Why Dapps are the real investment
If you are investing in cryptocurrency, you probably spend a lot of time researching tokens. What you may not realize is you’re not comparing the tokens themselves, but rather the virtue of their utility. Utility mean use in the real world. The utility of this token is determined by the Decentralised Application with which it is associated.
If you find yourself asking what is a Dapp, you are not alone. Most articles discussing altcoins and their value never mention Dapps directly. The token is what you are purchasing and can be directly viewed as the investment. However, the token on its own has no value. It is not a physical entity, rather it is lines of code on the blockchain. One could liken the development of the blockchain and the cryptocurrency ecosystem to the development of the internet. Those who built the blockchain and those who work for cryptocurrency projects have a keen understanding of how it works and what creates value in this new tokenized economy. The rest of the world is playing catch up and for those of us who are not early adopters, we see are just now beginning to fully understand the value of the new economy we are starting to participate in.
So what is exactly is a Dapp and how does it give the token its value? Dapp is short for decentralized app. It is a platform that houses different tokens. Every application that is built on the blockchain and involved in cryptocurrency transactions is a Dapp. I liken the development of the blockchain to that of the internet because it is its own entity and a new form of connecting the world. However, Dapps from a user experience perspective are just like web-based platforms. They vary across the spectrum from business and financial applications to consumer-based platforms.
Blockchain technology uses different database technology. In the highest level of overview, the difference is simply that the blockchain allows applications to use decentralized nodes rather than one specific server. In a traditional setting, these servers are securely managed by a company that controls them, which means they cannot be verified by the public. By using decentralization, the actions taken on the blockchain can be verified by anyone who understands how the code works. This means that rather than blocking access for security, security is built through transparency. The blockchain is designed so that additional blocks can be added while previous ones cannot be erased. The result is that users of the blockchain and cryptocurrency can be assured of the integrity of the data and they can manage their own data.
This transparency has fostered consumer trust which has allowed cryptocurrencies to develop value. Think of tokens or coins in the same way you think of FIAT. The value of FIAT is tied to the trust in the economic and political stability of the countries they are tied to. If the US economy or political system were to collapse so would the dollar. The value of a token is based on initially on trust as well but rather than trust in a country or specific economy, we trust in the product the company is building.
This is why the Dapp is the real investment. For a cryptocurrency to have real sustained value a company has to produce a real product. The projects that will last are those that have strong Dapps that provide real value to consumers or businesses. This is true for all tokens, and especially for utility tokens.
A utility token, unlike an equity token, does not allow you to buy into a company but rather allows you to access services within the app. The value of the token is derived from the value of the services provided. For example, the $CAN token is a utility token that allows you to pay for services within the CanYa app.
At CanYa they designed their app to allow members to provide each other with real services. We chose to move to the blockchain because of the value this will provide our members with. The inherent security and trust built into the blockchain are ideal for transactions in the gig economy. By having a token that is easy for our members to use to pay for services globally, we simplify the process. The services that members provide on the platform are why our token have value. We are provided a real product that fills a need, which is what $CAN HODLrs have invested in.
With utility tokens such as $CAN there is a clarity as to what you are receiving. 2018 will see the continued rise of new cryptocurrency projects; some will succeed and others will not. When selecting tokens to hold, look at the Dapp. A strong Dapp means a coin or token with real potential and ultimately real value.
