Utility Tokens Are Dead, STOs Are The Future! Are You Sure?
I’m sure those of you who follow closely the cryptocurrency market and take advantage of the investment opportunities it offers not only in terms of acquiring Bitcoin but also participating in Initial Coin or Token Offerings have heard the word on the street:
Utility tokens are dead, security tokens are the new thing. ICO’s are old news, STOs are the future or something in between those lines.
While these statements are partially true, if you’re trying to figure out where should you invest the next $100 you can spare of your paycheck there is a lot more information that needs to be taken into consideration.
Obviously, I’m approaching the regular people, the retail investors and not the big sharks that dance with Crypto Funds and Venture Capitalists. I don’t believe any of them will need my advice or will read my content in a first place.
So, let’s get back to the point.
Security Token Offerings (STO) are getting a lot of attention on media, but due to the lack of clear regulations the new wave of ICO 2.0 like some refer to the STOs is still not a fact. But regulations will come soon or later and according to the media all the big money will start flowing towards well presented start ups offering Security tokens in exchange of equity and dividends.
OK, what’s the problem some of you may ask? Many investors would prefer to get passive income on a monthly or annual basis instead of waiting for a token to grow in value, so they can make a one-time profitable trade.
The problems ladies and gents are:
1. Most of those start ups offering STOs will have nothing to do with the blockchain technology and only use it to create those tokens and pay the dividends to their investors, which doesn’t really help the evolution and adoption of this innovative technology.
2. With all the big boys and their money coming in, who do you think is going to acquire the tokens offered by startups who have a chance to build a profitable business? All good concepts will sell their tokens privately and only the startups with low or no potential will reach the public.
Initial Coin Offerings were meant to be a crowdfunding alternative for teams that develop projects on the blockchain and to give a chance to anybody who wants to participate in this decentralized market even with as little as $50 rather than send all the wealth to those who are already wealthy.
On the other hand, I totally agree that 99% of the utility tokens created are completely useless, and their only purposes was to get the money of the uneducated participants on this young unregulated market. Many of these tokens died already and the rest will be buried soon even if they are already traded on exchanges.
But utility tokens are not dead and here is why:
1. Utility tokens with real use cases that will circulate in growing ecosystems and have various functionalities like providing access to services or recording data will always be part of the blockchain and the projects that utilize it for the right reasons.
2. Utility tokens will be the only chance for the average person to participate on this market, invest his hundred bucks every month and secure their future or start building their wealth, which isn’t possible with most financial products available for the retail investors.
