MEDIA Protocol And The Future Of Blockchain — Part 3
The team here at MEDIA Protocol are deeply committed to creating a more direct, transparent and secure ecosystem for content creators, publishers, and consumers through the revolutionary application of blockchain technology. In fact, it’s the very revolutionary nature of the technology that really excites us.
We’d like to share our thoughts about blockchain technology and how we see it progressing into the future, hopefully demystifying and clarifying some of the misconceptions that currently exist about blockchain and its applications. We want to help create a common understanding of the technology for everyone’s benefit.
This series of articles aims to explore developments within blockchain technology, the relationship between institutional investors and blockchain, and the move towards regulation within the space. We want to help everyone — the marketeers, the technologists, and the content consumers — understand the potential for this game-changing technology.
Strap in, and welcome to the MEDIA Protocol Future Of Blockchain Series.
Part 3 — Why Aren’t Tokens Mainstream?
Blockchain technology is still in its relative infancy. New applications are being conceived daily, disrupting many long-established industries and reshaping the way that people think about, interact with and envision the future of business and the exchange of data.
But, as with any new technology, there’s a process of testing, exploring use cases and continued trial and error before it can reach the point of mainstream mass adoption. Essentially, until there are well-documented and effective proofs of concept, user-friendly applications that address or improve current established practices, and the security and stability in the infrastructure that breeds confidence across the wider market, the layman will remain skeptical.
Cryptocurrencies Versus Tokens
Cryptocurrencies are used to make or receive payments on the blockchain, whereas utility tokens are used by blockchain-based projects within their own ecosystem. Utility tokens aren’t intended to serve as digital currency for multiple purposes. Instead, they are used to drive and interact with features built within a specific project’s infrastructure — think Disney Dollars, only useable at Disney resorts in exchange for products or services within that system of companies.
From the perspective of a crypto project, tokens represent a predetermined specific (finite) amount of digital resources which are under their control. These are then reassigned (distributed or sold) to individuals participating within that company’s ICO to enable them to interact with the various features of the project’s ecosystem.
In many instances, projects use tokens primarily as a source of crowdfunding, as well as to enable certain roadmap and community-creation targets to be met by rewarding users’ positive behaviours or interactions with that project.
Similar to the way that cryptocurrencies work, tokens are also tradeable. Smart contracts make it possible to exchange tokens and currencies on the blockchain in a transparent, conflict-free way while avoiding the services of a middleman. At the same time, tokens are also different to cryptocurrencies, considering that their value, in fact, is derived from what they represent, such as feature accessibility, company equity or access to a service.
‘Tokens are a representation of a particular asset or utility […] Tokens can represent basically any assets that are fungible and tradeable’ Master the Crypto
Currently, there are at least three distinct types of tokens available in the blockchain including security, equity and utility tokens.
The Concern With User Security
In order for cryptocurrencies and tokens to take off at a global level, there are many regulations and security measures that need to be put in place. These will help achieve consumer confidence, investor protection and transparency.
Institutional investors are showing some initial interest, as the adoption of cryptocurrencies continues to gain more traction on an international level. Yet, there are still some security and regulatory measures that are slowing down this adoption process.
Blockchain offers a far more secure structure than a centralised database. However, when it comes to exchanging values, security is still a pressing concern for users because the current infrastructure for potential investors is not considered astonishingly safe. The concern is mainly to do with the purchase of the asset itself, but also with the safe custody of the asset after the transaction has been completed.
Personal security is truly the weak link here. With blockchain, the user is entirely responsible for the security of their wallet, private keys, and other financial assets. If their own personal security is exposed or leaked, then it opens the door for hackers.
Custody of assets will be covered in a later article within this series.
Tokenisation In Everyday Life
At its most simple level, tokenisation can be seen as a rewards system where certain behaviours, actions and interactions are rewarded with an item of value — the token.
Outside of the blockchain, we can already see how earning “tokens” in exchange for an interaction is a strong marketing ploy used by a great number of companies. For example, many credit card institutions and retailers may reward you with “cash back” points every time you use their card as a payment method.
The blockchain will allow companies and marketers to take this approach a step further by more effectively keeping track of a user’s interactions, allowing a more tailored approach to the offer of rewards and tokens.
MEDIA Tokens And The Future Of Content Marketing
MEDIA Protocol decentralises the current content model, pulling away from the third-party platforms that control who and what we see. This content model puts the power back in the hands of publishers, content creators, advertisers, and the content consumers themselves.
The use of MEDIA Tokens (MPT) attached to a piece of content, incentivises interactions between content creator and consumer by rewarding the consumer with tokens for interacting with valuable content and even sharing it with their network.
This direct two-way flow of data and value returns the power to the people who matter the most in the content exchange — the producer and the consumer.
The benefit for the creator lies in real people, who really engage and interact with the content being published, because they see a value in it that they feel is worth sharing with their network. For the consumer, the incentive is receiving targeted, specific content that the data they provide suggests they enjoy, with the potential added bonus of earning tokens that can be used in exchange for access to even more of the content they love. And so the value cycle is perpetuated.
Looking Into The Future
Every new technology takes its time to develop and society will always need time to adapt to it. Every piece of technology that today seems like second nature, took people a while to get used to. Facebook, for example, was initially created just for college students, then eventually started welcoming users from every age, and the rest is history.
Tokenisation has the potential to remove the middleman, which would result in an infinite number of benefits for the user. Blockchain reduces cost and time with the frictionless passporting of transactions across global frontiers. It also adds transparency and security.
Over time, as regulatory frameworks are developed and barriers to entry are removed or simplified, mass adoption by institutional investors and the wider population seems inevitable.
Read All Parts In Our Future Of Blockchain Series
Part 1 — What Is Blockchain?
Part 2 — What Does The Future Hold For Blockchain Technology?
Part 3 — Why Aren’t Tokens Mainstream? (This article above)
Part 4 — Investing In The Future (Coming Soon)
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