<html> <h3>One of the hardest aspects for many users to grasp is how a cryptocurrency token could actually be valuable in the long run, and it's not an easy thing to wrap your head around.</h3> <p>One of the hardest things for individuals who are new to cryptocurrencies to grasp is how these 'magical internet tokens' actually hold real world value, and will be able to maintain that value into the future. While it's clear that there are many coins that hold more value than others, there are many projects that enable their tokens to actually achieve a real world value. There is a clear distinction between value and price, because just because a token fetches a high price does not say anything to its actual inherent value. There are many aspects of a token and project that can enable the token to have a chance to gain and achieve long term economic value on the platform. Another very important thing to remember is that the only number that actually matters is the total market capitalization of a toke, because the number of circulating tokens varies so widely from project to project. </p> <p>https://media.licdn.com/mpr/mpr/AAEAAQAAAAAAAAZXAAAAJDdlNGFiNWZkLTc0NTktNDBhZC05MDQwLTk0Zjg5ZTU1ZGI1Zg.jpg</p> <h3>Price level does not correlate to value.</h3> <p>The simplest explanation that I can offer is that in order for a token to achieve and maintain real world value, it must be required in order to interact with the blockchain in some way. Even just thinking of Bitcoin, one could argue that Bitcoin is inherently valuable because it is required to send transactions and interact with the Bitcoin network. I really don't think that Bitcoin is a great example, because the ability to interact with the Bitcoin network doesn't allow for all that many practical use cases. When we consider the Ethereum project, the token Ether is required for virtually all actions on the platform. This means that in theory as more individuals begin to use the platform, there will be a greater demand for the tokens which will cause an increase in price level.</p> <p>I think that one of the reasons that it seems so difficult for individuals to grasp how access to network interaction could actually be that valuable, but that's likely because there are still relatively few projects that have practical present day use case. As a platform is able to prove its advantages for individuals over the systems that it is attempting to replace, then the ability to interact with the platform becomes more valuable. The major problem in the cryptocurrency market currently is that it's so hard to see how a token could actually hold real world value, because we have yet to see many projects experience a large demand for their tokens for the purpose of present use on the platform. I think we are seeing an excellent example of real world demand for Ethereum right now through the EOS distribution contracts, but that isn't quite the same. </p> <p>There are many factors that help to determine the level of actual value that a token has the potential to hold, and the most important of these in my opinion is what the token entitles you to on the platform. When we take a look at DPOS systems, it's easy to see why stake has direct value for use on the platform. Before the project is actually adopted by the mainstream it may not seem like the stake actually holds much value, but the influence and entitlements from stake will have incredible value after a project is adopted. Let's consider Steem and the Steemit platform for an example. Big stakeholders hold much of the power over voting of posts, witnesses, ect. and that enables them to have a greater influence on the direction and shape of the platform. While small and medium users have more power than ever before since HF 19, the majority of the stake still lies within a small group of users. This means that an investor will know that they not only have an ownership stake in the platform, but they will also have an influence on the projects direction through their voting choices. </p> <p>http://www.leaderpromos.com/talking_promotional/voting-is-power-Leaderpromos%20copy.jpg</p> <p>Now let's consider the Bitcoin network. If you own stake in Bitcoin, you are entitled to virtually nothing because Bitcoin still operates using a Proof of Work mining process. That means that no matter how dishonorably a miner acts, they have the same chance at producing blocks as anyone else with the same level of computational power. This gives stakeholders very little influence over the direction or shaping of the network, and in my opinion is the reason that Bitcoin is not valuable in terms of use on the Bitcoin network. Bitcoin has always attracted users through its decreasing distribution and principle of deflation, but the inherent value of Bitcoin is very small. That's not to say that Bitcoin will not last in the long term, but simply that in my opinion Bitcoin isn't nearly as valuable as many other tokens. </p> <h3>How could influence over a platform translate to real world value?</h3> <p>While it may not seem like influence over the Steemit platform has real world value, in the future the ability to have major voting influence could prove to be much more valuable than it is today. As more and more features and applications come to Steemit, the desire to use the platform also increases. This seems obvious, but we must remember than all users are required ( as of now) to maintain a level of SP in their account in order to have access to the minimal bandwidth required to interact with the Steemit network. As a user holds more stake, they are entitled to more of the total network resources which a developer would need in order to build applications or external features for the platform. </p> <p>The concept that accompanies DPOS systems of an individual requiring a minimum 'balance' in order to interact with the network is genius, as is the increase of resources that accompany holding more stake. If an individual is able to have access to an amount of total network resources proportional to their stake, then as the platform becomes more popular that stake becomes more valuable. The more users who wish to interact with the network, the higher the demand for the token for the purpose of current day use will be. </p> <p>http://www.livinglakeshore.com/wp-content/blogs.dir/223/files/2016/01/Ownership-3.jpg</p> <p>I hate to talk about the upcoming EOS project again, but I think that taking a look at it can be very helpful for understanding why influence and entitlement are important. The EOS platform will split up its total available bandwidth and storage proportionally to all stakeholders, which means that in order to develop a DApp or use the platform a user will need to first acquire stake. Like Steemit, I assume that users will be given the minimum requirements upon account creation, but the concept of needing stake in order to establish an application or business on the platform is extremely important. EOS will use an ownership model rather than a rental model in terms of entitlement from stake, meaning that if you own 1% of the total stake, you will be entitled to 1% of the network bandwidth and storage without having to loose any stake. </p> <p>On the Ethereum platform in order to run a DApp a user must consistently pay gas fees and make sure they have enough Ether for the contract to run, but EOS will not 'charge' any transaction fees or any other network fees. This will give businesses and developers to either purchase the amount of stake they need to have access to their desired level of resources, or they could rent stake from other users. This means that in order for any interaction on the EOS platform, all parties are required to hold a specific amount of stake depending on the requirements of the task. This will give the EOS tokens an immediate real world value after the project is adopted, because the tokens are the very thing that enable individuals to interact with and develop on the platform. It's still hard to imagine, but once a platform is adopted influence over the platform and entitlement to resources will both likely be much more important and valuable than they currently are. </p> <p><em><strong>I really hope that you enjoyed reading this post, and as always I urge you to leave any comments, questions, input, ect. in the comments below! Thanks for reading!</strong></em></p> <p>image sources:<a href="https://media.licdn.com/mpr/mpr/AAEAAQAAAAAAAAZXAAAAJDdlNGFiNWZkLTc0NTktNDBhZC05MDQwLTk0Zjg5ZTU1ZGI1Zg.jpg">1</a>-<a href="http://www.leaderpromos.com/talking_promotional/voting-is-power-Leaderpromos%20copy.jpg">2</a>-<a href="http://www.livinglakeshore.com/wp-content/blogs.dir/223/files/2016/01/Ownership-3.jpg">3</a></p> <p><br></p> </html>
| post_id | 5,453,533 |
|---|---|
| author | cryptofreedom |
| permlink | what-qualities-give-a-cryptocurrency-real-world-value-that-is-sustainable-in-the-long-term |
| category | cryptocurrency |
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|---|---|---|---|---|---|
| berkah | 0 | 15,858,078,287 | 3% | ||
| steem-id | 0 | 11,834,593,336 | 3% | ||
| ajvest | 0 | 261,503,443,922 | 100% | ||
| pnc | 0 | 8,571,023,982 | 3% | ||
| teamsteem | 0 | 564,110,994,708 | 3% | ||
| livingfree | 0 | 20,879,847,068 | 1% | ||
| kendewitt | 0 | 8,459,878,675 | 10% | ||
| sergey44 | 0 | 184,702,480 | 100% | ||
| mata | 0 | 62,153,339,904 | 55% | ||
| lamech-m | 0 | 598,687,099 | 3% | ||
| carrinm | 0 | 33,084,894,556 | 10% | ||
| annaarthur | 0 | 7,144,600,631 | 100% | ||
| thejohalfiles | 0 | 538,278,694,501 | 1% | ||
| steemprentice | 0 | 2,533,855,565 | 0.9% | ||
| cryptofreedom | 0 | 37,505,144,119 | 100% | ||
| bisht | 0 | 520,398,842 | 100% | ||
| justinashby | 0 | 1,215,026,364 | 3% | ||
| nlizotte | 0 | 6,559,836,237 | 27% | ||
| awesomianist | 0 | 198,401,153 | 0.3% | ||
| youngjae | 0 | 61,910,432 | 2.4% | ||
| thedailyroto | 0 | 298,494,420 | 3% | ||
| adrianwastag | 0 | 232,312,917 | 100% | ||
| ylgv | 0 | 1,937,685,242 | 30% | ||
| altcointrends | 0 | 324,307,730 | 5% | ||
| beng05 | 0 | 65,161,231 | 3% | ||
| gigafart | 0 | 38,745,241,026 | 0.6% | ||
| gohba.handcrafts | 0 | 268,357,017 | 3% | ||
| dlina-v-metrah | 0 | 601,829,711 | 100% | ||
| mariotril | 0 | 50,211,671,398 | 100% | ||
| paceta | 0 | 163,945,033 | 100% | ||
| saper | 0 | 4,973,665,441 | 100% | ||
| somethingsubtle | 0 | 9,882,421,095 | 100% | ||
| plumeria | 0 | 1,079,841,628 | 100% | ||
| kintar0 | 0 | 126,671,145 | 100% | ||
| jrose1010 | 0 | 299,302,564 | 100% | ||
| jtcyp | 0 | 778,140,221 | 100% | ||
| ronni | 0 | 12,736,544,296 | 37% | ||
| altsaniy | 0 | 783,469,068 | 100% | ||
| jatinaus | 0 | 342,404,449 | 100% | ||
| aeovian | 0 | 1,160,692,951 | 100% | ||
| steem-buzz | 0 | 777,663,259 | 100% | ||
| permieemmy | 0 | 0 | 100% |
I read EOS tokens with interest, although I do not think so far to buy, to wait for their appearance on the stock exchange.
| post_id | 5,454,689 |
|---|---|
| author | dlina-v-metrah |
| permlink | re-cryptofreedom-what-qualities-give-a-cryptocurrency-real-world-value-that-is-sustainable-in-the-long-term-20170628t194108616z |
| category | cryptocurrency |
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I would say that the value of a coin is given first by the trust of the users then by the problems it solves. In theory a currency does not have a value by its own, it's just a value holder but not solve another problem except easing trading. As long as people believe that they can change the coin for food, clothes, etc, that coin will hold same value. A long time ago gold was playing this role because was hard to find/forge/fake. Bitcoin is like gold, as long as people trust it it will hold value. But now there are some coins which holds some value because they are hard-coded directly in a market, to solve a specific problem. One good example is steem. Steem does not only hold value because people trust it, but it's a representation of the value people creates: quality content. Siacoin and Storj they have value because people can share space on their drives. Golem has value because people can share their resources... Etherem couldn't miss from here, because it's more than a coin. Through smart contracts it brings the infrastructure which makes possible for everyone to create their tokens. It seems eos is trying to do it smarter. I would say that many crypto-currencies from the second wave are coming to solve such problems many of them will die slowly but a few are to stay. And steem is one of them...
| post_id | 5,455,051 |
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| author | steem-buzz |
| permlink | re-cryptofreedom-what-qualities-give-a-cryptocurrency-real-world-value-that-is-sustainable-in-the-long-term-20170628t194443029z |
| category | cryptocurrency |
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Great read. Without going super deep into this at this time: I suggest you research Ripple's application and the integration of XRP if you want an assessment of real world value. Steemit falls into the category as well, along with a few others. While looking for "real world value", you are searching for a use case that actually has a specific use for society to function on a grand scale. You are correct on market capitalization. ~14 bil left cryptos the other day and everything went red except for a couple currency pairs. It has a direct effect on speculated price. Btw, subbed and upvoted :)
| post_id | 5,455,100 |
|---|---|
| author | nlizotte |
| permlink | re-cryptofreedom-what-qualities-give-a-cryptocurrency-real-world-value-that-is-sustainable-in-the-long-term-20170628t194502904z |
| category | cryptocurrency |
| json_metadata | "{"app": "steemit/0.1", "tags": ["cryptocurrency"]}" |
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Very good Read. Well-written, great points. Upvoted and followed. I am taking the Small Coin Strategy approach. Check out my hottest article! You might like it! https://steemit.com/cryptocurrency/@jrose1010/the-small-coin-strategy-potential-to-make-hundreds-of-thousands-maybe-millions
| post_id | 5,455,390 |
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| author | jrose1010 |
| permlink | re-cryptofreedom-what-qualities-give-a-cryptocurrency-real-world-value-that-is-sustainable-in-the-long-term-20170628t194849684z |
| category | cryptocurrency |
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Great article, thank you, cryptofreedom, following you
| post_id | 5,456,378 |
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| author | crypto-p |
| permlink | re-cryptofreedom-what-qualities-give-a-cryptocurrency-real-world-value-that-is-sustainable-in-the-long-term-20170628t195711455z |
| category | cryptocurrency |
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| crypto-p | 0 | 0 | 0% |
Wow, that was a thorough post! Well done. I can see I need to read up on EOS tokens
| post_id | 5,459,368 |
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| author | ronni |
| permlink | re-cryptofreedom-what-qualities-give-a-cryptocurrency-real-world-value-that-is-sustainable-in-the-long-term-20170628t202725914z |
| category | cryptocurrency |
| json_metadata | "{"app": "steemit/0.1", "tags": ["cryptocurrency"]}" |
| created | 2017-06-28 20:27:24 |
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Nice Post on CryptoCurrency, Cleared my confusion ... :)
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| author | bisht |
| permlink | re-cryptofreedom-what-qualities-give-a-cryptocurrency-real-world-value-that-is-sustainable-in-the-long-term-20170628t203234804z |
| category | cryptocurrency |
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| bisht | 0 | 520,398,842 | 100% |