Everyone keeps asking when will cryptocurrency reach mass adoption?
The answer to this seems rather evident. It will get to that point when businesses incorporate it into their operations. Until that time, we are not going to see much happening outside the few (relatively speaking) speculators and early adopters.
Most still view cryptocurrency is nothing more than an asset to buy and sell. People are still indoctrinated into Lambos and mooning.
For the masses to be reached, this has to change. In this article we will discuss how this process will look.
Utility Tokens
One of the major keys is going to be utility tokens.
Before getting into this, we have to distinguish between value capture tokens (or equity) and this.
Utility tokens are not designed to be speculated upon. They are not there to capture the value created by the platform or network. Instead, they are tools for incentivization that are built into the business model. It is a way to enhance what is already taking place within that entities operations.
There are two keys here:
The first is to get people to do what you want. That means incentivizing them. Utility tokens are ideal for this since it is a way to reward them for the behavior that is desired.
Another is the fact there is a business model. We see a lot of cryptocurrency projects that have no business plan at all. Actually, when you look at them, what are they trying to accomplish? It appears as if people believed in tossing up a website and adding a token all that is required.
It is why we see so many failures.
Rewarding Customers or Users
The main focus here is to reward the people who are taking action that enhances the business (or platform).
As the name denotes, establishing a rewards program is ideal. This can be modeled similar to other reward programs except with tokens. The transformation comes in the ability for trading on exchanges. Typical reward programs do not provide this option.
What happens is the rewards program is monetized. If customers can cash out on the secondary market, there is incentive to amass rewards. All things being equal, people will choose the option where they receive additional benefit.
Of course, the rewards have a primary use: to purchase goods or services within the business.
These tokens can actually be used for access also. For example, an airline might require a certain amount of tokens gives you gold membership for a specific period of time. This helps to increase the desire for the token while also maintaining some stability.
Marketing Feature
One example of a utility token is CANDIES. This is earned daily by people going to the site and clicking to claim their tokens. It is designed to get people there each day, with a penalty for missing on. Obviously, this helps the traffic to the site.
These are not traded on exchanges. It is an in-house token that can be redeemed for digital products offered. Nevertheless, even without the secondary market, it does exemplify a point.
We can see these are marketing tools. They can incentivize people to show up and take a specific action. What if we want to have people aid in marketing of the business or service by tokenizing the marketing.
The major advantage is this can garner results without having to pay money from the revenues of the company. Instead, tokens are distributed as a means of payment.
For years I thought this an ideal solution for a company like Tesla. What if, each time someone made a video or wrote an article about the company, it would be tokenized. This could allow for massive distribution while expanding the stakeholders the entity has.
With a secondary market established, people could then use those tokens for the products themselves or for other features. One idea is that holding enough tokens allows one to have a product like FSD turn on for the month.
Incentivize Every Aspect
Imagine if a company or platform sough to do this throughout all aspects. No matter what the action, there was incentive.
To start, the mindset shifts to another level. Now, a project team looks at creating as many incentives as possible. In other words, the goal is to have rewards going out for everything. Regardless of what is done on the platform or within the business, people are getting rewarded.
This shows how much they are appreciated and promotes the idea of doing more. If someone gets paid for putting out an X for Tesla, the incentive might be there to do 10 more.
Another is that it allows for tiered systems.
Gong back the access, everyone wants to be a part of something "exclusive". It is what separates people and helps to feed the ego in many instances. Tokenization in this form allows enterprises to creates these tiers.
By amassing a certain amount, one can access a portion of the business previous off limits. For example, if you have enough tokens, you might end up in the Starbucks gold club. That could come with a host of benefits the common coffee drinkers doesn't get.
Of course, this takes on an entirely new meaning when we look at digital platforms. The expansiveness of that domain shows how limitation is only in imagination.
Wide Distribution
The final key to this is to get the token distributed as widely as possible. Here is where the traditional mindset within cryptocurrency is flawed.
Most projects have participant who gave themselves huge stakes and want to control the entire process. The challenge here is the number of stakeholders is reduced. Network effects are not achieved through constraint. Instead, the goal is to distribute the token to incorporate as many stakeholders as possible.
Ironically, this can be a subset within a larger framework. For example, a digital platform could have a utility token that incentivized activity while also having a value capture token which is designed to rise along with the value created. The utility token is a way to attract (and retain) more users.
Have we seen this taking place yet? Why not? Isn't that some food for thought?
Much of the digital world is "winner take most". To excel, one needs to be more creative than the rest.
My conclusion is the winners are going to be those platforms that incentivize every aspect of their enterprise. This is not only going to hold true in the digital world. This is going to become commonplace within all of business.
Business owners who adopt this mindset could get a jump on their competition.
It is also something that all within Web3 need to take a look at.
Posted Using LeoFinance Alpha
