The Value of Contribution
Capitalism has been the most successful system ever implemented, although in recent decades a form of extreme capitalism has made it increasingly unfair and extractive. There has always been a capitalist class who owned the means to production and the working class who sold their labour for money. Capitalism was the most effective system that was developed using the technologies available at the time. This worked well during the industrial revolution, but arguably is less effective as a method of value distribution during the information revolution with the technologies that are now available.
In a capitalist system, capitalists exchange capital or money (value now) for equity (future value) in a company that will then use that money to hire employees (contribution) to create a vehicle (product or service). They will then spend money (value now) on sales and marketing (contribution) to get clients and customers (consumption) which generates revenue and hopefully profit that results in future value (shareholder value). All future value flows to the capitalists, forcing all contributors to exchange their time and resources for value now and unable to share in the value they create.
The key point here is that capital has a correlative relationship with shareholder value, whereas contribution and consumption have a causal relationship with shareholder value. To create a more efficient and sustainable system with less speculation, value should flow to those with a causal impact on shareholder value. One might consider this a natural evolution of capitalism that leverages the technologies available today, including distributed networks, cryptocurrency and the proliferation of high speed internet and smartphone usage across the world.
The goal of a company is to make a profit and this is done by generating more revenue than all of the costs of the business. The more profit a business makes, the more valuable it is to investors who are willing to pay more to own a share in order to receive a share of the profit. The faster a company grows its revenue, the more valuable it is to investors who will speculate on the future value of the company as it grows in size. Therefore, the biggest indicators of the value of a company are its revenue, profit and growth rate on top of any other data points investors deem relevant. The best way to create value therefore is to grow revenue fast with as few costs as possible.
Tentop believes that by paying all contributors in tokens ‘future value’ rather than money ‘value now’, they will be committed to the future growth of the network. Tentop will be an autonomous organisation with few employees where all profit is shared by token holders of the economy. A token holder is analagous to a shareholder using cryptocurrency as a faster and cheaper method to distribute the assets. Tokens can only be earned by contributors to the network and consumers on the network as these are the only parties with a causal relationship with shareholder value. All future value flows to those that directly impact the value creation and there is an incentive to earn tokens during the earliest stages of value creation.
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