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Author Topic: Token as a License?  (Read 32 times)
denzo999
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December 03, 2017, 11:32:31 AM
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Hi all,

although I haven't been previously active on this forum, I wanted to share with you an article I published a couple of days ago on Hackernoon about tokens as a form of software licensing that floats across users and products, as I think the topic could interest this community too.

Software licensing is a complicated topic, but knowing a little bit about its background can help us better understand some ICOs, as the tokens being issued many times represent a form of "tokenized" software license, where the software itself is more often then not still in development. Therefore, ICOs are a way to distribute this license beforehand at a discounted price. At Medius (www.medius.si) we've first mentioned the use of tokens as a licensing model in late 2016, shortly after we started blockchain R&D, and then kind of forgot about it, but seeing the rise of ICOs throughout 2017, the topic is becoming more and more relevant imho.

What do you think? In my view it could potentially impact many software vendors, even where blockchain as a core technology is not needed.


Token as a License (TaaL)

Opposed to traditional software licensing, token based licensing gives you the ability to “reuse” the same licenses for different products and when the need arises. As tokens are sold or purchased on exchanges, the license can easily change hands, so more users can use the software for a limited time. In a token environment, a product may

  • require a predefined amount of tokens, or
  • consume a predefined amount of tokens.

The concept of Tokens as a License is already taking place. Ethereum for instance, consumes Ether to perform different actions on the provided software. Because the consumed tokens are being transferred to miners, and because they carry value, we percieve Ether as a currency rather than a license.

Token licensing could be considered as the most flexible method of licensing. Tokens available on exchanges can be regarded as a maintained “token pool” of cross user licenses enabling users access to the right product at the right time. The users are able to obtain a license as long as sufficient unused tokens are available on the market. When someone stops using a product, he can choose to re-sell the tokens and make them available for someone else to utilize or hold the tokens for later use.

The model may become very effective for software vendors who have a wide portfolio of applications where the usage patterns of individual apps are difficult to predict. This situation often occurs in technical markets, where the portfolio of software is used in a design flow, or to conduct a software experiment. Users may not be able to predict how much software to purchase at the beginning of the purchase cycle as the usage of apps may be dependent upon the challenges in a particular design.

From the perspective of the software vendor, it’s also an effective way to fortress a market position against point-tool competitors. The token as a license (TaaL) model makes it financially easy for the customer to utilize the entire portfolio of software, and not try to buy the best-of-breed for every part of a work flow.

You can find the whole article here: https://hackernoon.com/blockchain-token-as-a-license-taal-ba5d173e4ad6

What are your thoughts on this?
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