So You Think You Know Your Shitcoins...
Utility Tokens, Just Illegal Securities?
I have heard an argument against utility tokens and other forms of tokens by someone that seems to believe they stumbled upon a truth that others do not know. It motivated me to write this post, since this opinion that utility tokens are worthless and that they are simply illegal securities is quite common and also quite mistaken.
Before we jump into why utility tokens are bad ass, first let's talk about another issue plaguing the world today. I HATE ADVERTISEMENTS!!! Do you? I bet that you do... Well, cool, let's all just start downloading ad blockers and leave those social networks and professional blogs to figure out another way to get by. BUT DON'T STOP GIVING ME FREE SHIT! I like the free shit... I enjoy watching videos for free, reading blogs and hell, like many today I don't want to pay $9.99 for a fucking book. I don't particularly care to pay for music either. Its a fucking download! Give me that shit for free! I don't like paying for journalism either, those news guys have to find another damn way to pay the bills, because I ain't accepting no cookies and I'm blocking them ads!
We live in a global culture that puts ever more pressure on people with knowledge to give that knowledge away for free. It is becoming expected for people to do this, despite the fact that the work of writing a book, coding an app, designing a course and reporting the news is very demanding shit. Nevertheless, knowledge is power, we all recognize that paywalls create economic inequality and thus the culture of demanding free stuff grows ever more popular. Right to earn a living be damned, we respect our electrician's right to an income, but fuck the edupreneur, because knowledge is power and he owes us that shit for free.
So You Think You Know Your Shitcoins...
Okay, now that I got that rant out of the way, let's get back to tokens... Utility tokens are currently being used for a variety of idiotic reasons. Some dapp projects clearly created a token only for fundraising purposes as their app has no apparent need for their damn token. That, however, does not prove that utility tokens are useless or less than pretty fucking revolutionary. Utility tokens or consumption tokens are the solution to the serious issue I mentioned above.
Should information be free? Hell no it should not be free. Taxi drivers shouldn't have to bus people around for free, because it costs them time and money. Does information or knowledge cost the book author? You better believe it does, in time, money, and the most demanding thing of all: life experience. Not only does the book author need to spend a lot of time writing the book, they need to do a whole lot before that to earn enough knowledge to be worth anyone's time. That should not be free...
Well then, what about the unfairness and inequality that comes from a lack of free information flow? See, there is a difference between something being free and something being freely available. The issue is not and never has been about information being free, but rather, about it needing to be freely available to people. Tokenization creates a new way to get information and other assets into the hands of those that cannot afford to purchase it.
For example, let's say a book author creates a token and each token is equal to one digital copy of the book, while ten tokens gets you a physical copy. And let's say that book author promises the crowd that he will make a cap of 500,000 physical copies and never give out anymore. He then proceeds to do a book-backed token sale as a pre-order for the book that is not yet released. 400,000 tokens are available for purchase while 100,000 can be earned for microtasks.
The book author could potentially be saving himself thousands of dollars on advertising by leveraging the work force of the gig economy and rewarding people for retweets, facebook and youtube likes of the author's content. The book's information would not be free, but it would be freely available. This means that if someone cannot afford to purchase the book they can still EARN the book for doing something the author needs. That's tokenomics at its finest!
Another example could be for a musician that allows people to buy access tokens to all of her music. She doesn't charge anyone for the music directly, but they have to buy a certain amount of the token to obtain access to her music collection by locking their tokens up or "staking" it. In addition to this, she can provide a method of earning access tokens.
A final example I will make is the open source programmer. For quite a while open source projects struggled to make any money, private was the way to go. Then people started to earn with software as a service, but still, the huge money came in with blockchain. All of a sudden, by creating some cool open source application you could strike it rich by selling off ecosystem tokens that empowered users to be able to do something cool within the app. Before all these "shitcoins" it was the corporate dev on side with the greenest grass while the open source dude took in the ass.
Thanks to the token economy, all of that is about to change. And if the sharing economy is ever to take off, I argue that it will do so by means of a sea of tokens.