The unique value of tokens comes from an integrated web
Smart Tokens will drive the next web.
This is based on Weiwu’s talk at EDCON 2023.
Hello everyone, my name is Weiwu, and I serve as the CTO at Smart Token Labs. Today, I want to shed light on the unprecedented potential of tokens when incorporated into an integrated web, a web that’s largely driven by these smart tokens.
## The Web thrives on integration
In our current digital landscape, integration is the cornerstone of the web. A majority of websites today use several types of integrations. There are three primary types of integrations — authentication through platforms like Google ID or Facebook, payment integrations through services such as Google Pay and PayPal, and social media integration through platforms like Twitter. These are largely controlled by major internet giants like Google, Facebook, and Apple. The monopolistic position of these companies is primarily due to the initial design of the web, which lacked certain crucial layers such as authentication, payment, and user-to-user information sharing.
## The potential of the web is far from being fully realised
However, the current state of integration faces substantial challenges, limiting the possibilities of what the web can offer. A clear example is reputation, which, at present, isn’t universally acknowledged across different websites. Let’s consider a user who is well-regarded on one website but decides to create a new account on an e-commerce site. This user has to start from scratch, building a reputation again, despite potentially being able to export reputation data from the previous site. However, the user cannot import this data to the new site, as it’s not integrated. This is a glaring flaw in the current web model.
We encounter similar issues in a variety of situations. For instance, music fans struggle to prove their loyalty when trying to acquire concert tickets because their credentials aren’t universally recognized across platforms. In the Internet of Things era, a smart car owner can’t make their vehicle available to a website because it’s not integrated with the system. In essence, we can say that the lack of integration severely restricts the scope of the internet.
Take an airplane ticket, for instance. If this ticket is viewed as a token, it only has value within its issuing platform, such as an airline or online travel agent, but fails to offer utility elsewhere. This isn’t merely an inconvenience; it’s a failure to fully realize the potential of integration.
Imagine if your airline ticket was integrated with various systems. When it’s integrated with social media, your friends and family receive real-time updates about your travel status. If integrated with Google Maps, you’d be guided directly to your gate, complete with estimated travel time. If your ticket was linked with hotel reservation or car booking systems, delays or changes in your flight schedule would be automatically communicated, saving you from frantic, last-minute calls.
The potential goes further. Integrated with banking apps, your bank could adjust your account’s security settings to align with your travel status and even offer to exchange some local currency. Integrated with streaming services, YouTube could preload interesting videos about your destination for offline viewing during the flight, while Spotify curates a soothing playlist for your waiting time at the airport lounge.
These examples only scratch the surface of potential integrations. Yet, the sad truth is, our progress has been scant since the inception of login, checkout, and social media integration about two decades ago.
## Integration is stunted
The challenges posed by integration are manifold, each one imposing significant burdens on our evolving web infrastructure. Firstly, the process of integration is permission-based. This is primarily because most integrations are facilitated in a back-office manner, a scenario where distinct websites and systems converse behind the scenes, out of the user’s sight. This inherently brings about a setup where permissions are exchanged and agreed upon. Take, for instance, an airline website integrating with a visa system. Both parties need to strike a deal, aligning their terms and conditions, and then form a shared framework that facilitates the mutual flow of data.
The privacy implications of such an integration setup are also significant. Users often remain oblivious to the details of the data shared between these integrated entities. For example, an individual applying for a visa through an airline’s integrated system has no real insight into what personal information is exchanged between the airline and the visa office. Even after the visa application has been submitted, that data pipeline can remain active, allowing for continuous data exchange unbeknownst to the user.
The cost factor is another significant challenge in the integration process. Each new integration point creates a connection with a distinct server, each requiring its unique set of keys. These keys, over time, can become unavailable, outdated, or may need to be updated frequently, causing administrative and security challenges. Furthermore, each integration means that the business logic — the rules that govern the operation of these integrated systems — becomes more intricate, as these systems have to account for the ‘moving parts’ of each new integration. In effect, the complexity of integration scales quadratically with each added integration, leading to a web of connections that are expensive and difficult to maintain and navigate.
Finally, the question of trust looms large in the landscape of integration. Trust in this context involves more than just integrating with known tech giants like Google or Apple. You may need to integrate with lesser-known airlines or even with companies outside of the tech industry, like Starbucks. Here, the issue becomes whether these entities can be trusted. Will they simply provide another attack surface for cyber threats, or could users potentially exploit this integration to their advantage at the expense of your business?
In the face of these formidable challenges, websites today have often adopted a practical, if somewhat constrained, approach to integration, sticking primarily with a limited number of trusted social media logins and checkout options. The full potential of integration remains untapped, trapped behind these barriers of complexity, privacy, cost, and trust.
## Tokenisation allows limitless integration
These shortcomings highlight the critical need for a greater level of integration. which can be achieved by tokenizing the functionalities of websites and the digital rights of users. When I talk about tokens, I don’t refer to the typical ERC-20 tokens that we buy and sell. Instead, I’m referring to smart tokens that can act as integration points.
These smart tokens serve as integration points, streamlining and facilitating interactions between systems.
Consider the implications: email accounts could be tokens; a social media post or even a simple “like” could be tokens, serving as proofs of popularity or reputation. Diplomas and credentials could be tokens, enabling verification of qualifications across platforms. Credit scores could be tokens, simplifying applications for financial services on any website. The key to your smart car could be a token, allowing you to rent your vehicle through a website easily. Carbon offset could be tokenized, enabling users to earn credits from their solar panels and apply them to airline bookings. Hotel bookings could be tokens, facilitating their purchase, sale, and integration with airline tickets. Gym memberships could also be tokens, enabling seamless transfers and validations across fitness platforms.
With everything tokenized, a limitless scope for integration emerges, paving the way for a future web powered by smart tokens, achieving a level of interoperability and efficiency that was previously thought impossible.
## We need a smart layer for it
Indeed, such a smart token system necessitates an integration layer, which we’ll refer to as the “Smart Layer”. Blockchain technology, while a critical foundation, isn’t sufficient by itself to create a tokenized web with unlimited integration potential. This is where the smart layer comes into play.
This becomes imperative because, while blockchain provides a crucial foundation for enabling trustless token logic through smart contracts, it falls short of facilitating a tokenized web with boundless integration possibilities on its own. Essentially, blockchain is not a service layer. It’s designed to leverage consensus to guarantee the correctness and security of transactions but lacks the capacity to simultaneously service tens of thousands of websites in a decentralized manner.
This is where the Smart Layer comes in, bridging the gap between blockchain technology and providing integration points for the tokenized web. It’s this layer that permits token code to be executed within Web 2.0 and Web 3.0 environments and oversees the accounting, issuance, revocation, or expiration of tokens.
However, the Smart Layer has to provide several guarantees that are not typically catered to by traditional blockchains like Ethereum. It needs to cope with immense traffic since every user post could potentially create a traceable token, while simultaneously ensuring that most of this data is not recorded on the blockchain. It must prioritize user privacy, with only the proofs of these tokens stored on the blockchain.
Additionally, the Smart Layer needs to swiftly respond to calls from web services relying on it, behaving in a trusted manner. This means a website connecting to a node in the Smart Layer should expect a reasonably prompt and correct response that can be verified on the blockchain. Furthermore, it must open new APIs for web services, the moment tokens are defined, created, or updated.
One might draw a parallel between the Smart Layer and Google’s API service. However, a crucial difference exists: the volume and diversity of API calls to the Smart Layer are designed and expected to explode as more and more people define new tokens and uncover novel use cases for them. For instance, if Google decides to support Smart Car keys, they might integrate this functionality into Google Wallet and announce an update. If a new concept like a smart fridge arises, Google would need another update to support this new token type.
This kind of iterative upgrading is not feasible for the Smart Layer. Given its nature, anyone can define a new token with new API endpoints, and the Smart Layer needs to cater to these new API calls without having to upgrade the entire network. Tokens should be freely added and removed from the system dynamically. Any upgrades to the Smart Layer should target scalability or security enhancements, not the addition of specific tokens. In this network, tokens and their APIs are the first-class citizens. But that’s not where the story ends.
## AI needs smart tokens
The Smart Layer doesn’t just facilitate an integrated web and address the complex challenges we currently face, but it also serves as a crucial link between AI and the web. AI is poised to fundamentally transform the workings of the web. There’s a real possibility that AI will become the user agent, accessing websites on behalf of users or even dynamically creating websites and mobile applications based on specific user needs.
Take, for instance, the role of a travel agent. Suppose you want to change your destination mid-travel, the AI agent would need to find a new hotel, new routes, and new attractions. Today, it can’t accomplish this because it can’t log into booking.com, purchase a train ticket, or share your itinerary on social media.
If we applied the traditional back-office API integration approach to solve this, every external website would need to provide an API key, which you would then copy and paste into the AI’s configuration, granting it access to these websites on your behalf. But this setup has limitations. It lacks flexibility since you need to connect your AI to a new website every time you access one. Moreover, these connections tend to be permanent, opening up the possibility of the AI going awry and making unwanted reservations or purchases. If the AI operates at the server backend, it essentially hands over control to major tech companies like Google, Facebook, or Apple, allowing them to control user API keys and access web services on behalf of users.
Contrast this with a tokenized web scenario. Here, the AI could prepare a plan showing the actions it intends to take, such as making a reservation using the user’s private key, booking tickets, selling some tickets, buying new ones, and preparing a social media post. Users could then review this plan, evaluate the prices and actions, and approve the action plan, thereby permitting the use of their private keys.
At this point, the user would sign all the transactions needed for the AI to proceed, and the AI would then acquire tokens for each action item and access the associated rights. Since the user hasn’t entrusted the AI with a broad connection to act on their behalf but instead has authorized specific transactions, there’s no worry about the AI going rogue. The AI doesn’t have control over the user’s access key, and there’s no need to plead with the AI, as all tokens purchased and actions taken remain with the user and within the smart contract wallet. This presents a more dynamic, secure, and less centralized method for AI to interact with the future web.
## Conclusion
In conclusion, the Smart Layer emerges as a pivotal solution in our quest to harness the web’s true potential. Today, we face a multifaceted challenge: integration is permissioned and costly, privacy is at stake, and maintaining trust is like walking a tightrope. While blockchain technology provides a foundational layer of trust and security, it doesn’t offer the necessary service layer for mass web integration. This is where the Smart Layer steps in, providing the tools and means to create a tokenized web, the key to limitless integration.
This Smart Layer acts as a bridge between Web 2.0 and Web 3.0 environments, executing token code and managing tokens with agility and efficiency. It affords high traffic loads, ensures privacy, and provides real-time APIs to accommodate the ever-evolving landscape of tokens and their applications.
Most importantly, the Smart Layer becomes the connective tissue between AI and the web, fostering a more dynamic, secure, and less centralized method for AI to access and interact with the web. In a future where everything is tokenized, the Smart Layer is the enabler of an integrated, user-empowered internet, where users maintain control over their data and AI serves as an efficient and trustworthy assistant.
By establishing a framework that makes integration seamless, promotes privacy, and empowers users, the Smart Layer paves the way to a future where the web’s full potential can be realized, ultimately catalyzing a significant leap forward in how we interact with the digital world.
