Bitcoin is not just a protocol or money, it’s a new business model for Open Source Software.Prior to Bitcoin, you had to raise money, write software, distribute your product, build a business model, and work towards liquidity.Angels, VCs, salespeople and bankers guided you the entire way, through a maze of tolls and controls.The Bitcoin model for crowdfunding dispenses with everything except the software: This is true crowdfunding – get funded by your users in proportion to their usage.Reward early adopters, network operators, and developers with upside.In economics, the artificially scarce token used to allocate scarce resources is called “money.” So Bitcoin is crowdfunded OSS to run an Economic network.Now, a new generation of Appcoins can be created as open source software, crowdfunded into existence, and go public on day one.They can run networks where Bitcoin may not work, or where separate funding and compensation is needed.The Tor network is slow because it relies on volunteers to relay traffic.

Anytime we see a line, the product in question is underpriced.Let’s crowdfund a Torcoin – users of relays will pay in Torcoins and operators of relays will get paid in TorCoins.Founding developers collect equity when TorCoins are first mined and sold.Non-founding developers and network operators are paid revenues from newly mined coins and transaction fees.Can we just use Bitcoin instead of Torcoin?Isn’t money supposed to be fungible to all use cases?bitcoin raw blockPerhaps not – Bitcoin’s transaction speed is too slow for a dynamic network allocating bandwidth – 10 to 60 minutes is far too long to negotiate with a relay.ethereum atm machineAnd payments have to be anonymous.bitcoin casino earningsSo a fast-clearing (Fastcoin can clear a block in 12 seconds), fully anonymous (likeZerocoin) variant is needed.ethereal yacht owner

What else can we allocate in a network?NameCoin is already working on Distributed DNS.Can we build a striped, encrypted, high-availability data store using Boxcoin which pays for disk availability?Can we build a caching infrastructure using Cachecoin which pays edge nodes with un-used resources to cache large, static content?A DDoScoin used by web servers to throttle incoming browser requests?A PKIcoin that provides a global, un-assailable encrypted and anonymous messaging network?bitcoin php interfaceAre there more applications, like Bitcoin, that map to the real world and bypass network resources altogether?bitcoin php interfaceIn a world of numerous Appcoins, easy to create, integrate, and crowdfund, what’s the role of Bitcoin?Bitcoin itself will be used as the currency of choice in many cases, when its slow transaction clearing and pseudonymity are not issues.

And most of the world’s resources are not networked software which can benefit from its own Appcoin.Some Appcoins may just be a protocol layer on top of Bitcoin to explicitly reward the creators, operators, and early adopters of the Appcoin’s network.PKIcoin may only be a financial incentive,  security outsourced to the Bitcoin mining pool, with entry / egress to PKIcoin through Bitcoin.In the cases that the Bitcoin blockchain is insufficient, such as Torcoin, Bitcoin will still be a reserve currency of sorts for moving into and out of Torcoin.Bitcoin is more than money, and more than a protocol.It’s a model and platform for true crowdfunding – open, distributed, and liquid all the way.Thanks to Balaji Srinivasan for helping think through many of the ideas in this post.It’s really at least half his work.If you don’t follow him on twitter @balajis , you really should).Editor’s note: Lisa Cheng is the Founder of VANBEX a marketing and research firm specializing in digital currency, blockchain protocols, and decentralized technology.

Bitcoin is still in its early stages of market development.We are going through a slow process of realizing how data is where we will make our next evolutionary leaps in advancement.For this reason I have been working in bitcoin and on bitcoin blockchain technologies, to help realize a future where applications, networks and users will live homogeneously in a self-sustaining universe.This future environment of sustainable technology will be decentralized in the sense that resources will be cyclical and spread across distances and dependencies, and will be based on users driving their own technology needs through direct interaction with the platforms and applications.This next evolutionary phase is what I have termed “tokenizing the user experience.” The tokens driving this evolution are part of the bitcoin 2.0 ecosystem and are created using the bitcoin blockchain.They can also be referred to as “metacoins,” because they reside on a metalayer of the blockchain protocol.Some members of the bitcoin community also refer to them as “app coins,” because they are application specific.

Maidsafe, Storj and Factom are among the first projects to demonstrate how cryptographic tokens can be used in support of decentralized applications and infrastructure.In addition to leveraging the blockchain’s open and transparent ledger, projects that create these metacoins using cryptocurrency are able to easily record, track usage and distribute tokens on a global scale.This means that at any point in time, a project can confirm how many tokens are being used, which address is holding them, and where it originated from.It’s a new form of user interaction where the tokens represent market interest in the project and user activity itself.To ensure security, bitcoin was developed using a series of algorithms that give all cryptocurrencies, including bitcoin and tokens, their ability to validate information secured by the laws of mathematics.For online commerce, where the use of traditional payment methods are easily faked, proving authenticity is valuable to many, including those who need to verify things quickly and easily.

The use of cryptocurrency itself results in a new form of commercial interaction where the issue of counterfeit money is nonexistent.This model has value when building a decentralized network of different systems that is not restricted by borders, territory, or language.And because this approach to network tokens is still new, we will likely see the emergence of more projects leveraging a token model for bringing forth new and innovative ideas.As such, the community has seen the rise of initiatives that pursue a political model of the blockchain where an ideology is tied to a coin.Storj’s token is used to purchase storage space on its cloud network.Conversely, users are also able to earn these tokens by renting out their extra computer hard drive space for use by DriveShare, an application part of the Storj network.All tokens are transferable to other users, and every transaction is traceable.Based on the transaction flows of the token itself, the Storj team could determine how people are using the network and analyze how better to direct network resources based on user activity.

The concept of network-access tokens has been around for a long time; it’s still used every day for security access in the form of RSA, given to users who purchase software in the form of license keys, and distributed to gamers who pre-purchase gaming codes.They represent a standard method of authentication to grant user access, provide network clearance and prove identity.The use of cryptocurrency in this form combines what software companies have traditionally used for proof of purchase with immutable tokens.This results in applications that encourage fluid user interactions.It’s important to note here that projects launching via tokens on the blockchain encourage decentralization, open-source development and transparency.Tokens in effect are used throughout a decentralized network, as users are able to earn and spend the coin across systems and applications, where its advantage is that it is a verifiable and an “un-fakeable” piece of data.This type of provable and transferable token is valuable as a form of network asset that can be traded among users and earned as a commodity.

As open-source projects decide to issue their own tokens using the blockchain, we approach a new era of decentralized application development where entire systems are fueled by their own assets, which can protect and incentivize the entire network.Development projects that leverage tokens in this manner benefit from owning the process of user acquisition and licensing.Third-party issues, such as failed credit card processing, delayed bank transfers and fraudulent transactions, are no longer impediments to growing the user base.Bitcoin has been characterized as a distributed system with fault-tolerant logging and globally consistent sequencing as written by the alias Satoshi Nakamoto.The author(s) of the original bitcoin paper may not have anticipated this turn of events, which presents the blockchain as a model for scalability and decentralization capable of supporting grassroots application development.By this system we are witnessing how user trust is delivered with the token, which takes our understanding of bitcoin as a currency, to bitcoin and the blockchain as a platform — extending the use of cryptocurrency beyond simple peer-to-peer transactions toward a decentralized model for incentivizing verifiable data.