2016 has been the year of app coins or digital assets by far, with the emergence of various unique blockchain-based platforms including Steem, Augur, and IPFS, and their independent crypto assets. These so-called “app coins” have begun to take some serious market share from the cryptocurrency market, as decentralized Reddit Steemit overtook the Ripple network to become the third largest cryptocurrency/asset in existence. Experts in the field of cryptocurrency have praised such decentralized software protocols that issue their own app coins because of their ability to provide users–specifically early users–equity of their networks. This incentive-based model of most blockchain-based decentralized protocols motivate users to contribute, ultimately leading to a more organic yet rapid scaling of the network. “More precisely, it [decentralized app coin-based protocol] is about an entirely new business model that is being created and tried for the first time: a decentralized business model. In this model there is no central controlling company, and has shared contributions and ownership by all involved,” explains Coinbase co-founder Fred Ehrsam. The merits of utilizing a network-specific app coin are clearly evident. App coins allow users to initiate actions on the network without having to deal with external transactions or settlements. Any settlement of offers, transactions, or contracts can be done within the network, with greater efficiency and optimization. However, relying on an app coin also creates a fundamental issue for users. A major problem behind the usage of a network-specific app coin is its real world value. An app coin is only as valuable as the network is to the market. Steemit for instance, offers users Steem which can be used to incentivize content on the network. The Steem app coin can be used seemlessly within the network but what real value does and can it posses? On cryptocurrency exchanges and […]
