The right to mine
Tokenize and mine are the fundamental rights in the crypto-economy
In the beginning, wanting to standardize tax collection, government created currency. Only government had the capacity. Not just military and legal authority, they had unique access to wealth and distributive technologies like foundries and printing presses.
This centralization underpinned our economy development, and there has been no practical alternative for millennia - until Satoshi Nakamoto’s brilliant 2008 white paper.
The document laid out the framework for a peer-to-peer currency that did not require government or banks. Pioneering Bitcoin developers, to their great credit, did the hard yards that implemented the solution.
In time, the increasing value of coins created with this Proof of Work system incentivized processing power. A mining sector developed and became increasingly centralized. The unforeseen consequence of Proof of Work was to limit the wide distribution of coins. So to date, only a small number of people own cryptocurrency and the blockchain has not reached its potential as a mainstream transaction platform. And the feverish competition for processing power consumes vast amounts of electricity.
The best known alternative, Proof of Stake, solves the problem of high electricity consumption but it leads down the same road as Proof of Work. It institutionalizes the current ownership of the money creation system. ‘I owned 10% of the processing power’ becomes ‘I own 10% of the right to mine’. People with big cryptocurrency balances will retain their share of coin production.
Who would be a more deserving member of a currency production club? If not government, if not banks, if not the crypto-elites, who has the right to tokenize assets? Well, what about the two sectors we have so far failed to include in the crypto eco-system? Consumers and business.
In the model we have developed (Jasper), if you produce a bottle of beer, you have the right to tokenize that bottle. You are the creator and owner: you have the right to inject currency into the economy to match your economic contribution. And you can profit from its tokenization; passing that value to consumers or moving it to other sectors of the economy. Alternatively you could apply that value to paying your taxes or suppliers. Our coin would facilitate exchange and activity in the real-world economy, rather than fueling speculative profits for an uninvolved third party.
An irrevocable permission to mine would be granted, subject to the entity agreeing to adopt the consensus protocol and to accept the coin as a payment medium. The consensus algorithm needs to be fair, but it does not need to be a lottery based on hash power; a round-robin arrangement will suffice if identity duplication can be prevented and nodes can be protected. Capacity to mine should be commensurate with past, current or intended economic activity. A company that mines Jasper for a number of years could accumulate an asset to buffer hard economic times. A manufacturer could use Jasper to reward buyers and a startup could borrow Jasper to fund an advertising campaign.
Consumers too are genuine participants in the economy. If we make it easy for them to mine coins (Jasper lets them mine real-world products without the need to handle currency), they can contribute to the decentralization and growth of the network. In return they earn rewards and discounts from businesses.
The right to create money lies with the government but the right to mine and tokenize belongs to those who create economy activity. The impact is to decentralize, rather than concentrate wealth. It will lead to fresh economic growth and bring cryptocurrency into the mainstream. Jasper is the first ‘right to mine’ system and the Jasper Foundation looks forward to handing the evolution of Jaspercoin over to the community at the first opportunity. Won’t you join us?