How to give value to coins?

If you issue a coin, how do you make it valuable?

The value of Bitcoin comes from the network effect, that is, once many people recognize Bitcoin, Bitcoin can be used as currency. The more people recognize it, the easier it is to use the currency, and the higher its value.

Most coins want to copy the successful model of Bitcoin. Many coins, even if they are just tokens, will try to airdrop when they are first issued. Many split coins come with an airdrop when they are born. Some ICOs are extremely cheap, just to give them to those who recognize their value early on. These are all hoping to earn back the money by forming a network effect in the future.

In order to have a network effect, you don’t even need a chain. If you issue a token on a public chain, as long as enough people recognize it, there will be a network effect.

Bitcoin cultists look down on all other currencies, including refusing to buy Ethereum, until a project gives them some Ethereum tokens for free. Then they find that after I deposit the tokens to the exchange to sell them, I still have to buy ETH as fuel, even if it is just a little bit.

This is the second way to give value to coins: add business to them.

Any user who wants to use the Ethereum network, send a token, run a smart contract, or store some information needs to use Ether as fuel. In addition, Ether itself is scarce, so you can’t just get it if you want it, and it can’t create value.

Just like a car needs to burn oil to run, and oil has value. If you issue a coin and you have a business that others want to engage in or play that must use this coin, then this coin will have value.

Usefulness and scarcity can create value. Air is useful, but because it is not scarce, it is difficult to create value.

Common businesses in the cryptocurrency world include: issuing transactions requires mining fees; running smart contracts requires coins as fuel; PoS mining requires holding coins; the exchange's platform coins can be used to offset handling fees; and playing blockchain games requires the consumption of some kind of blockchain game public chain coins.

You can also load in some special businesses, for example, you open a store that accepts a certain currency as a means of payment, or you open a certain service that only accepts purchases from a certain currency.

Finally, the benefits and dividends are given cleanly and neatly.

One of the reasons why stocks are valuable is because of dividends, which are the company's dividends. Bonds are valuable because of the principal equity and interest.

In the past, the platform coins of the exchange could directly receive platform dividends. I used to hold some OKBs, which had Super Friday dividends and could receive coins every Friday. If you can receive dividends, this basic coin will have value.

Buyback and destruction is a special type of dividend that is distributed directly by raising the price in the secondary market.

Airdrops can also be considered as a kind of dividend, and can also give value to the airdropped coins.

That seems to be all.

As an investor, you can also use this to reversely infer whether you have purchased a valuable coin.

<<: There are 41 days left until the Bitcoin halving. Let’s revisit its impact

>>: Decentralized trading platform transaction volume reached US$668 million in March, setting a new record

What does the mole on the husband mean? Is the mole on the husband good or bad?

Qwertycoin - QWC coin for short, Monero's new virtual currency, how fast do you want to mine and make money! Mining tutorial!

Cryptocurrency

What kind of people are the most impetuous and irritable?

How to give value to coins?

What does the mole on the husband mean? Is the mole on the husband good or bad?

Low IQ, stupid face, sparse teeth

Facial wrinkles that can bring bad luck

Qwertycoin - QWC coin for short, Monero's new virtual currency, how fast do you want to mine and make money! Mining tutorial!

What kind of people are the most impetuous and irritable?

The fate of women with Sichuan lines on their hands

Analysis of facial features that are likely to betray women: which men love to cheat

Analysis of the face of a woman with a bulbous nose

The face of a man with a heart that is separated from his belly

How to tell love luck from face reading How does a person with good love luck look like?

Recommend

Ethereum Series (11): Ethereum Account Management

The Lightning Network is great, but it also faces various types of problems

Explain the face of a woman with high cheekbones. What is the fate of a woman with high cheekbones?

Men who have better luck with women as they get older

Which men are best at making money from women?

Social blogging platform AKASHA will release an Alpha test version soon

A brief discussion on Ethereum’s “bubble” and “investment potential”

Is Bitcoin expensive now? Mining cost analysis

Where is the spouse palace? How to read the spouse palace?

Why has the issuance of digital currency by central banks become a global trend?

What are the special moles on the back of the neck? What's the saying?

The face of a woman with great ability to attract money

Men with these palm lines are prone to losing money and being burdened by money all their lives

Popular Science | Improving the ETH 2.0 Validator Experience with Key Splitting

Bitcoin Mining: A Father-Son Family Business