Recently, experts including Coinbase co-founder Fred Ehrsam spoke of the importance of app coins and their potential to change the mechanisms of conventional and traditional businesses and operations. However, many members of the cryptocurrency and Bitcoin communities criticize the existence of app coins, questioning their legitimacy and real market values. The emergence of Steem and other multi-million dollar altcoins in the market have triggered a massive resurgence of app coins, or crypto assets utilized by decentralized platforms as their native forms of payment. Some developers and companies have created business models entirely based on app coins, with operations and governance heavily reliant on the performance of its built-in crypto assets. Unique decentralized environments and financial networks Over the past few years, platforms like Storj and Steem have attracted interest from cryptocurrency users and investors due to their unique operations and services based on crypto assets. Steemit for instance, enables users to incentivize content providers and creators with its built-in app coin called Steem, which is now worth around US$165 million. This feature and ability of app coins which allow businesses to establish their own unique decentralized environments and financial networks have been praised by some experts including Ehrsam. Ehrsam wrote in a blog post: “It is projects creating their own economic ecosystems to make the entire thing tick. More precisely, it is about an entirely new business model that is being created and tried for the first time: a decentralized business model.” Ponzi schemes? In contrary, many members of the cryptocurrency community and industry have called out app coins like Steem for mimicking the models of ponzi schemes that are often built to raise money from investors but provide very little financial benefits to its users. Tuur Demeester , economist and Editor in Chief at Adamant Research voiced his […]
