SMTs Are Utility Tokens: The Next Big Thing In Cryptocurrency

In 2017, the rage was ICOs. That is what captured the imagination of everyone. We saw many fine projects host an ICO in an effort to raise money. Unfortunately, we also saw a lot of scam projects that went ICO. This caused many to lose money and the publicity, garnered the attention of regulators like the SEC.

The entry of the bear into the crypto space caused the ICO frenzy to die down. Nevertheless, the scrutiny that came from the regulators would have slowed it anyway. We are now faced with a situation where projects need to spend hundreds of thousands of dollars to ensure they are in compliance with the SEC regulations (in the United States). This is why Americans are excluded from many of the ICOs taking place over the last year.

2018 saw the discussion about security tokens. This is going to be a huge market for cryptocurrency with these tokens being backed by an asset. The main idea is to take non-liquid assets and make them liquid. Look at how easy it is to buy stock these days. Stocks, because of the Internet, are extremely liquid. Real estate and partnership agreements, on the other hard, are not. The security token alleviates this issue by having the tokens traded freely on markets the same way all cryptocurrency is.

This started the idea of Security Token Offerings (STOs). The only problem, for the average person, is these deals are open only to "accredited" investors. In the United States, this often means $1M in asset worth or investment of $500K or greater.

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We now have another option that could really open the floodgates.

I read where it was termed "Consumer" tokens. These are, essentially, utility tokens. They are one that are designed and marketed not as speculation but, rather, as a token that has a use. Consumers can acquire the token as a means of interaction on a particular platform. The token is not purchased with the intention of being a speculative asset. Instead, it is for use purposes.

The belief is that the SEC will be more accepting of this approach as a non-security and that anyone can participate in a Consumer Token Offering (CTO).

Civil and ConsenSys are leading the way in this. They are putting together the groundwork in an effort to open the door to other coins that are seeking to follow suit. By going through the proper channels, they are enlisting the SEC in this endeavor. After determining that Bitcoin and Ethereum were not securities, the SEC s showing itself to being open to other concepts.

In a week, Civil took in $315,000 on the sale of 1.5M tokens.

https://decryptmedia.com/5920/forget-about-stos-the-consumer-token-offering-is-the-new-new-thing

This is exciting news for those on Steem. We are awaiting the development of the Smart Media Token protocol. This is a way that applications (or anyone really) can design a token. We are already seeing some tokens created using Steem-Engine while others are going the Ethereum route until the new protocol arrives.

Either way, the idea behind most of these tokens is a means of interaction. While there are many who will be speculating, the bottom line is the token is tied to an application that does something. It is a means of engagement on that platform.

For example, the HUNT that is being put out by @steemhunt is used to reward people for finding technological products and applications that other users find interesting. They are also going to open things up to companies that seek to promote their products to parties that are technically oriented and are apt to buy that sort of thing. For reviewing and providing feedback, one is rewarded in, you guessed it....HUNT.

As you can see, the HUNT does not denote ownership in any type of company. It is a utility token acting as a currency on the Steemhunt platform. Nowhere is there the indication of profit potential from the platform. Markets certainly can do what they want but the HUNT is not designed to be a speculative asset. It is a token to monetize engagement by the user base.

We can see this same idea across other applications, even if they do not have a token at this point. Just look at what people are doing on @dlike, @actifit, @steemmonsters, @dtube, and @steempeak and you can see how the interaction unfolds. The tokenization of those applications would fall under the Civil idea of a "Consumer Token".

The way Steem is set up, most SMTs are going to fall under this distinction. The reason I say that is because the protocol is going to mirror STEEM. This is important because it provides the attributed of the main coin, i.e. the reward mechanism. Also, by having a similar wallet set, actions such as delegation, allow for more interaction and usage by those who are lacking the tokens.

We are seeing many steps to move the crypto-world forward. Steem is progressing through rapid development of hundreds of coders. However, we are also seeing industry initiatives that are also benefiting Steem. This is one of them.

Could we see a lot of Consumer Token Offerings in the future on the Steem platform?

We shall see.

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