Speaking with Universa community, we see the same misunderstandings (and sometimes even myths) very often. Let’s cover them in more details, and also understand Universa a little bit better.
Myth 2. Isn’t an “utility token” (or just a “token”) just another fancy word for “cryptocurrency”?
In the previous article, I’ve already explained why UTN is “a token, not a coin”, but let’s expand it a bit and discuss how much “a token” is different from “a currency/coin”.
Well, UTN is at least a token, no doubts. But what does the word “token” mean? Why is it so different from “cryptocurrency”? And what it shares with them, instead? And how much is it different from U smart contracts?
To discuss all of the above, we need to talk about the “origin of tokens”, and at some point even dive deeper and speak about the typical properties of money (and money-like systems). It will be a long talk, but hopefully useful for everyone, not just for blockchain geeks.
What is a token, after all?
If we think about the Bitcoin and similar “money-value-transferring” networks as the “first generation of blockchains”, then the whole “token” term has appeared around the second generation. When the blockchains have started to think wider than just “send a balance change from an account to an account and recalculate both balances”, and began to provide the means of creating dApps and custom “coins/currencies”. The “tokens” became a name for such custom-created “value units”.
Some blockchains involved a platform to create a multitude of various “coins” or “currencies”, like, “a separate coin for every purpose” (remember a moment of time when the “colored coins” were on top of the hype?)
Some were even a bit more advanced, and didn’t let you create new coins directly; but you could make something like a dApp, and, using that dApp, you could create… what? Right, a new coin. Turning a currency-transfer focused blockchain into a general-purpose programming blockchain-based runtime, where most of the “programs” the users actually write are, coincidentally, “currencies to be transferred”.
And this is about the point, where the borderline goes – between “what are yet cryptocurrencies” and “what are already tokens”. A cryptocurrency or a coin is likely some first-class concept in the blockchain (like even ETH in Ethereum is), a method to transfer the value directly embedded in the protocol; a token is more likely a “customly created high-level coin-like feature on top of lower level blockchain functionality”, like, “a currency-emulating interface of dApps”.
That’s one of possible definitions of a token, but is it the only? Of course not, there is at least one more aspect to consider. As I explained in the previous article, a serious factor to keep in mind when thinking whether something is “a cryptocurrency” or “a token“, is actually how it is being marketed. If an asset strives to be “a new generation of currency”, to be accepted in stores, web-shops and kiosks instead of Euros and Bitcoins, that’s likely “a cryptocurrency”. If something is a niche payment method for specific services, it’s more likely “a token”, like, “a token in a casino” or “a token for the arcade machines”.
Remember that good old “New money order” commercial for Universa? But have you noticed that even those days, in 2017, we were already speaking the “New money order” not about UTN itself, but about the Universa blockchain in general? In Bitcoin world, the “revolutionary new currency” was the Bitcoin (BTC) currency itself; but in Universa, the “New money order” is the whole paradigm of smart money and smart documents that can be built on top of the Universa blockchain architecture.
It’s not UTN which has been called “new money” – but the “new money of 21st century” were to be built on top of it, representing the specific requirements of those who build them (from “smart lunch money” which can be used by students for lunch only, and up to welfare social benefits). It was a fuzzy target of the future those days; but nowadays, lots of things were added to make this future possible, from typical contracts and currency-processing templates (like the escrow procedure), up to… these days, we even have “CBDC-in-a-box” product, UDC, ready to be deployed on government-scale for these purposes, and utilize all the strength of Universa contracts.
And UTN… as I told in the previous article, UTN was – and still is – merely a payment unit for Universa network usage. Just a fuel for the new money order to function. Because who needs “UTN” as some currency surrogate, when you could probably have a real currency of your country, digitized for smart contract usage.
So well, if something is a top-level recordable entity in a blockchain, and it is promoted to “replace the real money” (as the globally accepted payment method), it could be roughly considered “a coin” or “a cryptocurrency”. If something is built on top of lower level “blocks”, and is promoted as a “niche-specific” payment tool (like, you build a global system for custom web site domains, and make a specific unit to pay for those domains; or you build a huge distributed data storage and make an asset which you receive when you provide some storage, and which you pay when you want to utilize some storage) – that’s most likely “a token”. Assuming this token, in general, behaves in a money-like manner at all.
But what does it mean, “to behave in money-like manner”? We’ve used some money or coins since childhood; and we heard those stories about early historical money forms during the history classes (remember those seashells and furs used as commodity currencies?) But what is it actually that makes money convenient (and makes something behave “like money”)?
Well, let’s learn some…
Typical money properties
Actually some of the properties below are not specific to money only. You’ll quickly notice that there are many objects in our life which satisfy some of these properties. The typical money though – besides their primary purpose, to be globally accepted as the payment means – should satisfy most of them, to be treated like money.
Cents for dollar and euro. Pennies for pound. Kopecks for rouble. Satoshis for BTC, wei for ETH. Any unit should be divisible rather far, so you can use it not just for macro-payments which are worth a lot, but for micropayments too. That’s the reason why Bitcoin is divisible to 10⁻⁸, and why every ERC20 has those vague “decimals” parameter.
And it’s exactly why the SplitJoinPermission in Universa smart contracts (the permission which typically lets you create the “money-like” contracts in Universa) has that min_unit field (for example, see line 47 in the YAML representation of UTN smart contract).
If you can divide something into small units, you can “pay” for small transactions.
Who of us, being a kid, never played with the tree leaves, turning them into a currency and requiring other kids to pay with them in your “store”? You probably noticed already how impractical the leaves are as a currency. Start using them – and they tear, break away, decay easily. Cannot remember any civilization which used the actual tree leaves for a currency – it’s hard to pay with something which disintegrates even faster than an iPhone charging cable. How much better and more solid even the furs are, not to mention the seashells!
Though the reduced durability of tree leaves was probably not the only reason why the civilizations barely ever used them as a currency. It was…
Interestingly, the supply of the resource which you use as money should be limited, for this resource to be used as a “value measurement”. That’s why the gold works – it is hard to obtain and hard to process, and the obtained quantity is rather limited. The furs work too – even a good number of hunters cannot physically catch enough animals to get too many furs to be used in the local economics.
That’s also the reason why Bitcoin – besides just pure marketing “as a new age currency” – also has a limited total supply. When the total supply is definitely limited, the property of scarcity is satisfied.
This is the property where the historical payment methods, those furs and seashells, started to lack. To carry a good amount of furs, you need not just some wallet or bag, but likely a horse cart. You cannot carry around too many seashells, either – the more rich you become, the more physical space your wealth takes. And you cannot just store them in your shed – the money is to be moved and used for payments, not just for keeping.
This is, by the way, exactly the reason why the commodities (oil, gas, sugar, orange juice), which often behave “like money” in any other aspects, are not typically used as the currency. Carrying several hundred quids with you is typically okay, just buy a good leather wallet at King’s Road. Carrying several barrels of oil looks ridiculous.
A good property of Bitcoin is you can carry around as many Bitcoin as you want, having just a single “hardware wallet” or even a cold metal plate (with those key mnemonics engraved). As long as you have access to the Internet (and some computer or a smartphone able to run the Bitcoin client), you have access to all your wealth.
Well, most of the populated world, of course, already has some form of Internet coverage, and you can usually find some power socket to plug your device. Far from 100% of the world. But the missing Internet access is probably not the only reason why Bitcoin still hasn’t reached all the offline trading points. More likely, it’s…
Yes, the money actually needs to be recognized by people.
Not (just) recognized as something that has value (“yes, I agree Bitcoin is a proper paying tool rather than just some geeky invention, I am ready to accept them”).
But also recognized just… as something specific. “This is a bank note of real 100 United States Dollars”. “This is a Euro coin”. “This weird transaction registered somewhere on the Internet on some servers claiming themselves nodes is actually a payment of 1.5 Bitcoin”.
This is where all of the modern blockchain based cryptocurrencies and tokens lack a lot, compared to “paper/metal money”. Almost any unskilled peasant can recognize money bills which are used in their country. But try to teach your grandma how to pay and receive Bitcoins!
Interestingly, the cognizability doesn’t end at just the “technical knowledge to deal with cryptocurrencies/tokens”. You also need to be able to distinguish between various coins/tokens, and to check if they are “legit”. But this is not in anyway specific to blockchain world – the “real world money” have the same problems:
In blockchains where multiple “coins/tokens” may be made, like Ethereum or Universa, you need to know some identity of the token, to be sure you are dealing with a proper one. It is usually not enough to know just the “token name” – you need to know some official method to identify this unit. Everyone usually can easily create a new token or currency in those systems; and typically no one would stop them to call this new currency with the name of any existing ones. Making a new token and calling it “Universa” or “UTN token” (or maybe “UTNP” if they do it in Ethereum blockchain)? someone may try to do it and to imitate our tokens with their fake ones. Some even did.
In Ethereum, such an identity is usually the dApp address. A unique address for any “token/currency” (e.g., for UTNP it is 0x9e3319636e2126e3c0bc9e3134AEC5e1508A46c7, as mentioned in our KB), and it’s enough to distinguish it from anything similarly named or similarly looking.
In Universa Blockchain it is a bit different to identify a token or a currency. As you may know already from our previous articles, a token in Universa is usually just any smart contract (document) which has the “split-join” permission defined. And it is the configuration of this property which defines what is the “identity method” of the token. Again, as mentioned in our KB in the same article about UTN and UTNP, the rule of identifying the real UTN and distinguishing it from different tokens is that “the Origin ID of a smart contract is NPo4dIkNdgYfGiNrdExoX003+lFT/d45OA6GifmcRoTzxSRSm5c5jDHBSTaAS+QleuN7ttX1rTvSQbHIIqkcK/zWjx/fCpP9ziwsgXbyyCtUhLqP9G4YZ+zEY/yL/GVE”.
But in the real world this problem can appear as well. Did you just think that a “wrong similarly-named token” problem is just a blockchain-specific problem, due to the ease of making a new token? – but do you know that there are more than 20 currencies in the world which are called “dollar”? and you really need to identify the proper ones, so nobody gives you “Singapore dollars” instead of “Hong Kong dollars”. Or if you are travelling in Russia or Belarus, you actually need to learn to distinguish Russian roubles from Belarus ones, because one of them is about 30 times cheaper than the other.
“Recognizable identity” solves the question of “how to distinguish a money/money-like asset from similar ones”. “Recognizable legitimacy” is close but different; the question is “how to distinguish a money-like asset from a fake one imitating it”.
In the offline world, it is oddly complex. Well, you can learn to “distinguish US dollars from Hong Kong ones” rather quickly. But distinguishing legit US dollars from counterfeit ones? Especially in the world where the typographic production technologies become end-user accessible? That’s actually a problem.
Interestingly, this is where the blockchain/digital technologies shine. To distinguish “the legit UTN” from “something named similarly”, and to distinguish “the legit UTN” from “the fake one”, you use quite the same identification rules. Like, “the dApp is created in the main Ethereum network and the dApp address is 0x9e3319636e2126e3c0bc9e3134AEC5e1508A46c7”, or “the contract is created in Universa Mainnetwork, and its Origin ID is NPo4dIkNdgYfGiNrdExoX003+lFT/d45OA6GifmcRoTzxSRSm5c5jDHBSTaAS+QleuN7ttX1rTvSQbHIIqkcK/zWjx/fCpP9ziwsgXbyyCtUhLqP9G4YZ+zEY/yL/GVE”. No need to read the multi-page booklets covering “red and blue threads”, “ultraviolet glow” and “embossed printing”.
But all of the properties above are not as interesting when you consider if something “behaves quite money-like”, as the next property:
It is probably the most interesting – and at the same time, the least talked about – money property. You always used it, you implied it – and it is quite likely, you never thought of it. You intuitively considered it, playing with the “tree leaves money”; and when you played with the “Monopoly money”, you already used it fully. You could have guessed this property even before actually learning the other ones (like, learning how to spot counterfeit money).
This property says: any individual units are interchangeable, and each of the unit parts is interchangeable with another similar part.
Basically, it means: as long as this is some valid payment method – and all of its units are valid payment methods (cause you usually cannot just tear a bill in half and pay with them as half-the-price-of-the-bills) – you usually don’t care about the specific instances of this payment method, you care only about its value.
A 5 Euro bill is worth 5 euros, no matter if it is old or new, printed in Germany or Italy, has some (minor) marks on it or hasn’t. And it can always be exchanged to some euro coins, total of 5 euro value – no matter if that’s 5 1-euro coins, two 2-euro and one 1-euro coins, or a really big handful of 10 euro-cent coins.
Of course, this property is even applicable to most of the commodities – any 1 barrel of oil can be supplied instead of any other 1 barrel of oil (assuming both barrels contain the oil with some specific standardized chemical properties).
This is why gold stamped coins can be used as a payment tool (if they are stamped properly – they have the same amount of gold and worth the same, no matter of particular coin) while post stamps typically cannot (by their nature, the stamps are different, and some of them have larger inner value and some smaller). This is why – contrary to any other properties – you were using the leaves as the “game money” (cause all the birch leaves are essentially equal and interchangeable and mostly indistinguishable) – and why the furs have eventually been phased out from their payment role (some furs are of better quality, some of worse; some are larger, some are smaller). Why gems and beads may be expensive, may be a good investment tool, but are rather bad as money – each particular diamond may be larger or smaller, better or worse cut, with nicer or more boring color, so you cannot use them just as “ah, pay me 15 diamonds for this longsword”.
And this is why, in the modern blockchain-based systems, you typically don’t have any traceable “bills” or “virtual banknotes”, but just the total amounts of lumps of “money”/“tokens” being transferred. Though, in real banks it’s quite the same: the banks don’t track what exact bills are in their possessions – it’s enough for them to know the total value.
Once again, the fungibility is not a unique property of money. Two 5-euro bills are interchangeable, and each worth the same as 5 1-euro coins – but each kg of sugar (assuming that’s some “standard white sugar” rather than fancy demerara one) is usually interchangeable with another kg of sugar, and worths the same as 5 200-g packs of sugar. Not only money is fungible. But, since the times of “commodity money” (furs, shells and like that), it is highly unlikely to have any kind of money which is not fungible. Being fungible is a necessary but not a sufficient condition for any modern money.
Fungibility In Ethereum dApps
In Ethereum dApps, the fungibility is inborn in typical most-used ERC20 contracts. If you look at the ERC20 specification, there is no way to indicate any specific “bill” or “note”: the only thing that matters is value. The transfer method has an “amount” as an argument rather than some method “to specify owned banknotes used to get this value”. There are no methods to identify these “banknotes” or parts of the transactions, and the only method to know the “wealth” of some address is to call the balanceOf method, which returns nothing more than just the numeric value of this balance.
Making a non-fungible entity (like those postal marks – or, maybe, some free-form structured document) is a bit less trivial in Ethereum. The ERC721 standard exists for this purpose; though, as the Ethereum dApps are the applications rather than documents, this standard is not so much generic to handle “anything non-fungible”; but it is good enough for some typical valuable/tradeable usages like postal stamps… or CryptoKitties.
Fungibility In Universa smart contracts
It is rather easy to create a “non-fungible something” in Universa. You just create any smart contract. There are some typical fields in any smart contracts which make them behave like “non-fungible tokens” – each state.owner field contains the current owner, definition.data section can contain the “frozen” data of this contract, and state.data section may contain some data variable in the transactions. If you read the “Inside a Universa Smart Contract” article, you know all of this already.
Fungible tokens are more interesting though. How to make a smart contract fungible? This is so important that we actually have a separate article in KB on it: “Contracts fungibility: making tokens and currencies”. But in short – that’s the eponymous SplitJoinPermission that makes a smart contract fungible. Essentially, it contains
- the rule who can “split” or “join” some bags of the token values (typically, it is the current owner; but the logic may vary in special cases);
- how the value is stored (well, it’s only the value that matters, so we must specify some field in the contract to keep this numeric amount of “value”);
- how the smart contract can be split (remember the “divisibility” property of money? for example, we can specify that “the smallest amount of value is 0.0001”);
- and most importantly, how the tokens can be joined (remember the “cognizability/identity” properties?)
For example, a contract may contain a condition like “this contract can be joined with another one, and their amounts summed, if both contracts share the same origin id field” – and if that origin id field is “NPo4dIkNdgYfGiNrdExoX003+lFT/d45OA6GifmcRoTzxSRSm5c5jDHBSTaAS+QleuN7ttX1rTvSQbHIIqkcK/zWjx/fCpP9ziwsgXbyyCtUhLqP9G4YZ+zEY/yL/GVE”, well, you quoted the UTN smart contract definition almost verbatim. But in general, “making the contracts joinable if they share the same origin id” is the most straightforward way to make a non-mintable token (one with fixed total supply).
Or a contract may contain a condition like “this contract can be joined with another one, if their issuer field has the same address/public key, and some field in its definitions, like definition.data.name, has the same value”. If you think a bit on it, you’ll realize that this is the simplest way to make dynamically-mintable tokens. If some new token is created and has the same “name” as the original token – well, it may be the same token or may be some different “counterfeit” one (issued by a scammer); but if both tokens have the same name and are issued by the same signer – well, the same author made it so it is not counterfeit, it’s just a new issue.
Tokens and money, examples
Now we know enough to discuss some examples of tokens or currencies, and see how these properties are applicable to it.
In each case, let’s start with the primary identifying property of “money” (it is targeted to be a general purpose payment for various goods and services). We’ll be discussing the blockchain-based concepts, so let’s also point out if the discussed entity is some “top-level architectural concept to store/transfer the value” or “made of blocks”. And besides that, let’s examine how the “typical properties of money” are applicable to them.
First and foremost, it has always been discussed as “a new form of money” – that’s why it has been called “cryptocurrency” from the first days.
Is BTC a “first class citizen to transfer the value”? Definitely; the whole Bitcoin architecture is focused on storing the value and transferring the value, it does almost nothing else. You know a balance of some address, you transfer a part of this balance.
But besides that,
- divisibility – yes, to 10⁻⁸ (satoshi);
- durability – as long as the Internet, computers and Bitcoin nodes exist;
- scarcity – algorithmically limited to 21M BTC;
- portability – so-so; you need some method to store the key, some computer/smartphone and Internet access;
- cognizability – for those techie enough to know technical details;
- fungibility – check.
Seems like “a true (crypto)currency”. That was easy.
Interestingly, it hasn’t been promoted so much as a “new form of money”, like Bitcoin was. But when the wave of crypto-currency-coin-whatevers appeared after the Bitcoin, many methods to receive the payments in these “altcoins” appeared too, allowing to receive the payments in Bitcoin, Ethereum, Monero, EOS, whatever. Maybe, it hasn’t been marketed as a currency; defacto it became one.
Is it “a first class citizen in architecture”? Interestingly, yes; as I mentioned in the previous mythbusting article, some Ethereum transactions may contain the “value transfer” (of ETH), and some – contain the creations or executions of dApps. Enough “first class” to call it a “cryptocurrency” already.
The other properties?
- divisibility – yes, to 10⁻¹⁸ (wei);
- durability – typically for other blockchains – as long as the Internet, computers and the nodes exist;
- scarcity – interestingly, it is not as scarce as Bitcoin; there is no limit of total supply for ETH, and the amount of ETHs can grow infinitely;
- portability, cognizability, fungibility – similar to other blockchains.
Well, if BTC was “obviously a cryptocurrency”, it is already harder to say the same for ETH. It is defacto used as one; but it has initially been created as a “payment for gas” method and its total supply is unlimited (what is somewhat untypical for money).
But let’s speak about some topics closer to Universa…
Now I hope you realize why we say so often that “UTN is not a coin/currency”. Because we don’t want to misguide the people.
As I already mentioned in these mythbusting articles, UTN is not positioned as “the general purpose money”, and never was (but you can – and you should – make the “new money order” on top of Universa). It is so much not-intended-for-general-purpose-payments, that even now, after 3 years of development, it is hard to remember any point-of-sale in the whole Internet accepting it as a payment method (besides, of course, accepting it to pay for Universa transactions).
On the contrary, if/when some country-level currency is made on top of Universa and becomes “an official CBDC”, such a CBDC will be “a currency” just by the definition.
UTN is not “top-level” in the blockchain structure either – you can find the references specifically to UTN in the client code and in the “reserving the U” contexts; but the nodes and the blockchain network process the transactions with UTNs in quite the same way as the transactions with any other split-join smart contracts. It’s like if ETH was an ERC20 token itself and could not be transferred directly, without ERC20 method calls.
What about the “money properties” though?
- divisibility – yes, have a look at the YAML-form source of UTN contract and note the line min_unit: ‘0.000000000000000001’.
- durability and portability – a bit more unusual compared to BTC and ETH; you don’t just have to keep your private key to access/control the UTNs, but you also need to keep your contracts somewhere, in files, or in Crypto Cloud. Isn’t it too inconvenient for the cases when some CBDC is launched on top of Universa? – but the whole point of UDC product is to solve this inconvenience and make the “Universa based CBDCs” more portable. The regular UTN though, behaves more like… not a “money bill”, not even a “(smart) document”, but “a proof stamp on the document”, and needs you to keep and carry the document separately, somehow.
- scarcity – yes, total supply is limited to 4.9B, that was the condition of the token sale.
- cognizability, fungibility – similar to other blockchains.
Those are enough amount of reasons to think of UTN as a token (and not just “some token”, but “an utility token”, because being intended for the sole purpose of paying for Universa network usage, whatever and however it happens). Never planned for “general purpose usage”; created purely from the architecture “building blocks” and having no special handling by the network or the nodes; being mostly representing a “document” (or even “a proof stamp on the document”) rather than “a transferrable value”, and even having no means to “transfer the value” in the network – just to “register a contract”.
But is that all for Universa?
No. Some people look at UTN usage in the Mainnetwork, and then notice another smart contract that is being used by the Mainnetwork: U. And start asking: “isn’t that a utility token too”? (Sometimes, even “isn’t that the actual utility token instead of UTN”?) And the answer is most astonishing…
U is not even a token at all.
U smart contracts are the network usage.
If you read the Universa whitepaper, you noticed the explanations that UTN is used to pay for any network usage; and you may remember from marketing that the transaction price is targeted to be as low as 1 (euro)cent in some basic cases. And when you start searching the whitepaper for the explanation of U you’ll find… nothing.
Because U is not something as important as UTN; it’s just a way to implement those requirements, “every network transaction is paid in UTN” and at the same time “the transactions may be as cheap as 1 eurocent”. When reserving the Us for UTN, you just get the amount of Us proportional to the current UTN price.
Note the “a way”, not “the way”:
- The other networks, like private networks, still have the same requirement of “payment in UTN for transactions”. I already mentioned it once, and you should expect a more detailed article on it rather soon. These methods are not necessarily implemented using U; but they will require the usage of UTN.
- This “U is the usage” approach applies to other features too; Ubots – even though their network is different, they are is still made “in Universa ecosystem”, so the usage calculation is done in Us as well. Which are reserved for UTNs only.
- Parsec/UDNS. You may have thought of these systems to replace the centralized DNS and SSL architecture with their decentralized – and combined/united – one, and may have thought how is it related to Universa at all; but, besides it being needed for security and stability purposes, Parsec/UDNS are also made on top of Universa, use Universa smart contracts as a control method,… and yes, that involves UTNs.
You should think of Us as “a measurement unit” for network usage. Something like “joule” is for real-world physical energy, abbreviated as “J”. It is like J, but U. An energy measurement U-nit, you get the pun. Very useful, because (unlike the gas in Ethereum) the transaction cost does not depend on the exchange rates or the network load, your transaction will need the same amount of Us no matter what (again, reminding the definition of an energy unit).
But why U is not even a token?
… is not a token
In Universa, the smart contracts are the sole first-class citizens. Everything is a smart contract. But not everything is even a token, as we discussed above.
Let’s remember the “typical money properties”, and the puzzle pieces will finally fit together.
- Divisibility – if you look at the example YAML source of some U smart contract, you won’t even find the typical min_unit field. But if you examine the smart contract logic in more details, you’ll notice that the fields transaction_units (full path state.data.transaction_units) and test_transaction_units (full path state.data.test_transaction_units) may have some initial value, it can be changed downwards to 0, and only in increments of “–1”. So the minimal unit of “amount” is 1. Considering you reserve something like “400 Us” (and, like, “400 000 testUs”), this number is divisible just to single items. Not so much useful to anything besides paying for network usage in rather noticeable increments.
- Durability – generally, the smart contract doesn’t differ much from UTN and other Universa-based smart contracts. But inside it has a “time limit” requiring its user to utilize the smart contract within 365 days. Note the state.expires_at field: whenever new U smart contracts are reserved for UTNs, this time is set and starts ticking; in 365 days this contract automatically becomes “revoked/undefined” – and you probably need to reserve some more Us (and spend some more UTNs).
- Scarcity – contrary to UTNs, U supply is not limited anywhere. They appear when reserved, they “burn out” when used. They disappear when their “expires_at” timer goes off.
- Portability – even more interesting. The portability of an asset implies that you can easily carry it… why? actually, to give it out to somebody. You have the furs to give them away to some other trader for, e.g, a cow. You have the seashells and give them away to a trader for some fresh fish. With Us… look again at its YAML source and note: there is no ChangeOwnerPermission anywhere. In UTN, the ChangeOwnerPermission was specifying that the current owner can give some UTNs to another user; for U contract, you cannot change the owner of U contract after you have received it. It stays “truly yours” forever. Well, for 365 days. Very non-portable because very non-giveable.
- Cognizability – well, just a Universa smart contract. Universa nodes recognize the U smart contracts by its name and the issuer key/address. As a human, though, you are not even expected to recognize it – it’s an internal matter of the clients to recognize Us. Nothing interesting for a human user.
- Fungibility – the cherry on the cake to astonish you again about how flexible the smart contracts of Universa may be. You already know that Universa smart contracts are made fungible using the “SplitJoinPermission”, specifying who can split/join the contracts, how divisible the contract values may be, and – most importantly – what makes two smart contracts – “two values” – compatible with each other. And… as you notice in the source of the smart contract, there is completely no this permission defined in it.
This essentially means that you just cannot divide any U pack into smaller ones. You cannot combine different U contracts to give the result away to somebody – well, you cannot give away Us at all. The only operations allowed with this smart contract are changing the amounts of “transaction units” / “test transaction units” (only decreasing, only down to 0 – hence “utilizing” the energy reserve) and also revoking the contract completely. The whole strength of Universa network will protect you from doing anything other than utilizing the stored energy amount, or “wasting” it completely.
If there could be something as dissimilar to tokens – that is U. Non-fungible, only spendable, non-transferrable, not durable and not scarce.
Yes, Us are still a smart contract. But that’s not a “tokenized value of an asset”. But, basically, a tokenized network energy (with U amount as the u-nit of measurement). We’ve formulated what is the “computational network utilization energy”, and digitized it in the form of smart contract, purchasable for UTNs only. And made it decrease-only, so the energy “reserved” in the form of U can only be depleted, reminding you about the second law of thermodynamics and “the Maxwell’s demon”.
People may be tokenizing commodities, currencies, square meters (or feet) of real estate. Three years ago Universa already tokenized the computational energy, just think of it.