Cryptocurrency Heading For Mass Adoption

Few realize the power when it comes to the tokenization of everything.

This concept is going to become evident shortly. There is a good chance we start to see the major corporations entering the space. In fact, Raoul Pal is starting a company that is designed to help that advancement.

It is also likely to thrust cryptocurrency into the limelight and cast it in a completely different manner.

This is also what is going to determine Web 3.0 success versus failure.

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The Delusion Of Tokenization

With the bear market in full swing, many projects are being exposed for what they are. Throughout the evolution, the main focus was on tokenomics and how they could be toyed with for maximum appeal.

Few were concerned with utility and there was very little done to try in terms of building. Instead, the quick money was sought after.

The question is whether a project would be viable if there was no tokenization? How can a business succeed if there is no product or service being offered? With this frame of reference, it seems obvious. However, how often has we ignored this for something shiny?

A great story can garner attention but rarely is sustainable long term.

For the last couple years, tokenization hid a lot of bad projects. Certainly, starting a business is never easy. We know the success rate is low. That said, what we witnessed covered a lot of red flags.

Now we are at the time where people need to get serious. As the tide rolls out, we are seeing things exposed, warts and all. It is no wonder that many big name crypto projects are failing. They were not built upon strong foundations.

Unfortunately, this opened the door for existing corporations to enter the picture. Here is where people like Pal understand what is taking place.

Utility Tokens

Existing businesses are presented with an enormous opportunity via tokenization. It can add another layer to the existing models that are in place. Web 3.0 offers a huge benefit to these companies.

We can consider this the introduction of utility tokens. These are ones that apply to specific facets of a business, providing different features to the customers/users.

Many discussed this idea in the past but it never really took off. We might be close to the point where we can see this.

One obvious use case for tokens are in the form of loyalty programs. This is long a staple of many businesses, especially the airlines. The challenge is that we see very little in the way of a secondary market. With cryptocurrency, the tokens can be traded on permissionless blockchains, providing the greater value.

Of course, there is a benefit to corporations. Tokenization allows for marketing without dipping into the existing budget. Companies do not have to sell their tokens to generate a return. Instead, simply using them as part of a marketing strategy removes that funding from the budget.

This all is done with the goal of expanding the number of stakeholders. Loyal users are very valuable. While they get the benefits of the product or service, there is nothing else tied to their patronage. Tokenization will alter this completely.

Customer bases are communities. There is a common interest automatically since all like the same product or service.

Here is where Pal is looking to access.

$63 Trillion Worth Of "Intangibles"

How big is this?

According to Pal and his new venture, the market is $63 trillion. This is something that Science Magic Studios is looking to access.

ScienceMagic.Studios describes itself as “a digital asset venture studio” that advises and implements “the creation of digital assets (e.g., NFTs and social tokens) and web3 economies for brands, talent and their communities.”

Source

We can conclude the goal here is to get some of the biggest names in the world into cryptocurrency. When that happens, the exposure of the industry will skyrocket.

Naturally, few will realize what is happening. Today, people do not give thought to the infrastructure that is in place when they go online. We will rapidly move to that point with cryptocurrency.

As major corporations offer tokens as rewards, the idea of community will expand. These companies have built in users, hence being able to distribute millions of tokens rapidly. When tied to discounts, promotions, or upgrades, value is instantly generated. The "social" layer will only increase this is the entity is very popular.

It is easy to imagine how this could play out with a film or television show. The companies behind these projects can further enhance the loyalty of their viewers by tying a token to other aspects of the enterprise.

[Social tokens] are a huge opportunity for them.

Cryptocurrency Reversal

Thus far, cryptocurrency was basically start ups that built their model around tokenization. Even the ones that sought to provide legitimate goods or services were having to trudge along.

We are now embarking upon a completely reversal. The next phase of cryptocurrency could well be existing businesses integrating tokens into their model. They are not creating something from scratch. Instead, they are taking their existing customers and looking to capture the value of "community".

Here is where we can see the acceleration towards mass adoption. Fortunate 500 companies have customer bases that number into the millions. The introduction of a token by a company like Disney or MGM could bring millions into the space instantly.

It remains to be seen how quickly the gaming industry embraces cryptocurrency. This is an ideal alignment since their users are already involved with in-game currencies and assets.

One of the keys is going to be if these companies are willing to give up some control. By allowing things on the secondary market, that dilutes some of the power they wield. That said, corporations that head down this path will likely find it is far more profitable to do that in the long run.

Things are about to get very interesting within the world of cryptocurrency.


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Great post. I've been thinking along these lines myself. Utility tokens will hold their worth more than simply the next shiny thing.

I was toying with the idea of creating my own token for the island I live on, as there could be plenty of real-world uses when you consider the different Hive apps that interact with tokens.

The problem I have right now is that much of the information I am reading online suggests that just going ahead and creating a token (as an amateur enthusiast running a Hive community) might potentially lead to legal difficulties.

It seems that crypto-tokens fall into various financial regulatory categories (depending on your location), and that to run one, issue one and make one available on an exchange requires you to register with financial regulatory authorities and provide certain legal assurances.

Whilst this may all be fine for a fortune 500 company, what happens to us independent crypto enthusiasts just wanting to build a utility token for our community?

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What you state is correct. There is a lot to be sorted out. In fact, some believe a lot of existing projects are going to face some bad days ahead when they get the knock on the door for regulators.

There are a few constants we can take away:

  • Do not sell the token. Many places consider that selling an unregistered security

  • No founders stake: if there is a point of vulnerability, the governments will go after it

  • Decentralize: build on decentralized infrastructure so there is no vulnerability there

  • Distribution: get the token distributed to a fair number of people, with no single person having a large amount.

From what I can see, there are efforts to get more layer 2 decentralized infrastructure in place to help this process.

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Thank you, that's very informative. The info here gives me some great areas to make further research. Yes, I think my island would benefit from having its own local token. I'll have to think whether it's worth the legal exposure I may be putting on myself as an individual.

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It most likely would.

I would spend some time laying out a plan for the utility and how it is to be distributed. Hit me up on discord if you want some insight. I might be able to put you in touch with some who could help out with the technicals along with how to structure things to keep yourself removed from the equation.

If you are not directly profiting from the creation and distribution of the token, that removes a great deal of trouble (at least in the US). That is why you see SpkNetwork doing airdrops and giving the token away with the team behind it not getting anything more than anyone else.

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(Edited)

Thanks. I will, and I'll try and find you on discord when I've thought of a plan. I'd really like to get a project going - I think it could be great for the island. As you say, crypto is only just beginning and there will be real-world applications for it that we haven't even dreamed of yet.

The mass-scale adoption is inevitable. And he have a chance here to help to shape it into really beneficial ways. The risk is whether I want to open myself up to scrutiny - word get's round quickly on the island, so an island-specific token would certainly get attention one way or another!

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You're smart and you're correct. Even hive itself i believe would be classified as an unreqistered security. So what this means is if you put your money into these projects you taking tremendous risks and you can forget institutions putting a dime of their money into these projects which is why they don't

So they've tried to ostracize me for telling the truth because they want to live in delusion and they never succeed. if you create a project and sell an investment where people can profit from the work of others and not you then you don't pass the howey test which means every project here has violated the howey test but one i believe.

the only safe one is bitcoin myk and bbd coin. that is because all the coins are distributed free it is your value that mints the token and even if it does violate securities laws we're well equipped to adapt to a 501c3

meaning of course we already give the tokens away so then it becomes a token charity..so some would go that's stupid why would you do that? well a currency doesn't need to go up in value it only needs liquidity. it's like your currency in your pocket now. you don't care if it gains or loses you just wanna exchange it for goods so you don't carry big objects around.

and as you get more with us through the citizens dividend. So investing any money in crypto with the exception of bitcoin and i'd say bitcoin myk is a risk that i wouldn't take. its just pure gambling. this is why the markets will always crash 90% because without protection nobody is going to have confidence in them

even bitcoin if we're honest is so heavily manipulated. i mean you're still gambling to a large degree at this point and you can go gamble in las vegas and yield similar results if we're being for real

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(Edited)

That's an interesting take, and one that certainly needs thinking about. On the one hand, all crypto-currencies could potentially fall under some fairly stringent regulatory attention, should the authorities decide to turn their attentions to any of them.

And yet, there are many - utility tokens for one - that serve primarily as a useful mechanism within a game or project, rather than a traditional security.

For example, there have been many massive multiplayer games over the years that use in-game purchases or in-game items that can be bought or traded, which did not, before the age of cryptocurrency, fall under such legal scrutiny. But these days such games employ in-game assets as crypto-tokens (as in Splinterlands), which suddenly puts your project into the category of a financial institution.

I think my point is that governments are still lagging behind in many ways. They hear the word "crypto" in regards to a project and lump it in with securities and finance, when the tokenisation of the web will be far more nuanced than that.

It's just a shame that such legal ambiguity might either put some developers off, or place others developers into potential legal strife.

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No it's not an interesting take it's the facts. i've been a licensed professional in the securities industry over the last 20 years. That's not an opinion that's reality. The problem here on hive is many of the people coming in some this is their first investment they aren't knowledgable about any of these things. Our project bitcoin myk forks bitcoin. means if you hold bitcoin you have to receive bitcoin myk.

now gary genslar head of the sec has no intentions of coming after bitcoin. bitcoin doesn't classify as a security for him. ethereum does.. so at any point they could come after everyone but bitcoin but i doubt the regulations will extend deeper to bitcoin.

that's because with bitcoin you mine your own coins you don't profit off the work of others. Same thing with bitcoin myk you can't profit off the work of others because your value and your tokens exist because of you.. your network inclusion is part of the tokens you mint.. Yes you're right about game purchases .. businesses this person on your thread taskmaster he always talks about businesses on the chain because he doesn't understand a business on the chain is an unregistered security

so he may be fine breaking the law but let me tell you why i'm not.. i need regulation to come and get rid of all these scams and platforms that are the reason we dip 90% in most projects because they are utter garbage now you know what projects haven't dipped and remained down 90%? i can only think of 2.. bitcoin and bitcoin myk.. everyone else has bitten the dust and lost people alot of money because they are garbage.

another problem with a business on the chain.. why would i want that or a game or anything how would i enforce that? so what i have a ledger balance that doesn't mean if i have physical property or assets some place or servers that they will be protected by any entity so it's kinda uterly dumb... currency is different.. currency is not assets.. it's not ownership in your game

currency is your faith and trust and a ledger balance and all it does it becomes a medium of accepted trade.. a bit difference because with assets you want them to go up.. with currency it's best they don't go up but remain stable.. so i would say 90% of the people on hive don't understand this or they'd run to bitcoin myk although bitcoin myk is doing great network wise has already broken 20k registered accounts will surpass them quite easily.. they are measuring their success on speculation same as terra luna did not use case

if they were measuring on use case they'd ask questions like why is it that bitcoin myk can get 20k interested registered accounts and more but they can't? if i want a network i want the network with the biggest reach.. i want to do remittance payments globally i don't want 5 big money whales who manipulate the system when they get ready and call it success

so these guys have no idea.. guys like taskmastrer what they talking about or doing. that's part of the problem and that's why i gotta have regulation get here i'm cheering for it so we can stop this and educate people as they are going to get badly harmed already have... people already have committed suicide

bitcoin myk has done nothing but helped people.. distributed money to people with none only people it's harmed is greedy undeservant people who tried to manipulate the price.. that's the only people it's harmed.. so yea that's my take on that. keep doing what you doing.. keep using your brain as it's not many people on hive that does

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This all is done with the goal of expanding the number of stakeholders. Loyal users are very valuable. While they get the benefits of the product or service, there is nothing else tied to their patronage. Tokenization will alter this completely.

Do you mean that loyalty should offer the premise for incentivization by tokenization? I think this is good, I've never fully understood how tokenization can alter or change the course of a project.

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I believe tokenization will help capture the value that is lost in Web2 business models. However, for tokenization to gain a foothold it needs to be backed by a sound business model. This requires time and effort.

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There are layers of value which can be captured by cryptocurrency.

We lost it in Web 2 along with society in general. This is where crypto comes in.

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But for a coin to have a voice in the community, not only the strength of technology but also the strength of the community, I hope that the community will recognize the advantages of web3

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There's that catalyst laying around us untapped, we await the time when this catalyst will be integrated onto crypto and this whole space will explode beyond our imagination, it will be great if Pal is one of those catalyst we seek.

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When corporations start to get involved and drop tokens upon people. This is going to take off quickly once it starts.

It might be a while before we see the first one but once the virginity is lost, there will be a rush to bring tokens to market.

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As some are backsliding, many are seeing the beauty in investing in crypto. Soon it will be the talk of everyone.

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I totally agree as things are moving very quickly these days. I am keen to see which businesses are launching their tokens in 3 months time as we know 3 are with the enterprise tokens but have no names yet. Loyalty programs are huge and is the obvious route for many to get involved in Crypto.

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I have a feeling they are awaiting regulation. These companies are fearful of falling outside the bounds.

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Yes that was mentioned and they know something as Coti announced Q4 for the launch for the 3 companies involved.

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what happens I think is that before the "BOOM" of Cryptocurrencies everyone thought of making profits but without having solid foundations for it and at the first stumble those are the first to fall

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The boom turns the bust.

With corporations entering it will help to even things about a bit. We will see how this all evolves.

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Gaining momentum in mass adoption has always been difficult in history. But once you gain that critical mass, it comes automatically and the last leg of mass adoption has always been exponential. This is going to happen as I can see in the General studies question paper in the different competitive examinations, it is being asked to write a short note on Web 3.0, what is Blockchain technology, What is crypto, etc. This indirectly means that Blockchain is making inroads in academia. A good and healthy sign.

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I don't really think the gaming community really appreciates crypto right now. Most of the NFT projects haven't really had much success for the big corporations and the user base has been fairly negative. At least, I don't really see it working out anytime soon as the current financial system has way too many things that make it too tough.

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