No Jokin' Token - What ARE You?!

(Source)

Seems there are a million Tokens out there and someone seems to be creating a new one every minute, but what is... a Token? The answer to this is the reason why 99% of Tokens seem to be worthless. In order for a Token to be worth something, first, it has to BE something.

In it's simplist terms, a Token is described as an object that can be exchanged for a good or service. A coupon for a free donut is an example of such a Token and can be easily understood, valued and trusted.

The trouble with Tokens, as they are created today, is that they represent nothing, with a few exceptions. An HBD is a Token with a well defined function. It represents the equivalent of a US Dollar and can be easily understood, valued and trusted to perform that function. Practically anything that can be bought or paid for with One US Dollar can be bought and paid for with One HBD.

What about 1 Leo? Leo is a Token, right? A Token is an object that can be exchanged for a good or service. What... is the function of 1 Leo? Now, I know I am putting the Leo Token on the spot here, but shouldn't it be? Shouldn't every Token created be questioned for what it's worth and function is?

Worth... Every Token created these days is treated as though it represents some social sentiment as to what it is worth. It's worth what people are willing to pay for it. How does that give a Token any value at all? It doesn't. In fact, it destroys the very thing that gives it value to begin with. Trust. Without trust in the value of a Token, it will never achieve use case.

Let's suppose that Coca-Cola wanted to issue a Token that can be used to acquire Coca-Cola soda products. The Token can be exchanged for any soda that Coca-Cola bottles or dispenses. So Coca-Cola goes and creates the Coca-Cola coin and watches, in dismay, as the price of the coins slowly dwindles like every other coin in existance... Eventually, it takes hundreds of Tokens to acquire a 1L bottle of Coca-Cola soda. What happened? The Token has no definition, so the value becomes whatever the public sentiment for that Token is. And let's face it... public sentiment will always be as cheap as it gets.

Let's give the Token a definition. Let's say... Coca-Cola creates the Coca-Cola Liter Coin. Each Token is worth 1 Liter of a Coca-Cola beverage and will exchange at an equivalant rate, aka a 2L Soda bottle will exchange for 2 Coca-Cola Liter Coins and a 500ml bottle will exchange for 0.5 Coca-Cola Liter Coins. Now the Token has a clearly defined and trusted definition and function. Now, the market will compete between what sellers think the public is WILLING to pay for 1 Liter of soda and what the public WANTS to buy 1 Liter of soda for.

The other interesting thing is now the Token is the universal, everywhere, in every country. 2 Tokens will get a 2L liter dispense of Coca-Cola soda... anywhere. Easily understood, valued and trusted.

So, if you are the creator of a Token, or just the user of a Token, ask yourself... What ARE my Tokens? What is their defined Function? If they are simply a representation as to what the public thinks they are worth and have no definable function of fixed exchange to any good or service except for sentimental monetary value, then perhaps some brainstorming needs to be done to turn the Token into some real representation of exchange.