Cryptocurrency. Isn’t that the bitdollar thing? Blockchain. Never heard of it.
This conversation is all too familiar if you have ever brought up the topic around your family dinner table. Sure, while studies show that 80% of Americans have heard of Bitcoin, how many truly understand it? How many know what it is beyond “internet money that made that teenager on the news a millionaire?”
Even among cryptocurrency enthusiasts, most people view cryptocurrency as more of a speculative investment product rather than as a means of exchange.
Because of this, 2018 became both the birth and death of utility tokens, cryptocurrencies that promised to provide viable working products in which the coins themselves had both a monetary value and use case within a platform. However, the majority of utility coin ICOs was merely a whitepaper and a dream idea and spent most of their financial backing on marketing a platform that never came to fruition. This caused even most of their ardent supporters to move onto security tokens or to keep their investments within the top 100 coins by market cap.
How I feel looking at some of my utility coin purchases.
So what caused this failure and how can we move beyond it to increase the actual adoption and usage of cryptocurrencies?
For cryptocurrency and blockchain technology to reach every day users, a blockchain-powered platform needs 3 main characteristics: familiarity to an average person, ability to earn tokens, and a valuable use case. Beyond my own personal opinion, I would like to say why our project Castweet (CTT) meets all 3 of these requirements through providing a live-streaming platform that can drive engagement.
Addressing issue one, what is more familiar around the world than live-streaming platforms?
Youtube boasts more than 1.5 billion monthly active viewers. Many viewers spend more than 4 hours a day watching their favorite streams, engaging with the live-streamer, and sharing the contents that they enjoy. When you are spending a large portion of your waking hours on a platform, familiarity is to be expected. In this way, the easiest way to reach the average person is to adopt blockchain and cryptocurrency into a live-streaming platform, creating an easy method to onboard new users.
Additionally, users should be able to participate on the platform without even knowning it is based on blockchain. Too often each new project overly pushes the blockchain aspect and, unsurprisingly, most of the users of the platform are interested in blockchain. This was clearly seen in Cosmochain's first foray into providing a cryptocurrency based cosmetic review and sharing application. The overlap between blockchain and cosmetic enthusiasts is a huge minority. However, within their first app Cosmee which touting blockchain based incentives for cosmetic reviews, the vast majority of the users were cryptocurrency holders who had never held a tube of lipstick in their hand.
While cryptocurrency enthusiasts can get interested in the TPS of a coin, the average person has no interest about the technological superiority of one over another.
Altcoins fighting with Bitcoin over superiority
For Castweet, we aim to provide a seamless live-streaming experience that a user of any of the current offerings would be familiar. From the UI to basic functionality, an average user can use Castweet and participate as if they had been on the platform for years. Using the established familiarity and adding in cryptocurrency will allow average users to get their first taste of the technology and holdings, without having to go through the daunting task of purchasing off of an exchange.
Issue 2: How can a utility coin provide an ability to earn tokens without ruining the Token Ecosystem?
Concerning issue number 2, there is a growing dissatisfaction among content creators with the current compensation models across broadcasting platforms. As it stands, monetization is not readily and directly available to most content creators on their broadcasting platform of choice. Youtube users are forced to take more brand deals, some content creators have flocked to Patreon to earn from their creations, and, even though Youtube creators can monetize their content, the lion’s share of advertising revenue goes to the company. Beyond that, the viewers are getting 0 compensation for participating and actually providing revenue through their views on advertising.
Castweet’s means of solving this issue is to allow all actions, from viewing to sharing, to have a tangible benefit to the user. Each received CTB points can be directly converted into CTT tokens with none of the proceeds being taken by the platform itself. Average users, indie creators, professional live-streamers, and even the viewers themselves can benefit through our direct compensation model that inspires and rewards great content uploaded on the platform. We hope to reimagine what it means to participate on a live-broadcasting platform, turning on its head the notion that content itself does not have a monetary value and helping to empower visual creators and viewers of all kinds. Additionaly, there needs to be a system that benchmarks average user activity and can separate the abuse accounts from the actual user accounts. Castweet is developing just that system which will be outlined in a future post.
Not what I mean by turning it on its head.
Finally, issue three resides at the heart of what utility tokens set out to do in the first place: How do you provide utility and a use case for those tokens?
The company must create value through the platform itself, using their tokens as a means of both exchange for goods or services and as a reward to those that are actively using the coins. You can see this dichotomy established in “investment coins” which have high purchase rates but low use rates due to future price speculation. For utility coins, a vibrant ecosystem which promotes the usage of the coins on platform has to be provided in order to ensure their value.
Within the Castweet platform, the ecosystem was created from the ground up to promote the usage of the tokens. Tokens can be used within the platform for digital purchases, our innovative P2P marketing system, tipping creators, or one of the various other functions in our pipeline. While cryptocurrency traditionalists might be motivated to hold tokens for future potential gains, average live-stream viewers can see them as redeemable and directly usable. In this way, the utility of CTT is realized.
The main goal for Castweet: live-streaming platform in the front, blockchain in the back.
Castweet: The Mullet of Platforms. Wait, actually that's not the best ad-copy for our platform.
What do are some utility coins that you think have done things right so far? What other lessons can be learned from utililty coins that failed to provide utility?
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