Why does blockchain need tokens (why do people still play the blockchain money game)?
Why does blockchain need tokens? Why does blockchain need tokens? In the early
Why does blockchain need tokens? Why does blockchain need tokens?
In the early days of the internet, we began to have concepts of information and value. But now, with the development and popularity of the internet, people have realized that data has become a new asset class. However, due to a lack of reliable sources of information, many people believe that this technology cannot meet the current market demand. This has led to a change in this situation. Nowadays, there are many token-based economic incentive mechanisms in the blockchain industry, such as cryptocurrencies like Bitcoin, which are designed to attract more users to participate and receive corresponding rewards.
From an economic perspective, these economic incentives need to be achieved through tokens. However, in order to commercialize applications, there must be a token that is indivisible and cannot be split.
When we consider that everyone has their own unique identity in the digital world, there are many ways to make this world smaller and more influential. Because it is not only a platform, but also a part of the entire ecosystem, anyone using blockchain or other distributed ledger technologies will face significant challenges. So how can we invest all funds into blockchain? This is why it is necessary to issue our own token.
Why does blockchain have tokens? It is because blockchain, as a decentralized database structure, makes its operation more transparent and has completely different attributes. At the same time, tokens on the blockchain can also be combined with traditional database systems to play a role.
For example, digital currencies like Bitcoin are composed of a unit of account or reserve issued by a central bank, which allows them to maintain high consistency in transactions and avoid losses due to recording errors. In addition, the cost of each payment can be set according to customer requirements.
Ethereum, on the other hand, does not have this functionality and is only used to store data on the Ethereum blockchain, also known as “smart contracts”. Therefore, developers can generate and maintain a token through code, creating various types of new tokens.
For some blockchain projects, although their business models are very simple, there may be limitations in their specific execution: they want to create a token based on their capabilities and send it to specific individuals (i.e., nodes). These organizations usually do not want to publicly state the transfer of tokens to someone else’s account and the owner of that address.
In addition, some blockchain companies are also trying to introduce tokens to solve this problem. For example, Ripple Labs has proposed token standards. Currently, there are no plans to launch such stablecoins. R3 has established its own ERC-20 token standard and provided it to the public before the mainnet launch, establishing a global token standard.
However, blockchain still has a lot of room for development – to establish a trusted network without the need for supervision from third-party institutions, rather than relying solely on centralized intermediaries.
Why do people still play the blockchain money game?
Editor’s Note: This article is from the “Plain Language Blockchain” (ID: hellobtc) and was written by Sanli, authorized for repost by Odaily Planet Daily.
Recently, I read an article titled “You think you’ve made money?” to express my own opinions. I believe that many people cannot understand this sentence, but I think this article is real! After all, has the cryptocurrency market really made money? And there are still people playing in it! But to be honest, there are indeed many scammers and MLM projects in the cryptocurrency market. They are the “harvesters” of the “leeks”. These so-called scams have appeared as early as last December, for example, a company ran away and transferred the money to a big account. So why do we still want to launch ICO projects? Because these projects are all air coins, MLM coins, or even air coins, and the behaviors targeted by regulatory agencies may not have any reference value.
Today I will analyze briefly why there are still many people struggling in the cryptocurrency market. From an investment perspective, there is basically no need to mine for the sake of speculation. Because many investors are not paying much attention to this industry or think it is very lively, so they will not do such things to participate, but will continue to invest more funds. However, in fact, the players who have actually entered this industry are not a few, most of them are struggling in this field, just trying to attract everyone to participate through speculation, rather than using a certain way of soliciting investment like before. That is to say, this process has no practical significance, but has become a new leader.
So for such an outsider, it is not just a simple minority group, but also an intangible existence, which is a very surprising thing. Of course, if you carefully study the token issuance models currently on the market, you will find that some projects can raise a large amount of funds without even issuing coins and have no practical use. And once you know what a product is like, your perception will change greatly. When the price goes up, people cannot judge whether the market is at zero, and various speculations and arbitrage behaviors will appear again.
And it is very difficult for ordinary people to understand how many people in the real blockchain world can manipulate transactions on the entire chain to make profits and can monitor and warn key nodes in real time. This is a problem that ordinary people have to face – that is, the current situation of raising funds in the blockchain, are there still so many people making money? Let’s review the previous cases first. Bitcoin was born in 2014. At that time, the Ethereum network could only process 10 transactions per second, although it was inefficient, it could still achieve 10 billion transactions, far exceeding traditional internet platforms.
With the passage of time, the development of cryptocurrencies has grown exponentially and constantly breaks through unprecedented bottlenecks. Bitcoin is now at its all-time high. Since the end of 2018, its total market value has soared above $1 trillion; while other mainstream altcoins have fallen successively, with a decline of more than 60%; the first half of this year has also reached new highs.
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