Tokens: the Future of Money in the Age of the Platform review: Timely reflections on value

Tokens are almost - but not quite - money, explains Rachel O’Dwyer in her timely panorama. Phone credit, gift vouchers, prepaid cards, gaming currency, non-fungible tokens (NFTs) and crypto-mint are all stand-ins for real money. Often highly liquid and perhaps exchanged with a coy wink, they can subvert state-imposed controls including, in particular, taxes.

Archaeologists and historians have uncovered grain tokens from 10,000 years ago in Mesopotamia, access and privilege tokens from 5,000BC Athens, and jetons royaux from medieval times. But with the age of the internet, what might be the future of money?

Platform capitalism enables a tech giant to plausibly deny it is an employer when it has workers, to deny it is a bank when it processes payments. The author explores Amazon’s control of some gig economy workers by remunerating them with its own gift cards, which can be used to extensively shop on its worldwide platform, of course for a fee. She muses whether the emerging online empires of the kings of the internet may threaten the stability of states.

The 2008 global financial crisis led many to lose their retirement savings and hard-earned wealth. Cryptocurrency was born with the backdrop of broken trust in the value of money, and a damaged faith in governments to protect societies. The author personally observed several intense debates about how best to fix the financial system, and how to build trust between inherently suspicious parties. Irrefutable electronic records, in the form of blockchains, and community rules enforced in software code, in the form of smart contracts, seemed to many visionaries to provide a solution free from human politics. She expresses some frustration that although there were numerous discussions of moulding societies with these new technologies, there was often little follow-through and successful execution.

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[ Banksy reveals that artwork shredding stunt did not go to plan ]

[ Woman who bought shredded Banksy artwork to go through with purchase ]

There is schadenfreude too: the Ethereum blockchain supports smart contracts so that humans should never subvert the value of digital assets built upon it. But inevitably, a hacker in June 2016 found a vulnerability in the Ethereum code enabling the extraction of the equivalent of some $50 million. Many noted that because under the community rules the software “code is law”, the code hack was thus acceptable. But others with a vested interest disagreed, and so Ethereum was rolled back to the day before the attack so as to “fork” a new version. Clearly thus code is not in fact the law and humans can intervene.

The link between something and its representation, and how cultures make value and meaning, leads to an interesting discussion on the role of art as tokens and a substitute for money. The artist Yves Klein sold invisible zones of the river Seine in Paris for gold and then proceeded to throw gold into the river, presenting the buyers with certificates, as tokens of the event. Banksy’s Girl with Balloon was partially destroyed by a shredder hidden in the painting’s ornate frame, seconds after the auction gavel dropped. While some saw the event as a rousing blow against the assetisation of art, the author argues in fact Banksy successfully boosted his cultural capital.

Digital technologies conflict with the value of art established by its scarcity and its restricted ownership. The NFT market bubble in 2021 apparently reinforced the rarity of art, and was endorsed by established auction houses such as Christie’s and Sotheby’s. However, in practice NFTs were simply tokens to items on the internet that could disappear, just like Klein’s gold in the Seine. The author reflects that, paradoxically, an image which is very widely digitally copied is also rare in the sense that few images are so. Digital value and art may be less about what very few people have, but more about what others already have, and so drive digital consumerism.

[ Code that formed basis of worldwide web for sale as non-fungible token ]

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The speed of technology development challenges any book analysing technology. The world changed earlier this year with the emergence of new AI systems. The author does not contemplate how these generative systems, and in particular computer-generated art, may impact digital value. Although there is some mention of how regulatory authorities are addressing digital currencies, the book could be strengthened by a discussion of the EU’s new Markets in Crypto-Assets (MiCA) regulations and Biden’s executive order on the responsible development of digital assets. O’Dwyer provides excellent summaries of some technology buzzwords and acronyms, but these are sometimes used prior to explanation on a sequential read from cover to cover. No doubt the final version of the book will include an index.

And so, with the age of the platform, what does the author think may be the future of money? Her concluding remarks are that the metaverse, and by extension how digital technologies may evade historical values and norms, does not seem a beautiful escape from a grim reality but perhaps instead “is like a real shithole”.