Crypto Token Ownership
Lesson time 12:35 min
There is a proliferation of tokens in the cryptocurrency space—but they don’t all hold real value. Chris Dixon unpacks the tokens that exist in the market and shares tips on what to consider before buying into something new.
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Topics include: Token Design • Tokenomics: Supply • Tokenomics: Distribution • Tokens Are the New Startups
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- When you talk about tokens, the way I think about it is there's at least three different aspects. How is the token designed? What's the point of the token? Is it a good community? Is it healthy? Is trying to build something? Or is it trying to speculate and make a quick buck? - I don't know that we know exactly where value will accrue to any given project and what type of tokens are going to accrue the most value. For example, utility versus governance. I think that's actually the cool thing. - Token ownership and participation is a very powerful concept in crypto. The idea that the user can participate in different projects that they're interested in through token ownership is an improvement upon Web2 where individuals didn't have control of their data. As more Web3 projects proliferate, there will be more tokens that proliferate where virtually anything can be tokenized. What I would recommend to you is to think about what projects and products you think are the absolute best. Quality will be rewarded. And so while it may create a lot of challenges and questions about the number of reward tokens proliferating, ultimately, rely on a simple technique of thinking about the things that you think are the highest quality, and value will likely accrue to those things with the highest quality. One of the reasons that I joined Coinbase was because I didn't necessarily want to pin my hopes on one token. I wanted to be at the platform where all of that great token activity actually transpires. You should explore these different projects. You should explore the governance tokens where you can have a say in the direction of a given project. You should explore utility tokens and purchase an NFT of your favorite artist and see how you like to interact with that NFT. There's such a wide range of opportunities in the crypto economy. And we don't know exactly how they'll play out. - There's a lot of chatter about different kind of terminology. People talk about coins, tokens. I would say, generally, the two, coin and token, are interchangeable. Most people say token. Coin is kind of an older term. And it basically refers generally to either a fungible-- when people say token, they usually mean a fungible token, which means like a token that's kind of more like money like in the sense of Bitcoin or Ethereum or Ether as opposed to NFTs, which are nonfungible tokens. The token is just a unit of digital ownership. And in the same way that in the offline world there's times where owning something makes sense, there's products that are useful and there's products that aren't useful. And software is just as kind of broad and malleable as the physical world. You can create really cool stuff and you can create bad stuff. And it's hard to generalize because it's kind of case by case in the same way that if you wanted to go analyze, let's say, internet startups and 1990s, it would be hard to generalize and say this category is good, t...
About the Instructor
Since Bitcoin’s launch in 2009, crypto has offered the hope of a stronger, more democratic financial system. And it’s raised plenty of questions as it continues to evolve. Now experts and skeptics at the center of the conversation are sharing a straightforward look at how this ecosystem is changing. Learn the basics, dive deep into the world of blockchain and Web3, and get the breakdown on what you need to know now.
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Chris Dixon, Changpeng “CZ” Zhao, Emilie Choi, and Paul Krugman
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