Technology and Participation: The Twin Pillars of a Successful Digital Asset Ecosystem

By Seth Patinkin   Jun 04, 2019 2 Min Read

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For any digital asset - cryptocurrency or token alike - to achieve any resemblance of a global, decentralized universal currency, it must have a viable ecosystem. And any viable ecosystem must consist of both technology and participation.

The two must come in tandem - it cannot be just one or the other. While many digital assets currently available have delivered strong technology, the ecosystems surrounding them fail to gain adoption because they fail to garner the necessary participation. When participation is overlooked - how are we going to get people involved with this token and technology? - adoption, and thus an ecosystem, can never be achieved.

Participation is the key variable that defines successful tokens. In order to achieve participation, there must an adoption logic baked into the offering. There must be an economic incentive implied for the token holders whom adopt the token in the early stages, and even the later stages as the token economy moves forward.

Involvement in the ecosystem must offer advantages and conveniences for the token holders via the underlying technology. The technology infrastructure should solve a real-world problem for the participants. A growing palette of applications should be pipelined for the users, increasing the depth of the features offering available for them over time. These might include opportunities for payments, engagement in social platforms and activities as well as engagement with product and service providers whom naturally gravitate towards the platform as a means of business development and growth.

The breadth of the technology and application offering should correlate to the token value, moreover. Early adopters of the token should realize actual economic benefits from their presence in the community which explicitly enabled and instilled the incentives for the growth of the technology platform.

Moreover, the stakes of the participants should also relate to corresponding benefits for the users. Whether this is expressed as mining rewards, or access to applications or otherwise, there should be a correlation between stake and ensuing benefit for the token holders.

Finally, there should be natural means of comparing the breadth of the technology offering with the status of the token holders. There should be a natural way of measuring the value of the technology offering in terms of the token stakes and values. These are two separate stores of value which should be measurable and easily relatable one to the other.

Thumbnail image credit: Shutterstock

Seth did his PhD work in mathematics under John Forbes Nash at Princeton and is CEO and co-founder of Ampersand Markets.

About the author

Seth Patinkin
Seth Patinkin, PhD, studied under John F. Nash at Princeton University and is CEO and founder of Ampersand Markets.

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