Shawn Wilkinson is that the co-founder and chief strategy officer at Storj Labs wherever he oversees strategy, vision and design for the Storj network.
It's pretty clear that 2017 was the year of the token.
Whether you are reading the news, attending a trade event or simply minding your own business operating in your most popular restaurant, you do not need to venture way to listen to somebody talking concerning another token sale. There area unit currently over one,000 totally different digital tokens.
Keeping all this in perspective, it's no shock to anyone that the crypto community faces ever-increasing scrutiny, with regulation in its numerous forms stretching from China to the U.S. the most important common divisor within the argument around cryptocurrency is whether or not the tokens in question actually do have associate degree underlying utility.
The simple truth is that a lot of tokens do not...
A recent article from Bloomberg rumored that of 226 ICOs and token sales analyzed, solely twenty of the corresponding tokens were really employed in the running of their networks, demonstrating utility of some kind – that’s but ten %.
For many firms, utility seems to be associate degree afterthought, except for a token to be with success adopted into the community, it's the foremost crucial part. With the number of tokens on the market these days, and new ones being launched a day, it’s clear there's a bubble, although the scale of it'd be debatable.
When the market slows, the tokens that don't have any utility can ultimately not have any price in the least.
Opening the sepulture
If you wish additional proof of the importance for utility, look at deadcoins.com, that acts as a digital sepulchre for the 600-plus cryptocurrencies and tokens that have given up the ghost.
As you look over the summaries of a number of these coins, that might primarily be "cause of death," you will see notes like, "trading with a market cap of $183," "scam" and "shut down by SEC." a decent thanks to recap these failing ICOs is there was no functioning platform with established utility. Tokens and platforms focused on utility can continue albeit their creators go on or disappear.
Just verify BitShares and bitcoin as a number of examples.
There area unit many edges to making utility with a cryptocurrency (beyond avoiding the SEC hammer). Building utility capabilities for your token within your platform creates a healthy system. albeit you do not have folks speculating on the worth of your token and your token is not listed on any of the large exchanges, it'll be bought, sold and listed for services on your platform and amongst your community of users.
Delaying a product's build till once a sure-fire token sale is additionally an enormous lost chance.
Post-sale, you have got thousands of excited, new community members that hold your token and need to envision you succeed. If you have got a operating platform with utility, you'll be able to simply bring those new token holders into your broader community to grow adoption wherever it is sensible, and build large momentum.
I expect that in 2018, it'll be rare to envision firms that issue token sales while not some type of product. For token holders, that ought to be a significant demand once doing their due diligence.
Secret recipes
And there area unit some very attention-grabbing ways that firms area unit making utility.
Here area unit a number of that stand resolute me:
Purchasing services: The baseline qualification for many firms issue tokens ought to be that the token will be accustomed purchase services at intervals their platform. buying services with tokens accelerates the time it takes for a dealing to settle, it makes buying services easier and adds a component of privacy in addition. within the starting, once the corporate is scaling and defrayal extra money than they're creating, the degree of tokens changed for the acquisition of services are going to be tokenish, however because the company’s revenues grow, therefore can the token transfer rate. You don’t ought to need tokens to get services, however providing the choice (and probably providing a reduction for doing so) will go a protracted method in driving the employment of your token.
Create a independent ecosystem: If you'll be able to produce a marketplace that connects patrons and sellers, facilitating transactions utilizing your token you'll be able to produce a independent system that's supported transacting your token. One example is Golem, that uses its GNT token to power its localized computing network. firms in would like of process power pay with GNT, that is then accustomed pay people World Health Organization share their computing power once their computers area unit idle. This creates a massive network that lives off the utility of GNT.
Automated sensible contract payments: one in all the areas for the most important utility chance is sanctionative new capabilities with sensible contracts. one in all the advantages to sensible contracts is that enable|they permit} machine-controlled payments that allow devices to autonomously participate within the network. Your sensible icebox cannot swipe its mastercard at Amazon S3 to store its information, however I might set that up with Storj and STORJ token.The flexibility from sensible contracts additionally permits different ethereum platforms to integrate on the back-end. At Storj, we've got several blockchain firms World Health Organization area unit integration with U.S.A. on the back-end. once a user at another company pays for his or her service victimisation our partner's token, a little of that price will be born-again to STORJ to acquire the storing of their information.
Room to explore
Still, sensible contracts arguably have a number of the foremost attention-grabbing utility examples, several of that have nonetheless to be uncovered.
This is why the grand majority of token sales area unit for ERC-20 tokens, that leverage ethereum’s blockchain and its underlying sensible contract technology. In fact, our team at Storj underwent a token sale this year that concerned U.S.A. migrating from a Counterparty token to associate degree ERC-20 token. we have a tendency to saw the large chance to leverage sensible contracts and therefore the de-facto normal for tokens at intervals our platform.
This year has been a vast year for cryptocurrency, blockchain and sensible contracts and that i expect the approaching year are going to be no less exciting. But, if 2017 was the year of the token, then 2018 are going to be the year of utility.
In the returning year, I expect we'll see tokens that give true utility float to the highest. And within the method, there'll doubtless be more tokens left behind.