tl;dr: Crypto tokens do not just represent digital rights. They represent new possibilities for marketing and business innovation
I use the term “token” a lot here. It occurred to me that, perhaps, I am not being specific enough when I do.
After all, there are many different types of tokens and many potential use cases.
Top 7 Blockchain challenges to go mainstream in 2019 & more… – Data Driven Investor
As I was thinking about this, I recalled a great piece by Balaji S. Srinivasan who is now the CTO of Coinbase, entitled “Thoughts on Tokens.”
It’s long but definitely worth the read. He does a wonderful job of providing a broad overview of how and why tokens really matter.
There are a lot of great points in there, but a few of them stick out to someone with a marketing lens.
- TAM–With tokens, you can significantly increase the Total Addressable Market of your offering (#7 and #8 on his list).
- Liquidity- Thanks to the liquidity associated with a token (#9), buyers will pay a premium. For example, you’d probably rather have a liquid token than 100 United Airlines miles. This increases the value of the total offering.
It’s obviously very early in the token revolution.
Most of the first use cases are going to be tokenized versions of existing offerings (security tokens being the most obvious).
That’s great and it’s fine. That will need to happen and it will make things much faster and more efficient.
At the same time, as Gartner wrote:
“Look beyond these initial use cases to the radical possibilities for value exchange enabled by the programmable economy.”
This is where the exciting innovation will occur.
Back when I wrote the Decentralized Marketing Organization, for example, I was thinking about how tokens will allow marketers to create incentivized viral customer acquisition mechanisms that simply weren’t possible before.
Imagine a “refer a friend” program that has a Lifetime Value component to it. Not just $10 off the first purchase, but 1% off every purchase.
I can get you to try something once and get a referral award, but you’re not going to be a lifelong customer simply because I tell you to do it. Incentives are aligned. Possible with tokens.
Rewards for the frequency of use with an application, number of people you interact with in a chat room (builds community) and more. All possible with tokens.
Micro-payments and micro-rewards. All possible with tokens.
Heck, you can tip this blog with Basic Attention Token if you are using the Bravebrowser. Not possible without tokens.
It took CryptoKitties to show us how tokens could really be more than just money. It could be a “thing” that could not exist in the non-blockchain world.
Those are the ones for us to watch as the Token Economy slowly (very slowly) picks up steam.
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The Infinite Possibilities of Tokens was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.