Warning: This article will probably make you mad if you are a devoted alt coin holder.
I have been saying for some time that the only real long term investment in crypto that will pay off is with currency coins. The business based blockchain coins will for the most part be bought, copied, or simply never used by businesses. My reasoning is that a business has no interest in anything that is decentralized, it goes against the whole concept of building up a brand and a business. Business and corporations want total control, that’s why businesses end up buying up suppliers or other forms of vertical integration. Companies strive to become more centralized, not less so. Only a company that is based on being decentralized will be interested in a decentralized blockchain.
However, with that being said, there are situations where the qualities of a blockchain can help a company. But in those cases, the company will simply buy the current blockchain project it likes, or just build out its own blockchain that it keeps private. In any event, there will be no need for public token that is traded on the market. And thus, no way for you to profit long term from most alt coins that look to help business.
Here is why. The only reason a token needs value in a blockchain is to work as an incentive for the miners. The miners (or stake holders) need to be awarded coins of some value or transaction fees in order to keep doing their job. That’s the only reason coins need value in a blockchain. It’s for the miners to stay active and keep the chain live. However, a business doesn’t need miners if they don’t care about decentralization. They can simply set up a blockchain of their own in a server room. Then just allow their customers or their suppliers or whoever it may be to simply access it. There is no need to have a token of any value and there is especially no need to have a token that is traded on a marketplace that they have no control over. The company can simply give tokens to the customers or whoever accesses their blockchain if needed. There is no need for this to be a public system.
Now, there are a few exceptions, but very few. And most of the exceptions don’t really help the business at all so I doubt they would even be interested. These exceptions include situations where a company can be more transparent or where things need to be verified publicly. However, even in this case, a private blockchain can be setup that provides most of these qualities.
So in the end, I think blockchain technologies will begin to take shape and be used by corporations. But it is almost impossible to imagine a situation in which they would use a public token that is traded on a market. And it is just as hard to imagine them giving up control and placing a part of their business on a public blockchain. As I said earlier, most companies strive to become more centralized, not less so.
Now before you think I hate all blockchain projects, there are some that are viable. I will not name coins or projects, but coins that exist as their own product and are decentralized can be winners along with the currency coins. These need to be disruptive companies that look to supplant current centralized companies. What I mean is that they have to be a standalone service or company. They must offer a decentralized product directly to end users. For example, a social media platform that is decentralized and rewards content creators with its own tokens. This is an example of a decentralized business that relies on being decentralized as its main selling point and can supplant current centralized platforms. An example of something that will probably not work long term is a decentralized tracking system designed to help existing shipping companies track packages. This has virtually no long term value for you as an investor because any shipping company will just copy the technology and run it privately or just buy the project and get rid of the public token.
So I do believe there are applications out there where a blockchain project can offer long term value other than just the currency coins. However, the project needs to be disruptive and look to supplant current centralized businesses. It can’t just offer its services to existing centralized companies, as that will not work for most projects in the long term.