TokenBnk is the new leader in the evolution of a decentralized crypto-banking system that we are still getting a widespread handle on. As Bitcoin soars past $7,300 the token based world is starting to consider what the future of cryptocurrency looks like. TokenBnk is part of this showing how saving your crypto-dollars is good instead of looking for an instant alternative to spending or just having it in a virtual wallet.
Seeing how TokenBnk works, you have to forget everything that you know about real banking. Remember that despite the name, TokenBnk is nowhere near a bank. Instead, it is a non-custodial holding system for your cryptocurrency tokens, stored on the blockchain in a smart contract you deploy yourself. So if you have some Ethereum tokens, you’d move them to TokenBnk like you’d move your cash to a savings account. But what next? Is there a contract? Is there small-print?
There’s no catch. Once partially reading the white paper and just asked the question, the gist of TokenBnk is that you get rewarded for just keeping your cryptocurrency tokens on the blockchain. Say you have some Ethereum laying around, just increasing in value — why not earn some interest on it as well? That’s what TokenBnk does. When someone withdraws from TokenBnk (as can be predicted by the volatile nature of any financial market), they pay a fee of one TokenBnk coin (based in Ethereum). That coin gets distributed among all users based on the percentage of the Total Network Value (TNV) their savings contract constitutes. So in a year, you might gain a percentage point of the tokens you have, in whatever coin they are in. Or less, or more. Depending on all the variability of withdrawals versus your TNV. The point is, anything gained is better than nothing gained on currency that itself is constantly growing in value.
If you leave your BTC or ETH sitting in Coinbase or in some long-forgotten wallet it does nothing. It has a value, no growth, no interest. But that value is market derived and the coin itself sits at whatever number of coins you have. TokenBnk rewards the patient cryptocurrency holder, by adding on what amounts to the equivalent of interest on the actual coin, not the value of the coin. We rarely hold traditional currency without expecting some sort of rate of return, or return on investment — so why not expect some sort of yield from cryptocurrencies? This means that yes, Crypto Economics is now a thing.
“Blockchain applications can never be deleted or taken down like centralized websites or apps; they are what’s called immutable,” says TokenBnk founder and CEO Shayne Coplan. “Due to this immutability, it is necessary to take certain precautions when designing a decentralized system’s architecture in order to guarantee the dApp will always function as intended; this is where crypto economics comes in.
“Crypto Economics is all about creating dApps with inherent financial incentives that, in theory, ensure the dApp will forever function as intended. One achieves this by programmatically rewarding users for correct behavior, and sometimes even penalizing unintended behavior. In the case of TokenBnk, the correct behavior is to hold long, and that’s where the rewards come in.”
Millennials are having a hard time-saving money, but that doesn’t mean they have to treat the tokens they are collecting the same way as traditional currency. There is more opportunity to save since the perception of a digital asset is completely different from a physical one. Eventually, everything, all transactions, will be decentralized. Eventually, we’ll all be dealing with smart contracts and blockchain-based capitalism. If you are holding Bitcoin or Ethereum, you are already ahead of the curve. Saving it for a rainy day — when the rest of the world is scrambling to catch up — while it increases in quantity and value is the smart move.
Sure, you can be an aggressive trader and hope that ROI pays off, but there is probably some antiquated anecdote about patience and saving. “I was in the Ether presale back in 2014. Everyone I know that was involved at that time has regrets of ever trading the markets,” Coplan points out. “In hindsight, the buy and hold strategy massively outperformed even the most successful of traders. With the new wave of tokens arriving in the market over the next few years, hopefully, TokenBnk can help token holders avoid making that same mistake.”