2/ The argument “well, ERC20 tokens can be used in decentralized smart contracts, so you don’t have to trust anyone” doesn’t fly, since most if not all of these contracts must inevitably interact with centralized solutions anyway. A.k.a. the Oracle problem.
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3/ If your token has a fixed supply, your users will always face higher liquidity & volatility risks than using BTC. Since the demand & market for sound money (which encompasses all types of services) will *always* be larger than the demand & market for any single service.
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4/ If your token has a variable supply or pegged to some stablecoin, then it’s just a needless layer of indirection.
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5/ I'm a big fan of
@balajis, but I think the argument that buying tokens is akin to buying "paid API keys" to services, and therefore tokens have inherent utility is not quite correct (from https://news.earn.com/thoughts-on-tokens-436109aabcbe …).Show this thread -
6/ A private key has no value *in and of itself*. It can only have value if the thing it protects has value. In the case of company-issued tokens, that hinges on the company actually providing a service & making good on their promises.
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7/ The company can shut down their service, disappear tomorrow, and your paid API keys would amount to nothing. This can happen to Bitcoin too, but you’ll have to shut down the entire Bitcoin network- much harder to do.
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8/ So no, I don’t think ERC20 tokens are “inherently useful”.
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9/ More on token-asset linkage:https://twitter.com/hugohanoi/status/976601253634387970 …
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"I never understood why companies cannot build so-called "tokenized services" directly on top of established tokens such as BTC" Please read the attached picture..
#OST$OST http://ost.com pic.twitter.com/9C71sRJJIP
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Nope, still does not make any sense. All reasons you listed are benefits for the companies & creators themselves, not for the end users. Utility tokens actually hurt the end users, and do not solve a real problem.https://twitter.com/hugohanoi/status/976601253634387970 …
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There are clear benefits for consumers as well..
#OST$OSTpic.twitter.com/rALs6DutFz
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1, 2 & 4 are essentially rehashing the same argument & no, that doesn't explain how adding friction in the form of multiple tokens help the users. Having multiple types of currencies/credit cards/airline point systems is an inefficiency, not something to be proud about.
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3 is simply not true. The tokens lose all value if the airlines drop support for them or go under. Ownership of token != ownership of asset (in this case, real flight mileage).
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If you could use your failed airline/ droped tokens into another airline program, service or just convert it to fiat/crypto then problem solved?
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you're assuming you can exchange the failed tokens for a good price? who would be the buyers of these failed tokens when you want to sell?
the moment they fail, their price on the market would immediately drop to zero. -
But that is the point.. if a business that has tokens made with OST fails, the tokens can always be swapped for OST (with use of the OST Wallet, no hassle with exchanges for consumers) to get their value back. This can then be spent at any OST based economy elsehwere.
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I love how you fleshed this out!!
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thanks Max, nice talk today :-)
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To further elaborate, I reffer to: https://medium.com/@glen_hendriks/ost-explained-684938740e98 …
#OST$OSTThanks. Twitter will use this to make your timeline better. UndoUndo
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Agreed. I wrote something similar before, you might wanna check it outhttps://eugenetham.com/2018/02/27/do-all-blockchain-projects-really-need-their-own-token/ …
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