Token Economy: Safeguarding Community Core Values


As discussed in ‘A Contribution to Creativity’ in this series, technology platforms have opened up new mechanisms to reflect, embody and proliferate the core values of different communities. Core values such as family values, environmental justice, or the desire for specific foods are implicit compasses that guide human actions. While mainstream social media platforms are deliberately filtering core values in weighted proportions, this article proposes a blockchain-based token economy to safeguard the core values of communities in a bottom-up manner.   

Scale, Time, Money

Our value system is structured like an onion – as we peel off the layers, getting closer to the centre, we burst into tears before we finally reach the core values. Politicians and marketing people use ‘core values’ as a catchphrase, but in reality, we rarely discuss our deeply cherished core values. We need to bring core values down from their pedestal. Instead of portraying them as grandiose ideals, we should interpret them in the context of daily life. After all, our core values are simply what we want most.

Core values are not lofty ideals

‌When we say ‘community’, we refer to something its members have in common. A country is a group of people living in a certain area of the Earth, so they are experiencing similar weather, breathing similar air and probably facing similar threats in a pandemic. Being in close proximity implies people will be interacting with one another to satisfy their basic needs, but they may or may not share core values. Some sociologists thus regard nations as ‘imagined communities’.

Online communities are different. People get together online not because they share anything in common physically, but because they share similar hobbies, interests or values. As a community strengthens its bonds, it goes from people simply sharing similar hobbies to people echoing each other’s core values. The better core values are defined and demonstrated in a community, the tighter is the community.

Think about it this way: TikTok is a community where people enjoy lip-syncing and sharing funny videos. Instagram is a community where people like sharing square, filtered photos, later rectangular photos too, and later stories. Twitter is a community where people write concise stories with intent to inspire or call to action. When a company designs an app, it is in fact defining the commonalities needed to form a community. When it motivates behaviour, it is shaping culture. When it inspires beliefs, feelings or perceived truths, core values are formed, echoed and strengthened.

Online communities work differently from nations

Most dictionaries explain that ‘value’ has two different meanings: monetary worth, and judgement of what’s important. In order to effectively embody value in a community, first we need to realize that the two meanings are in fact one. Money is created by humanity to measure, store and exchange value. For thousands of years, it has worked effectively for evaluating basic needs. Core values such as belonging, love, esteem and self-actualization, on the other hand, can hardly be measured by money. As a result, the word ‘value’ carries two seemingly different meanings.

It is commonly believed that the very nature of core values prohibits them from being measured. But from another perspective, it might as well be the limitation of money, or most precisely, fiat currency, that fails to measure the value of some core values. Fiat currency is the ‘official money’ of a country, backed by law and military power. It is used to measure the value of the basic needs of the citizens, because that is what people share in common. However, living in close proximity does little to align core values; people can never reach consensus on how much certain core values are worth.

In the physical world, most people are born as citizens of a certain country, and come to adopt certain values as part of a national community. But online communities work the other way round. People join online communities, which often require no permission, based on their own free will. Typically, the founding members hold a set of core values, define features to reflect and embody those values, and invite members to join, interact with one another, and form a community surrounding those core values.

Take Creative Commons as an example. In 2001, Lawrence Lessig and other founding members created the Creative Commons license to embody their core value of open access to knowledge and creative works. Content creators around the globe adopted the license without payment or permission. It is as if one could immigrate freely to a virtual nation, citizens of which share a core value on a specific topic. Concerning, say, the General Data Protection Regulation of the European Union, members of Creative Commons would share similar views. It is highly unlikely, however, that citizens of a certain nation would hold similar opinions on this topic.

Token economy: you reap what you sow

Token economy: you reap what you sow

Whether it is TikTok, Instagram, Twitter or other social media, each arena entails a very particular set of skills, which are both the ‘core values’ of the community and the rules of the game – they can be termed the ‘proof-of-x’ features. On such platforms, x can be something like a video, a story, a post, or a paper, or it can reflect something like time, effort, creativity or social contribution. Those who share the same values and act according to the proof-of-x principles will receive tangible or intangible recognition from the community. This is similar to the proof-of-work mechanism employed by the Bitcoin blockchain, where a node gets newly minted bitcoins by beating the others to find the ‘nonce’, i.e., the key to the next block, relying on computational power.

Contrary to traditional wisdom, social media are addictive not because they are ‘virtual’, but because they are ‘real’ – you reap what you sow according to the protocol. They have a well-defined reward mechanism, allowing you to reap the benefits of your own effort. It is in the physical world that man proposes, God disposes.

On social media, rewards come in the form of social capital. Social capital is the ‘fame’ in ‘fame and fortune’, but in every practical sense, there is not much difference between the two. After all, social capital and traditional currencies are interchangeable, like purchasing Chinese yuan with US dollars, the only difference being the lack of a bureau de change with defined exchange rates. Many people are busy managing their fan pages so that one day they can sell their own products, make money from advertising others’ products, or try to influence the outcome of elections through discourse – in other words, convert social capital into traditional currencies. The conversion works the other way round as well – some people use money to purchase likes and followers.

To go further than social capital, community currency is a more concrete form of recognition and reward. There have been attempts at issuing community currencies in the physical world. For example, St. James’ Settlement in Wanchai, Hong Kong, runs a social service project that facilitates the exchange of services by paying people in ‘time coupons’. With time coupons as a community currency, the core value of equality is effectively realised. However, due to technological constraints, communities that have adopted currencies of this type have not been able to authenticate them for general public use, and communities that shared similar values but were based in different locations could not adopt the same currency, so their circulation has been very limited. 

Thanks to the development of blockchain, it costs only a little to issue a set of tokens on the ‘world computer’ Ethereum, and in a matter of minutes a set of tokens are generated, whose amount and authenticity can be verified by the public. Communities can now issue tokens, provided that their core value can be represented by proof-of-x, which can then be computed through codes, supported by blockchain. Whenever someone generates value, a number of tokens can be issued as a reward – they serve to quantify value; digital community tokens are easy to maintain – they can store value; when transactions are carried out with the tokens in a community that recognises the same values, the tokens will be able to fulfil the third function of traditional currencies – the exchange of value.

With blockchain tokens, it is now possible to issue worldwide time coupons. People can join the virtual nation simply by accepting time coupons for their service, and paying for services in time coupons. The core value of ’the nation of time coupons’ is, very clearly, equality.

Clock and Euro

Blockchain tokens are a supplement to fiat currencies

Since community tokens are designed to represent the values of a specific group of people, they are certainly not as versatile as fiat currencies, which have been in circulation for a long time and apply to all commodities. However, community tokens offer many unique advantages. ‌The most obvious is that such tokens reflect and embody the core values of a particular community, translating abstract values into concrete action, so that core values are no longer out of reach. The process of putting one’s values into practice becomes more fulfilling when efforts are regularly rewarded. Blockchain tokens ensure a fair distribution of remuneration among the producers of value rather than those with vested interests, and they provide incentives for members to create value rather than hoard assets. If community members can relate their daily work to their core values, there will be less alienation between what they believe in and what they are actually doing.

Some people think blockchain tokens are an enemy of fiat currencies. The opposite is true: they are a supplement. When we live in a society that does not recognise our core values, we tend to view our interaction with society as a necessary compromise with reality. Now, with the emergence of blockchain and community tokens, we can afford to adopt a more proactive approach by engaging in various online communities that reflect our core values.

(Translator: Tse Kwun-Tung)