Cryptocurrency is officially a known entity among the world’s major economies, and all have been introduced to an increasing number of new blockchain solutions over the last year. There are now hundreds, if not thousands of cryptocurrencies with different ambitions and technological foundations, but the question of their value is still unclear. Initial coin offerings (ICOs) are to blockchain startups as the IPO model is to a publicly traded company, with coins acting almost like a type of informal stock in the most promising projects. Naturally, investors in this new environment are drawn to quality, meaning startups that are eager to solve a problem, or have big potential beget greater volume and price.
Despite the efficacy of ICOs, regulators target this unique function of blockchain with the most fervor, given how much of a threat it is to uninitiated retail investors and the status quo alike. It’s true that investors must take caution when participating, but as it often happens in blockchain communities, self-regulation is already happening. The market has learned to identify and support only those projects that use blockchain to build sustainable value economies, improve conditions for all stakeholders and maintain their quality, regardless of the traditional market’s involvement.
Distributed Digital Services Have Value
The most effective of these services understand exactly what their users want and employ blockchain to take from them collectively whatever is required to provide it for “free”. Blockchains can draw processing and graphics power, memory, and other more focused inputs that provide value for the system itself. One excellent example is Golem, a service which charges no fiat fees while providing all customers with access to a remote supercomputer. Used largely for rendering large, complicated 3D graphics, working with algorithms, or studying cryptography, Golem only asks that members sacrifice a bit of their processing power in exchange. The blockchain coordinates these many processors to provide its supercomputer with the juice it needs to run.
GNT is awarded those participants who let Golem siphon their power, and it’s also how one rents time on the supercomputer itself. The value of GNT directly reflects user demand for this service and provides another relevant example of how intrinsic value impacts a coin’s price. Despite the efficacy of Golem’s solution, its niche user base is a limiting factor which may be why the coin has struggled to eclipse $1.00. However, Golem remains one of the most exemplary solutions due to its airtight value economy, which will sustain itself regardless of what the future holds.
There’s Nothing Like Hard Work
Other cryptocurrency solutions derive their value from inputs that aren’t necessarily computer-powered. People with skills can use their own hard work as a commodity as well, which is the idea behind salaries or paychecks, but one that can also be tokenized by blockchain platforms. This idea is close to the value proposition of Coinlancer, which is essentially a decentralized jobs marketplace where independent workers and companies can connect. It represents an upgrade from the ways that freelancers currently find work through sites like Upwork or Fiverr. These sites often charge upwards of 20% total in fees and leave users without resolution when they aren’t paid for their work. Though the platform itself won’t land until the second quarter of 2018, the value of CL—Coinlancer tokens—will reflect the growing network of workers looking to improve their earning power by eschewing more traditional freelancing outlets.
More than the number of working users, however, the intrinsic value of CL tokens reflects the value of the work that one can purchase with it. Content, programming, video editing and other useful skills are at the disposal of token holders, who will also enjoy the increased transparency when attempting to find the best talent—not just those users who’ve managed to game the system to improve their ranking and visibility.
Dash to the Dark Net
Cryptocurrencies can develop value from ideas beyond the insular or niche and grow because of where they can be spent or whom they benefit most. While a digital cash variation like Litecoin proposes to open the entire market to crypto payments, Dash enjoys a high price because it caters to a slightly blacker market: the dark web. Though it also includes those who put a premium on their anonymity, the ability to further obscure one’s identity when purchasing goods or services on The Onion Router (TOR) browser is almost priceless. This is probably because the items for sale here are often illicit in some way though not exclusively.
A more thoroughly anonymous coin than bitcoin, due to its autonomous coin-mixing protocol some term ‘tumbling’, Dash makes it near impossible to figure out the identity of any single sender or recipient, even given their exact transaction details. Thanks to its decentralized architecture, blockchain crosses boundaries and borders without a second thought, and can therefore assign transactional value to any service with even a tiny amount of demand.
Designing Invulnerable Cryptocurrency Services
Cryptocurrency services that have gotten the recipe right make their platforms accessible, don’t peg their coins to fiat markets, and efficiently recycle value. By building a successfully enclosed ecosystem that derives value from participation, the motives behind decentralized businesses are much more transparent for all users. Furthermore, solutions akin to those mentioned above don’t need to worry much about regulation or competition in the traditional sense, because they’ve followed the path to true decentralization in the same vein as bitcoin. With a sustainable model that acts like a tide, in that it lifts all ships (not just a few), blockchain innovators are already proving the worth of this new model to users around the globe.