Bounties and Airdrops are both indicators that the creators of the coin/token don’t believe it has much value. Another indicator that the creators of the coin/token don’t believe in the value of their creation is how quickly they attempt to get the coin or token listed on cryptocurrency exchanges.
What are Bounties and Airdrops?
Bounties are payments that are given to individuals who perform certain tasks that typically help promote the coin/token. The bounties are usually paid in the cryptocurrency that is being promoted. Airdrops are usually given to individuals who either hold certain coins that are hard forked or given to certain individuals who are typically early adopters of that particular cryptocurrency. Airdrops are essentially giveaways.
Why Airdrops and Bounties?
It has been argued that airdrops are good because they help promote the cryptocurrency. I’ve seen it said that if people have a certain cryptocurrency they are more likely to learn about it and promote it to their networks therefore increasing the value of it. Bounties which require arguably more arduous tasks, function similar to airdrops in the hopes that value will be added to the token/coin by placing them in the possession of more people. In my opinion, all of these arguments and techniques are just ways to pump and dump worthless coins/tokens. These strategies harm the reputation of cryptocurrency technology which is undoubtedly connected to blockchain technology.
What Determines Value?
Value is based on several factors, the most important being supply and demand. Demand however, can be influenced by perceived value. If something is truly valuable, then why would anyone simply give it away?
What brings value to a cryptocurrency is not much different than what brings value to a fiat currency. Cryptocurrencies have a technology aspect built in to their value, but this is not much different than fiat currencies. There are all sorts of technologies built around fiat currencies that make them more valuable like the Cash App, Venmo, PayPal, Western Union, Apple Pay, Debit cards, Checks, ACH network, wire transfers, etc. Cryptocurrencies don’t have a unique claim to technology because of blockchain technology. So what gives a cryptocurrency value? The same thing that gives any currency value also applies to cryptocurrencies. Who wants to accept the currency in exchange for goods and services and of course supply determine value.
Cryptocurrency Exchanges Don’t Add Value, They Exchange Value
If you truly believe that your cryptocurrency has real value then why be in such a hurry to exchange it for another currency? Everyone who creates a cryptocurrency should be first and foremost concerned with making their coin/token as independently valuable as possible. Exchanges should be far from their minds. If you are basing the value of your cryptocurrency on the ease at which someone can exchange it for another currency then you have begun with the false premise that exchanges bring value to your cryptocurrency.
Tarnished Reputation of Cryptocurrencies
The prevalence of unscrupulous people creating worthless cryptocurrencies and using others to convince people that it has value is voracious. This only leads to the creators of the coins/tokens dumping them immediately on exchanges for currencies that they believe have real value. This is alarming and damaging to the reputation of cryptocurrency technology. The inability of the average person to differentiate between the deceitful and the virtuous makes it difficult for those with pure intentions and good projects to get the consideration and focus they deserve.
Merchants Are Key
In the current madness that is the cryptocurrency space, I believe that there isn’t enough attention paid to the merchants. Many cryptocurrency creators aren’t and have never been merchants. They don’t seem to understand or care about the fact that stability in price is essential to merchants. Merchants don’t want to accept a currency that is likely to drop drastically in price, nor do they want to accept a currency that is likely to shoot up in price. To be effectively used, a currency needs to be steady and it needs to flow seamlessly throughout a network of buyers and sellers. Cryptocurrency exchanges completely distort the effectiveness of the currency by encouraging people to hold on to it and speculate on it, all which artificially drive up or tank value.
Speed Shopper’s Solution
The Speed Shopper app isn’t offering any bounties and isn’t doing any airdrops. Speed Shopper also isn’t in a hurry to list its token (SSTX) on any exchanges. The only reason why Speed Shopper would find value in an exchange is if advertisers want to purchase SSTX from the Speed Shopper Treasury and the Treasury supply becomes too low. This could be caused by too many Pioneer Shoppers saving their SSTX for various reasons. At that point it would be beneficial to encourage Pioneer shoppers who have earned SSTX to place some of it on open exchanges so that Advertisers could purchase it there. However, there is no guarantee that they would exchange it.
There are also other ways of encouraging those with the cryptocurrency to act in ways that would place SSTX back within the flow of the ecosystem. If those with SSTX perceive the value of the currency to be higher than that of any currency they could exchange it for, then they will keep it. This only means that Speed Shopper must find a way to incentivize its Pioneer Shoppers to spend the SSTX that they have earned. This can be achieved by signing up more merchants and encouraging them to add better products to the SSTX market. All of these solutions should enhance the user experience and enrich the experience of the end user with cryptocurrency and blockchain technology.
Mitchell McElroy, Founder/CEO of The Speed Shopper App