Tokens were the hype of 2017 into 2018. Now everyone is skeptical and beginning to question their value.
Tokens, more often than not, are not backed by company equity, revenue streams, physical assets, or even hold legal status in current regulatory frameworks. (We do not believe in the trend of “security tokens”, which are backed by these things, and think they are harmful to the goal of decentralisation. We will expand on this viewpoint in a future blog)
Does this mean tokens have no value?
Not at all.
If you analyse tokens with “today’s way of thinking” then yes, you may come to the conclusion tokens hold limited to no value.
But, the Blockchain industry is futuristic by nature and judgements derived from current day thinking often do not hold any merit.
When first analysing value, we need to look first at the token’s purpose. The majority are deemed “utility” tokens, which simply means that the token is used in some way, shape, or form. Most commonly this usage refers to access costs, meaning that to use a product or feature, the user must “spend” an amount of the tokens.
“Spend” typically means transferring tokens from one user’s control to another. This could either be a transfer to the company (think revenue) or it can result in the tokens being burnt (removed from the circulating supply forever). In a future blog we will go into detail on the pros and cons of the different “spending” models for tokens.
So assume a token is a “utility” token. Does the user experience of having to acquire a specific token for each application someone uses make sense?
Think about this in modern times. Would it make sense for McDonalds to require you to convert Euros into McDonalds Dollars to buy a hamburger? What if you have some McDonalds dollars left over and want to have Burger King for dinner? You would have to convert the McDonalds dollars back to Euros and then into Burger King dollars. This is currently how the token ecosystem works and it does not make sense for usability.
Change is on the horizon.
In the near future, token holders will be able to spend any token they hold and recipients will receive any token they desire. We see this in its first stage with start-ups such as Kyber Network and Bancor; however, these currently require manual conversions by the user. In the upcoming years this will transition to being completed all on the back-end, behind the scenes to the users. For example, If users only hold Ether but an application requires DOGE, they will not have to acquire DOGE. They will simply be able to send their Ether to the recipient (application) who will receive DOGE (without ever touching Ether).
So let’s look at this from the perspective of the MyBit Token (MYB). To access low-risk, high-yielding investments on MyBit Go — an investment platform powered by the MyBit Network — a user must burn $99 worth of MYB.
In the current day, a user needs to manually convert (via an exchange) a portion of their crypto holdings into $99 worth of MYB. Then spend those to access the MyBit Go platform. Do-able, yes. Annoying, very.
We believe this will change in 2019. To access MyBit Go, a user will be able to spend $99 worth of any token they hold, and then behind the scenes it will be converted to MYB and burnt. This solves a large bottleneck in terms of usability of tokens. When tokens are more usable, their values will rise. Especially if they are more usable than cash and other forms of payment — and we believe they are. Cash is limited to location, nearly every country has their own currency and they do not accept others. Tokens are global and have no boundaries, they can be used anywhere. This gives them immense value over fiat currencies.
We believe this is going penetrate society much further than just cryptocurrencies alone. In our next blog, A Cashless Society, we will go into detail about how we envision a future where anything you own can be used to purchase nearly anything — such as spending a portion of Apple stock to directly buy a pizza.
Change is coming and tokens are the future.
So are you ready to join the movement? Then contribute to our Token Distribution here:
