By Lori Jo Underhill
The collective narrative about blockchain, digital ledger, and digital asset technologies has adopted the term “utility token” in common usage terminology to describe software offering function and usefulness outside of any economic value.
However, the term “utility token” is not an appropriate usage of the two individual words within that term to properly define the descriptive intent behind the common usage of the term. The words token and asset are associated with economic value and not all digital ledger components have inherent, intrinsic, or associative economic value.
The term “utility” as defined by Merriam-Webster implies value and economic value. (See below for complete definition)
The term “token” as defined by Merriam-Webster implies value or economic value. (See below for complete definition)
Definition: A piece of software that is functional and useful, is not an asset, has no inherent economic value, external economic value, and does not represent an asset or a store of value that has economic value. It could be fungible or non-fungible depending on its use case. The supply of the software could be finite or infinite depending on its use case. The software can be a manifestation of something, or represent something underlying that may, or may not, have utilitarian value; however, the unit itself has no economic value.
Examples: A Vote, Identity, Digital Container, Measurement, Store of Information, or Store of Data.
The term “digital” is defined as:
1) related to digits as characterized by computer technology.
The term “unit” as defined by Merriam-Webster:
“noun” 1a: the first and least natural number, b: a single quantity regarded as a whole in calculation, 2: a determinate quantity, 3: a single thing, person, or group that is a constituent of a whole, 4: a piece or complex of apparatus serving to perform one particular function, adjective: 1: being, relating to, or measuring one unit.”
Proper definition, classification, and categorization will determine appropriate regulation, taxation, and oversight of digital ledger components with and without economic value. This will further support the development of digital technologies and offers regulators proper guidance in determining the appropriate legal and regulatory treatment for all of these technologies.
It is now time to create proper context, define terminology, and promote fundamental understanding about the Digital Economy. A properly defined framework which creates context allows the world to understand, frame, and utilize digital ledger technologies that execute solutions and technological implementations forwarding innovation evolution. Proper definition will create a cohesive environment for development, regulation, integration, and adoption.
It is time for “Defining the Digital Economy” ©2018 Lori Jo Underhill coming soon.
The term “utility” as defined by Merriam-Webster implies value and economic value.
“noun: 1: fitness for some purpose or worth to some end, 2: something useful or designed for use, 3: a service (such as light, power, or water) provided by a public utility, 2: equipment or a piece of equipment to provide such service or a comparable service, 4: a program or routine designed to perform or facilitate especially routine operations (such as copying files or editing text) on a computer, adjective: 1: capable of serving as a substitute in various roles or positions a utility infielder, 2: kept to provide a useful product or service, 3: serving primarily for utility rather than beauty, 4: designed or adapted for general use a utility tool, 5: of or relating to a utility a utility company.”
The term “token” as defined by Merriam-Webster implies value or economic value.
“noun: 1a: a piece resembling a coin issued for use (as for fare on a bus) by a particular group on specified terms, b: a piece resembling a coin issued as money by some person or body other than a de jure government, c: a unit of a cryptocurrency Bitcoin tokens, 2: an outward sign or expression 3 : symbol, emblem, b: an instance of a linguistic expression 4: a small part representing the whole c: something given or shown as a guarantee (as of authority, right, or identity) 5: a member of a group (such as a minority) that is included within a larger group through tokenism especially : a token employee 6: distinguishing feature, adjective: 1: representing no more than a symbolic effort by serving or intended to show absence of discrimination, 2: done or given as a token especially in partial fulfillment of an obligation or engagement a token payment.”
Lori Jo Underhill B.S., J.D. is a Digital Economy Analyst, “Digital Economist”, Bachelor of Science in Business Administration from Arizona State University in Tempe, Arizona, USA, and Juris Doctor from Southwestern Law School in Los Angeles, California, USA. She currently works as an Executive Consultant with over 30 years’ experience in hardware and software technology and media. https://www.ljuassociates.com https://www.linkedin.com/in/lori-jo-underhill/