More than 2000 cryptocurrencies are floating around on CoinMarketCap right now. While some have found true use-cases, most of them provide redundant services and applications. As we move into the future with the market getting more and more saturated, what should we expect regarding their survival? Are all of these going to survive or only the major ones will?
Jason Anthony Williams, who is the co-founder and general partner at Morgan Creek Digital, recently shared his detailed and insightful opinion regarding this matter in an exclusive interview with BlockPublisher. Are all the cryptos going to survive or only the major ones will, replying to this, he said,
Jason: “Look I think that there are a handful of true cryptocurrencies, so you have to put them in that bucket. Then there are, or there was, the ICO phenomenon. I think there’s a huge portion of ICOs that are non-productive utility tokens. Those are essentially like arcade tokens that you cannot convert back to fiat. So you bought them with your fiat currency, they gave you some non-productive utility token, it’s not a share of equity, and you could only use it inside that ecosystem. It’s literally garbage in my opinion. It was a quick scam to raise lots of non-equity based capital. So those guys took advantage of a lot of people.”
Jason pointed out a very important detail regarding the situation that helps one understand the difference between actual cryptocurrencies and non-productive utility tokens. The ICO boom was used by many projects in the crypto game to raise a quick buck. Now, it seems that those kinds of tokens present in the arena that cannot be converted back into fiat, have usage within a specified ecosystem, and do not represent a store of value in the digital form, those are not likely to survive unless the use-cases provided by them have strong real-life applications and implications.
Further talking about his approach regarding the ICO situation, Jason said:
Jason: “Myself and my partner took a very unpopular position back in 2016. We weren’t going to invest in any ICOs and I think that was the right bet, especially these non-productive utility tokens we didn’t understand them at all.
Now there are some projects like Augur that have a utility token, that gives you sort of a share of equity, that makes more sense to me. Like you are getting a token that gives you a ownership position in revenue or profitability. That makes sense to me and I think we need to explore those situations.
But you know from my perspective, I think there’s going to be consolidation in the market. You are seeing that right now with the visa transaction that happened recently. I think you are gonna see rage quitting by engineers who know that their projects were scams, or BS, so there’ll be consolidations of talent. But I think it’s a really exciting space. I think the smartest people in the United States and around the world are moving into this new world, new opportunity, and that’s a good sign.”
This discussion pretty much sums up the entire situation regarding the survival of specific cryptocurrencies moving into the future. It likely seems that those cryptocurrencies that behave as digital assets are more likely to persist and survive as compared to the utility tokens that are non-productive, do not have strong real-world use-case, do not give one any profitable position or share in equity, or an ownership position in revenue.