resources
• About

3.
Summary
• This presentation aims at providing a brief introduction to crypto
tokens, how they can be beneficial for the users, and why they can
disrupt current industries. Various examples will be discussed.
• Crypto tokens are a special kind of signs representing objects and/or
functions living in the underlying blockchain, and can be generated
by smart contracts.
• Tokens enable the viability of open source protocols, and dApps
(decentralized applications), which was previously unattainable.
• Current regulatory frameworks try to mitigate frauds in ICOs, while
helping establish tokens as a new asset class.

4.
@ParisHilton

5.
http://coinschedule.com
Total amount raised in ICOs ~$2,2B
The DAO $168M

6.
http://coinschedule.com
Total amount raised in ICOs ~$2,2B

7.
http://coinmarketcap.com
Total token capitalization
• $146,6B: 146.636.364.157,00 on market

8.
http://coinmarketcap.com
Total token capitalization ~$150B
• $146,6 b, 146.636.364.157,00 on market

9.
@ParisHilton @StephanTual

10.
@ParisHilton

11.
http://www.marketwatch.com/story/this-is-how-much-money-exists-in-
the-entire-world-in-one-chart-2015-12-18
Money in the world ~$1,2 quadrillion
Bitcoin

12.
Tokens
• Crypto tokens are a special kind of signs representing objects
and/or functions living in the underlying database (a distributed
ledger, or the blockchain in our case), and can be generated by
smart contracts.
• In this fashion, virtually anything can be tokenized, bringing the
benefit of easy trading, low costs, and high availability of any asset.
• Tokens virtualize already virtual objects (create simulacra), which
can be tracked on the blockchain
• Crypto tokens are currently niche and controversial. If present trends
continue, they will soon be seen as a breakthrough in the design
and development of open networks, combining the societal
benefits of open protocols with the financial and architectural
benefits of proprietary networks. (Dixon)

13.
Token creation
• Tokens are issued through Initial coin offerings (ICOs – mainly for
financial tokens), or Initial token offerings (ITOs – mainly for non-
financial tokens) following specific rules.
Token issuance rules govern the:
• Number of tokens issued
• Time period of the issuance
• Token price (discount v. premium)
• When the issuance ends (time v. goal)
• Type of issuance (one-off v. continuous)

14.
Token functions
Tokens are used as a media in decentralized applications (or dApps)
to perform various jobs. The purpose, or pragmatics, of the tokens is to
represent an entity/feature:
• Right, value exchange, toll, function, currency, and
earnings. (Moughayar)
• Intrinsic tokens, asset-backed, rights-related, currency (Neufund)
Most importantly, tokens align network participants to work together
toward a common goal— the growth of the network and the
appreciation of the token. (Dixon)

15.
@ParisHilton

16.
Token looming regulation
Regulation:
• US: Securities and Exchange Commission (SEC) – token as a
security, when acquired for money and with expectation of profit,
voting rights
• China: Total ban of tokens, ICOs, crypto currency trading
• EU/CH: Drafting a policy of tokens as a new asset class
Strategy: Circumvent v. comply:
• Use an ITO instead of ICO
• Exclude US participants/investors
• Limit to accredited investors (KYC)
• Register the token as a security (asset-backed token)
• Use only non-regulated features of the token (access token)

17.
Token disruption potential
Tokens bring the opportunity to revisit and extend the early ideas
behind the World Wide Web (as pioneered by sir Tim Berners-Lee),
such as:
• decentralization (and the removal of third parties),
• non-discrimination (or network neutrality),
• bottom-up design (or permissionless, unrestricted innovation),
• universality
• consensus (here, about the rules and standards).
• Tokens enable the viability of open source protocols, and
dApps, which was previously unattainable.

18.
http://apple.com
Instead of having ”an app
for thattm” in a closed
ecosystem…

19.
http://status.im
…one can engage with open ecosystems
with “a token for that”.

20.
@VladZamfir
…while paying, of course, great attention
to the user experience!

21.
Conclusion
• Crypto tokens enable a potential “breakthrough in the design and
development of open networks, combining the societal benefits of
open protocols with the financial and architectural benefits of
proprietary networks”
• The current ICO frenzy risks of creating negative PR because of
many scams, unrealized projects
• Tokens have a potential of disrupting current business models,
and enable novel viable models

22.
Resources: Online
• BREJCHA, J. https://medium.com/@jbrejcha/is-there-a-token-for-that-
c0002cfecb11
• COMPETITIVE COMPLIANCE.
https://medium.com/@Competitive.Compliance/9-token-functionalities-and-their-
compliance-implications-990b0c0cd164
• DIXON, C. https://medium.com/@cdixon/crypto-tokens-a-breakthrough-in-open-
network-design-e600975be2ef
• MOUGHAYAR, W. http://startupmanagement.org/2017/06/10/tokenomics-a-
business-guide-to-token-usage-utility-and-value
• NEUFUND. Blockchain Policy Initiative Report.
https://docs.google.com/document/d/1reHjcxSYk4coJDH4DzoV13iefE84hX19Og
fDXkNPQ4c/edit
• SEC. https://www.sec.gov/litigation/investreport/34-81207.pdf

23.
Resources: Books
• ANTONOPOULOS, Andreas M. Mastering Bitcoin: unlocking digital
cryptocurrencies. O'Reilly Media, Inc., 2014. ISBN 978-1449374044. Available
commercially from Amazon. Czech translation:
https://www.bitcoinbook.info/translations/cs/book.pdf
• CHAMPAGNE, Phil. The Book of Satoshi–the Collected Writings of Bitcoin
Creator Satoshi Nakamoto. 2014. ISBN 978-0996061315. Available
commercially from Amazon.
• MOUGAYAR, William. The Business Blockchain: Promise, Practice, and
Application of the Next Internet Technology. 2016. ISBN 978-1119300311.
Available commercially from Amazon.
• TAPSCOTT, Don; TAPSCOTT, Alex. Blockchain Revolution: How the
Technology Behind Bitcoin is Changing Money, Business, and the World.
Penguin, 2016. ISBN 978-1101980132. Available commercially from Amazon.
• WATTENHOFER, Roger. The Science of the Blockchain. CreateSpace
Independent Publishing Platform, 2016. ISBN 978-1522751830. Available
commercially from Amazon.

24.
Please, contact me for more information:
Jan Brejcha, Ph.D.
Business designer, Co-founder at Adahoy.io
jan@brejcha.name
http://jan.brejcha.name
https://www.linkedin.com/in/janbrejcha
https://twitter.com/jbrejcha