The State of Utility Tokens

The token economy is flourishing. After a breakout year in 2017, the number of tokenized decentralized software applications has grown exponentially, building the foundation for the next generation of the digital economy. Further progress is not guaranteed. In fact, the future of token-based innovation within the United States depends largely upon the upcoming decisions by US regulatory bodies.

Why Use Utility Tokens?

A common critique of utility tokens is to propose that distributed applications simply build their software around store of value tokens like Bitcoin or Ether, instead of developing an entirely new token. When a distributed application uses a token like #Bitcoin, it does inherit the token’s utility (high security), but it also inherits its constraints (high transaction fees, long block time). This is why it is so important for competitive distributed software applications to build their own native token, so that they may maximize the utility function that their token enables.

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