
Where does the value in an ICO token come from? - uptownfunk
Stocks have some underlying value as they give some sort of ownership stake in the company and can entitle you to dividends etc. Where is the value in an ICO token if you don&#x27;t have any ownership stake or dividend payments?
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endswapper
I think the value needs to be aligned with the associated network. If there is
no network then I think you have increased risk of a token being a security,
snake oil, or baseless speculation.

The Token Effect, by Ramon Recuero ([http://blog.ycombinator.com/the-token-
effect/](http://blog.ycombinator.com/the-token-effect/)) does a good job of
emphasizing the role of a network and how value is aligned. From the blog
post:

"Fairness is defined by rewarding good actors monetarily for contributing
value to the network."

"Tokens allow decentralized protocols to capture the value of the network."

"In summary, tokens coordinate efforts in the network and motivate responsible
participation."

The hype of ICOs has been focused on tokenizing everything, which doesn't
necessarily create value. Going forward, I expect the emphasis to shift from
tokenizing everything to creating networks out of everything, and tokenizing
those networks. However, I also expect we will require numerous, obvious,
practical examples (e.g. failures) before the community refocuses on networks
as the source of value and tokens as yet another tool.

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nivertech
The short answer: out of thin air or more exactly out of ether ;)

The long answer:
[https://twitter.com/nivertech/status/903964504446439424](https://twitter.com/nivertech/status/903964504446439424)

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neboysa
From the same place where value of a roulette game comes from: from belief,
hope, faith and opportunistic gambling of people that have enough coins to
place them on many different numbers hoping to get some cash before the house.
When you bet some coins on a number in roulette, you get no ownership and
you'll get no dividends from the casino - but you may end up with some cash
when the wheel stops.

