Utility: The Defining Word for Tokens in 2018

gepubliceerd op by Coindesk | gepubliceerd op

Keeping all this in perspective, it's no shock to anyone that the crypto community faces ever-increasing scrutiny, with regulation in its various forms stretching from China to the U.S. The biggest common denominator in the argument around cryptocurrency is whether the tokens in question truly do have an underlying utility.

A recent article from Bloomberg reported that of 226 ICOs and token sales analyzed, only 20 of the corresponding tokens were actually used in the running of their networks, demonstrating utility of some sort - that's less than 10 percent.

For many companies, utility appears to be an afterthought, but for a token to be successfully adopted into the community, it is the most critical component.

When the market slows, the tokens that have no utility will ultimately not have any value at all.

Tokens and platforms centered on utility will continue even if their creators move on or disappear.

Purchasing services: The baseline qualification for most companies issuing tokens should be that the token can be used to purchase services within their platform.

In the beginning, when the company is scaling and spending more money than they are making, the volume of tokens exchanged for the purchase of services will be minimal, but as the company's revenues grow, so will the token transfer rate.

You don't need to require tokens to purchase services, but providing the option can go a long way in driving the use of your token.

If 2017 was the year of the token, then 2018 will be the year of utility.

In the coming year, I expect we will see tokens that provide true utility float to the top.

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