Ever since Bitcoin first appeared on the scene several years ago, fans of the cryptocurrency have been searching for a way to apply the idea that might capture the public imagination and broaden the use of the technology beyond just geeks and programmers.
Now, some believe that application has appeared with the rise of the "token" economy, in which companies or startup ventures fund their operations by handing out units of cryptocurrencies. Some companies have even done what are known as "initial coin offerings" or ICOs, in which they distribute tokens instead of shares to investors.
The cryptocurrency market is seen by some as a bubble with hugely inflated prices. Some observers say bitcoin and other similar ventures are similar to Linux, an open-source alternative to Microsoft's Windows operating system that has never really achieved mainstream success.
But entrepreneur and investor Balaji Srinivasan, a partner at Silicon Valley venture capital firm Andreessen Horowitz, believes that token-based systems "may eventually create and capture more value than the last generation of Internet companies."
In an essay published recently on the blogging platform Medium, Srinivasan and his partner Naval Ravikant, co-founder and CEO of a popular online VC community called AngelList, said they believe the token economy has the potential to become "a Kickstarter on steroids."
The two men, both of whom have been investing in bitcoin-related technology for several years, argue that using tokens as a financing option has the potential to improve the liquidity options that companies have by several orders of magnitude, as well as increasing the size of the available audience that might want to invest in such ventures.
All of this is possible because of an explosion in the cryptocurrency market over the past few years, they argue, in which Bitcoin has survived internal strife but also given birth to alternative currency systems and platforms such as Ethereum.
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