What the heck is Cryptocurrency 2.0?
Well I just made it up; at least I think I did since I have yet to hear anyone else use it. Nevertheless, for categorization, it works.
What do I mean by Cryptocurrency 2.0?
When we look at most of the tokens on the market, most of them were acquired by early adopters. In fact, we are still in this phase for the most part. Whether it was anarchists, geeks, technologists, futurists, or the anti-establishment people, these groups formed the core of the crypto buyers since Bitcoin came out. Many of them jumped on BTC, LTC, and ETH when they were to be had for a song compared to now. These same people were the early purchasers of many of the other alt-coins we see on coinmarketcap.com.
We are now seeing the second wave of buyers: finance people. Wall Street is here and, in my view, one of the main reasons the marketcap went from $250B on Thanksgiving to over $625B less than a month later. We are going to see more of this behavior over the next year.
What all these groups have in common is they entered the cryptocurrency realm with money. They bought their way in. Even those who mine tokens had a capital investment (which kept escalating as competition grew).
This is what I call Cryptocurrency 1.0. All the tokens out there that require purchasing. Naturally, many of these coins will evolve and can move into the 2.0 category but I want to keep the distinction clear.
So what makes STEEM Cryptocurrency 2.0 and why is it important?
STEEM, along with a few other like Manna, which I wrote about yesterday, do not require money from people. Their acquisition is tied to why it exists. STEEM is a reward for posting, commenting, and upvoting. While it is available on the open market for purchase, people can sign up on Steemit.com and start receiving the cryptocurrency.
This point is crucial as we travel down the path in the next couple years. In my estimation, after we get through the financial people and their Wall Street money, we will be at the point where the general population is the next to enter. This is where it gets tricky simply because I do not believe the majority of this group will ever buy a single token. They are not speculators, early adopters, or tech people. Hell, most of them do not even contribute to their 401K. Whether it is because they cannot afford to or simply do not take the time to concern themselves, the bottom line is they are not going to be buyers of cryptocurrency.
At this point, we are presented with quite a problem. We know that we are seeing the move to a tokenized world. Therefore, if these people will not purchase tokens, what is going to happen? The answer is STEEM, Manna, and a few others. People will get tokens simply for participating in what the token was designed for. Tokenization is going to happen to all facets of the Internet.
For this reason, the coins that I believe will be successful, outside a few of the big ones which could be transactional and store of value, will be the ones where the average person is given the token in accordance to what is was designed for. This is Cryptocurrency 2.0 and STEEM is already operating on this premise.
To me, STEEM is ahead of the game. While other tokens are trying to figure out where they fit or how to scale up, STEEM is chugging along in keeping with its design. Over the next 6 months, we will see at least another 500K people sign onto this blockchain. These people are not early adopters. They are second or third generation Steemians referred here by someone who is making some money.
The situation only magnifies when we get towards the second half of 2018. My forecast is that we are going to see some substantial growth rates by that point. Almost all of those people coming on at that time will have no interest in cryptocurrencies. Naturally, they will learn the basics since STEEM is the currency of the platform. Nevertheless, that will be the extent of their learning. From this viewpoint, I guess the fact that Steemit.com prices things in dollars on the site is a benefit.
For those wondering what the "winners" will be over the next few years, I would suggest looking at those tokens which have a utility to them which the average person can get involved with. In other words, is the token utilized as a reward for some behavior? Is the basic essence of the token tied to some activity. On Steemit, STEEM is a reward for one's participation as a content creator/curator. With Manna, the token was designed to be distributed as a basic income. Bitradio is similar to IHeart and rewards people for listening to their stations.
Whatever aspect of the Internet or online activity you look at, at some point there will be a token to reward people for it. Search will have tokens; web browsers are on the way (BAT); storage (SIA; STORJ); porn (Vice); photo sharing (appics); the list will expand over the next year.
These are all part of what I consider to be Cryptocurrency 2.0. While some of these projects might not make it, I feel STEEM is not in this category. It is far too advanced for what it was designed to do. Already we are seeing an average of over 1M transactions a day on this blockchain. That is a lot of activity and presenting a widening gap from the other tokens. There are 35K active daily users, most of whom are very dedicated to this platform. Since the reward pool is established and cannot be changed, there is little incentive to leave. This core ensures that this blockchain will keep growing.
Tokens are to the blockchain as Email was to the Internet. It is the first application that many are to experience with this new technology. However, make no mistake, just like email was not the only application for the Internet, tokens are just the first stage of blockchain. Back in 1994, when people were still messing with dial-up and learning about basic email, the idea of Facebook or YouTube was beyond comprehension. Even if you could envision it and tried to explain it to the people them, they would have blown a gasket. It was too much. The same is true now. Most of us cannot even think about what life with be like with DAOs or any of the other applications which will be on the blockchain in the next 10 years.
STEEM is already ahead of the game with the direction of cryptocurrencies and the impact of blockchain on the social media realm. This will provide a wonderful ride upward over the next couple years. The fact that the token is positioned like this gives STEEM an early advantage. Of course, the success long-term is going to require the continued development as the world transitions from Cryptocurrency 2.0 to whatever 3.0 is going to be.
And keep in mind, none of this has anything to do with price action.
If you found this article helpful, please upvote and resteem it.
Pictures by Google Images.