ICONOMI: Token, Usage Over Utility

Unfortunately, my views of Iconomi have been re-aligned and the below of no longer represents the active company that stands. I am leaving this up for clerical purposes, but I no longer hold ICN due to the change to the eICN token. I believe releasing a shareholding-based assets in replace of $ICN, with little voting power is a disingenuous way to treat long-term holders.

Let’s get real; the cryptocurrency community is a financially immature bunch where high yielded gains favour the brave, not necessarily the smart. Time and time again I see countless Reddit posts, somewhat similar too;

“I just invested $5,000, how and why does this token do this? I don’t understand why they are doing this, this and this instead of that, that and that.”

This always amazes me — as a lot of people are investing blindly in this space because of what other Redditors say, and in most subreddits/slack, we call this FOMO or hype.

I believe cryptocurrencies have begun a new era in challenging the accredited investor. Investing a small fortune on your own wasn’t available 5–10 years ago, and now, thanks to eToro, Plus500, Coinbase, ICONOMI and many others, we’re able to be in control of the investments we make to enrich our financial future.

Iconomi.net allows the everyday investor to join the crypto currency revolution, but if you’re investing in a Digital Asset Array’s (DAA’s) then you’re not buying ICN which is; ICONOMI’s token.

So, for those looking to learn more about what the ICONOMI project has to offer in the coming months it makes sense to understand the token’s utility and how it collects it’s value. I’m going to try and capture some of ICONOMI’s commonly asked questions regarding utility along with a viable outlook for the future.

Buybacks — and how this benefits token holders?

Everyone who holds ICN benefits from buybacks in relation to ICONOMI’s AUM. Assets Under Management, in my opinion represent the true incentive for holding ICN, sometimes it’s difficult to understand why and how this creates value.

A traditional well-known buyback (also known as a repurchase), is the purchase by a company of its outstanding shares that reduces the number of its shares on the open market. This creates upward buying pressure and increases the value of your shares that are held by you. In this case, it’s an ERC-20 token, not shares.

ICONOMI’s original vision was a dividend structure, but due to worldwide regulations, it’s almost near-impossible to offer a realistic dividend structure to accompany the masses. A full list of the crazy amount of dividend tax regulations around the world can be found here, no seriously, look. This is another reason why ICONOMI should be praised for initiating buybacks. It’s a genius way to accumulate wealth for investors without the regulation headache.

Buybacks are a genius way to accumulate wealth for investors.

Why usage always beats utility

The team are set to release the usage of the ICN Token over the coming months, which unfortunately throughout this quiet period has somehow invited some fear, uncertainty and doubt. Some crypto-enthusiasts seem to think that a token with no current utility automatically grants a lower value, and I believe that they’re wrong. I’m aware that utility does add value, but token usage always beats utility.

I sometimes see comments on reddit from investors who may not understand token value or speculative value in some instances when mixed with the rate of adoption.

The most common reply I see from time to time is just this;

yeh, but no utility = no value

Unfortunately they’re not understanding the deeper meaning of utility, which is that it requires a state of usefulness (usage);

Utility is the state of being useful (usage), profitable and/or beneficial.

The word utility is thrown around a lot in Crytpo, but the word, usage, not-so-much, and I repeat; usage always beats utility, but lets find out why.

The average investor holds multiple tokens as part of a varied portfolio, and you hope that it increases in value over time. It’s obvious that the more a token is used, the more it should increase in value. After all, if the rate of adoption for Blockchain is a resemblance of the dotcom boom then we will all be happy, right? Well, not always.

Ethereum, is a brilliant example due to it’s size of market capitalisation, relatively open investor base and the fact that many reading this probably hold Ether. You’re waiting for your Ethereum to increase in value, but for it to truly reach it’s potential (and I mean thousands or tens of thousands per coin), it requires consistent usage. Meaning, that it’s value isn’t drawn from holders, it’s drawn from the smart contracts in operation, the more valuable the crpyto/network becomes. Unfortunately, An influx of hodlers won’t create that true life-changing gain that you’re waiting for, it’s the adoption of developers and companies using it’s smart-contracts that will set the price free.

Just because something can be used doesn’t mean it’s worth more than something that cannot. This is why usage will always beat utility.

Usage (not utility) plays an important part in price speculation and it’s exciting to think that ICN’s token-utility will be disclosed in the coming months, and more importantly, when the token utility has been resolved, it will almost have an immediate usage.

What will the ‘ICN’ utility be?

The team have expressed in September’s AMA that it may be one or all of the following use-cases required for using ICN:

• Being used to stake DAA creation
• Exclusive access to premium services on the platform when using ICN
• Tokenizing DAAs may require ICN
• ICN holders being able to invest in ICOs

The team will look to fully define the utility of ICN once DAAs have been launched, as well as considering ideas from the ICONOMI community but it’s hard for them to specify at this stage as it’s important for them to concentrate on their current milestones, which are; make it possible for users to create and test their own DAAs; make the platform and DAAs available to everyone; fiat gateway for direct entry with fiat money.

As and when this usage is implemented, it carries immediate value and creates a supply and demand for something that can be utilised and most importantly, used as of the date of injection.

There are many tokens that have utility, and zero usage, making it a very dangerous game to be a part of.

I’m very much looking forward to the release of; full platform (private DAA’s), ICN Token utility, fiat gateway and then the Irish Stock exchange listing — so there sure is plenty to look forward too.

Once (or twice) again — Thanks for listening to my meandering thoughts.