It is often said that no one knows tomorrow, but when it comes to the cryptocurrency and blockchain industry markets, no one really knows what’s going to happen in the next quarter hour, not to talk of tomorrow! Volatility, rollercoaster rides, sudden jumps up and down, you name it, is what anyone who has any interest in dealing with the crypto industry must be ready to deal with. There are crypto assets that crash then suddenly come back stronger, while others are not as lucky as when they crash, they never see the light of day again. Upon close observation, one could see that a pattern is starting to develop in the blockchain universe, as experts believe that utility tokens rather than cryptocurrencies are what will bear the worst of the volatility and unpredictability of the markets till it reaches its sound footing.
So why is this belief solidifying? Some of the main reasons why industry watchers believe that utility tokens will be ultimately resilient over the course of time include:
- Product Backing: Utility tokens, unlike coins, are not standalone digital assets whose idea of value is derived solely from the perception of its adopters, positive or negative. A Coin is a digital asset whose credibility or lack of is not hedged against any tangible real-world solution other than the fact that a group of people decided they will use it as a measure of an exchange of value. This is one f the main reasons the crypto industry gets attacked by banks as well as other naysayers. When it comes to utility tokens, however, these digital assets are already enclosed in an ecosystem that has a certain viable product in circulation. This product is what stands as the value of the measure of the token, as such the value or lack of, for that token gets dictated by the quality of service people get from using that token.
- Imminent Crackdown: The crypto industry has never been on the best of terms with authorities, banks, and governments all over the world. There has always been this overshadowing threat of a crackdown on the industry. Despite the hate relationship of authorities with the crypto industry, there is a universal acknowledgment that it is virtual money that aims to replace fiat that authorities have a major grouse with and not with the underlying blockchain technology, which many governments have been trying to develop a use for. As such this threat of crackdown can be said to be centered most vehemently on the lies of Bitcoin, Litecoin as well as other dedicated digital currencies, rather than utility tokens that are focused in the exchange of value within their own ecosystems.
- Uniqueness: Bitcoin might have pioneered the very idea of a digital currency, but as of present, there are literally hundreds of alternatives all purporting to have the same basic purpose to Bitcoin. With such repetition in use replicating itself over the crypto markets, users are often confused as to which asset to hold, as it is very likely that whatever asset they pick (other than Bitcoin, which has become too expensive) it is likely they might not be able to spend it seamlessly wherever they go. Utility tokens, however, are unique products, each operating in its own niche and serving as a bridge for a given product. These give them a level of uniqueness as a utility token used for ridesharing, for example, cannot replace that which is used to hire a freelance writer.
The debate is likely to continue on the future and ultimate survival of the crypto industry. But one thing is for certain, that the blockchain technology is here to stay whether authorities like it or not, and the most likely form it will linger on in the times ahead will be the utility tokens that open limitless possibilities that have never been present before.