Assessing cryptocurrency token value
Developer activity, token utility, and community loyalty are important characteristics of any cryptocurrency token project. And certainly you can add censorship resistance, individual ownership of accounts, co-ownership of the project, and sound tokenomics.
When I first started learning about cryptocurrency it was from an academic standpoint of curiousity and desire to learn. But I remember reading more than one article focused also on longterm value as an investment. Those articles usually focused on different things, but the characteristics they always had in common were:
- Developer activity
- Token utility
- Community loyalty
Developer activity
This was often measured and published in news sites with Ethereum, Cardano and EOS usually being up there in the lead, then hundreds of coins would follow. Steem was not usually in the top, but it usually made a respectful showing. Hive as a hard-fork of Steem has always had a good amount of activity, and a large number of independent developers creating applications or improvements for the ecosystem.
Utility
This is always a big value characteristic. All the articles would say... Whats the token used for?
This is important because one of the arguments against the value of cryptocurrency is that it is a Ponzi Scheme as in investors buy it, hoping to sell it at a higher price to the next investor. The only profit or value was in this buy low and sell high cycle.
This gave me cause for pause as in it made me stop and think. Why was I buying a token? Did it have intrinsic value? As in backed by gold or silver or did it perform or facilitate a useful function? What gave the crypto token value?
This is the moment where you need to be honest with yourself about what value does the token project bring to the world.
Value and utility are not necessarily abstract, because a token backed by gold or silver has absolute value, and a token promising to cure cancer has humanitarian value, but a token project which tokenizes a genuinely solid business plan or solid idea has value based on that mental construct. So this is tricky.
First Steem and then Hive were valuable based on the demonstrated need and demand for social media platforms. Steem and thus Hive also had value based on the tokenization, or better stated monetization of the social media venue, whereby individual participants extracted value, defined as money from the project, instead of a central entity which provided the service and connnected all the participants.
This democratization or decentralization of power, control and profit / value extraction, is one of the core cases for utility and value for Hive in my eyes. It's not the only core case, but a big one. Add censorship resistance, individual ownership of accounts, co-ownership of the project, abundance economy, community and a few others.
Community loyalty
I came to Steem from what I call the jungle of cryptocurrency. It was a rough person eat person world full of scams, deceptions and bad luck. I experienced the joys of initial discovery of cryptocurrency and the sadness of the nature of a primitive world full of promise, but also full of scams and people stealing my money.
It was the best of times and the worst of times. Unfortunately people took this amazingly revolutionary idea, and many chose to build good things. But others chose to build bad things or tear down good things to make money.
In some ways my arrival here was one of seeking refuge from a storm, and peace in a war torn place I called planet Crypton. I found Steem and embraced the social community called Steemit. Which was not flawless by any measure, but it was a civilization. It was a home with multiple locks on the door, in a city with walls. It was a place where I could trust, but verify.
But most importantly it was filled with people who believed in the core principles of the system, and were working to develop, engineer, commercialize, socialize and teach others in a social atmosphere where networking and friendly connections were the core activities.
It was and still is very exciting, as we all learn, build and dream of a better tomorrow. Where we live not in a dog eat dog, or person eat person existence, in a world of scarcity. But instead where we live in a dog help dog, person help person, world of abundance.
Where my getting ahead doesn't depend on you getting behind.
I don't have to step on you to get higher. I can pull you up when I rise and I still rise, in fact pulling you up along with me can make me rise faster. And that to me made all the difference.
Summary
I believe Hive will be successful because of the use case of the token: social media, high levels of advanced technological development and community loyalty based on a novel or unique idea; which is a move away from the concept of scarcity where every person looks out for themself, to a concept of abundance where helping others makes us all more successful. I think you should come try it, after all it's free, and I think you will find that it can be amazing.
Shortsegments is a community member on Steemit and now Hive for over 3 years. A writer primarily about cryptocurrency, the blockchain, NFTs or non-fungible tokens and decentralized finance, with a little poetry and philosophy on occasion.
Read more of his writings on Hive here:
@shortsegments/hive-explained-article-four-the-new-and-improved-facebook
@shortsegments/hive-explained-the-reward-pool-and-upvote-system-on-hive
@shortsegments/hive-academy-hive-wallet-convenience-and-security
@shortsegments/hive-academy-the-three-hive-tokens-and-their-relationship
@shortsegments/hive-academy-understanding-delegation-a-financial-tool-for-passive-income
@shortsegments/hive-academy-learning-about-hive-resource-credits
@shortsegments/my-dao-revolution-song-decentralized-autonomous-organization
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