Token question and ownership

[Rad498]

I am new to crypto and was hoping someone could help.

I understand that with stocks you are getting ownership and future cash flow of a public company, bonds your providing a loan and getting paid back with interest and real estate your getting rents and appreciation. 

What are you getting with tokens like etherium, algorand, polkadot?  There are no cash flows, ownership stakes, or interest.  There are no earnings reports or how successful the software is.  If there is nothing backing these tokens, I fail to see what value they have?   

[BIT-BENDER]

I don’t seem to understand your point of view mate, when you get Coins like Ethereum where ever you buy it from either peer to peer or through and exchange once you receive it it’s yours, you own in. And that means if the coin does well in the future by going higher in price then your investment is yielding profits, Crypto-currency investment isn’t complicated. It doesn’t have a fix value so it’s a good source of investment when you make wise choices.

[serjent05]

  If there is nothing backing these tokens, I fail to see what value they have?   

There is demand in the market and that is what important.  As long as there are people willing to buy the tokens, the token will have value. besides cryptocurrencies like Bitcoin, Ethereum and BNB have real-life uses, and these real-life uses also backed these cryptocurrencies.

Aside from that, a speculative market is pretty much popular among traders because they can take advantage of the volatility of these cryptocurrencies.

[Rad498]

 If there is nothing backing these tokens, I fail to see what value they have?  

There is demand in the market and that is what important.  As long as there are people willing to buy the tokens, the token will have value. besides cryptocurrencies like Bitcoin, Ethereum and BNB have real-life uses, and these real-life uses also backed these cryptocurrencies.

Aside from that, a speculative market is pretty much popular among traders because they can take advantage of the volatility of these cryptocurrencies.

Right, as long as there are people willing to buy the token.  But aside from popularity, what else determines their value if anything?  

If polkadot generates revenues and becomes popular, it’s not like their token entitles me to ownership or future cash flows like stocks.  If a company generates more profits and grows, it’s stock becomes worth more because it’s cash flows are worth more if they get bought, go private, or they have dividends.    

But with tokens, it seems to be strictly a popularity contest without anything backing them.  An uncoupling from the underlying software and applications other then the Name of the application such as polkadot. I know some tokens give you votes and others are used to pay fees on the networks.  

It’s kind of like generating tokens called Cubs baseball team token and trading them on an exchange.  But you don’t have ownership of the Cubs through the tokens or any other benefit if they do well other then popularity.  Do I have this right?

[blockman]

I am new to crypto and was hoping someone could help.

I understand that with stocks you are getting ownership and future cash flow of a public company, bonds your providing a loan and getting paid back with interest and real estate your getting rents and appreciation. 

What are you getting with tokens like etherium, algorand, polkadot?  There are no cash flows, ownership stakes, or interest.  There are no earnings reports or how successful the software is.  If there is nothing backing these tokens, I fail to see what value they have?   

Do not compare it with any other stocks. Although in easy understanding, there's sort of similarity but they're completely different. Having Ethereum, means that you own it as long as you have the private keys of that wallet where your Ethereum or any other mentioned crypto deposited.
If you're looking for the cash flow, you should take a look at the daily volume of these projects for you to have an idea on how much cash is flowing within these projects on a daily basis from exchanges and other moving transactions.

[Jackl87]

I am new to crypto and was hoping someone could help.
I understand that with stocks you are getting ownership and future cash flow of a public company, bonds your providing a loan and getting paid back with interest and real estate your getting rents and appreciation. 
What are you getting with tokens like etherium, algorand, polkadot?  There are no cash flows, ownership stakes, or interest.  There are no earnings reports or how successful the software is.  If there is nothing backing these tokens, I fail to see what value they have?   

Well in the end it all comes down to general principle that is the driving force of every good or asset that can be bought and sold: supply and demand. If you buy traditional stocks you also don't always get a dividend as there are a lot of companies out there that are not paying dividends to their shareholders. You buy those shares simply because you think that they have a pretty high chance that they will be more valuable in the future than they are now when you buy them. This means you can sell them for a higher price than you have paid, which means you make a profit.
In addition to that a lot of tokens and coins can be staked in order to generate additional income in the form of interest.

[dark1234]

some of us choose to have bitcoin or altcoin as an investment of course the volatility which will provide different expectations of value and profit from stocks but basically looking for profit with a different level of risk, as a beginner you join here of course you have a strong reason, whether driven by blockchain and crypto technology systems or because of price and value because I personally think most of those who join the blockchain and crypto world because of a price and value that gives them hope to get rich 

[judeafante]

I am new to crypto and was hoping someone could help.

I understand that with stocks you are getting ownership and future cash flow of a public company, bonds your providing a loan and getting paid back with interest and real estate your getting rents and appreciation. 

What are you getting with tokens like etherium, algorand, polkadot?  There are no cash flows, ownership stakes, or interest.  There are no earnings reports or how successful the software is.  If there is nothing backing these tokens, I fail to see what value they have?   

I hope you're not yet investing because you don't understand what you're getting into yet, first, you need to understand what is Cryptocurrency and its usage first, go check Youtube and articles about how Cryptocurrency works its a totally different from the system you know or grow up with, its a new world for you, don't get into Cryptocurrency because of the profit understand its purpose and usage first.

Cryptocurrency

[Rad498]

I am new to crypto and was hoping someone could help.

I understand that with stocks you are getting ownership and future cash flow of a public company, bonds your providing a loan and getting paid back with interest and real estate your getting rents and appreciation. 

What are you getting with tokens like etherium, algorand, polkadot?  There are no cash flows, ownership stakes, or interest.  There are no earnings reports or how successful the software is.  If there is nothing backing these tokens, I fail to see what value they have?   

I hope you're not yet investing because you don't understand what you're getting into yet, first, you need to understand what is Cryptocurrency and its usage first, go check Youtube and articles about how Cryptocurrency works its a totally different from the system you know or grow up with, its a new world for you, don't get into Cryptocurrency because of the profit understand its purpose and usage first.

Cryptocurrency

Let’s assume crypto becomes wildly successful and takes over financial applications, law, etc. 

How will I profit from these tokens when they do not give me an ownership stake in the applications and software?   

[tippytoes]

  If there is nothing backing these tokens, I fail to see what value they have?   

There is demand in the market and that is what important.  As long as there are people willing to buy the tokens, the token will have value. besides cryptocurrencies like Bitcoin, Ethereum and BNB have real-life uses, and these real-life uses also backed these cryptocurrencies.

Aside from that, a speculative market is pretty much popular among traders because they can take advantage of the volatility of these cryptocurrencies.

This is why it is important to follow-up the coin or token that you are holding, so you will know what kind of developments they are going thru. The value of the token basically revolves around the supply and demand concept. So much better if you will invest on a project with actual applications in the market, where users are actually using it. Their price is very subjective as it depends on the market itself, how people perceive the token's usefulness and value in the market.

[Rad498]

I am new to crypto and was hoping someone could help.
I understand that with stocks you are getting ownership and future cash flow of a public company, bonds your providing a loan and getting paid back with interest and real estate your getting rents and appreciation. 
What are you getting with tokens like etherium, algorand, polkadot?  There are no cash flows, ownership stakes, or interest.  There are no earnings reports or how successful the software is.  If there is nothing backing these tokens, I fail to see what value they have?   

Well in the end it all comes down to general principle that is the driving force of every good or asset that can be bought and sold: supply and demand. If you buy traditional stocks you also don't always get a dividend as there are a lot of companies out there that are not paying dividends to their shareholders. You buy those shares simply because you think that they have a pretty high chance that they will be more valuable in the future than they are now when you buy them. This means you can sell them for a higher price than you have paid, which means you make a profit.
In addition to that a lot of tokens and coins can be staked in order to generate additional income in the form of interest.

The companies without dividends make money.  The more money they make, the more valuable your ownership stake in the company becomes.  The more valuable the stock.  This is because those companies may issue a dividend in the future, they may get sold, go private etc.   Your shares become more valuable not just because they’re being hyped somewhere, but because they are valuable and have a reason for being more valuable.

There is NO ownership stake when you own a token.  My take is that these tokens are used for governance and fees on some of the platforms.  There are no future cash flows.  Simply sentiment driving prices of tokens which have no intrinsic value because they entitle you to very little, like a vote on the future of a platform.   If sentiment dries up, there is no floor to the lower end of value.  They will go to 0 unlike companies which make money.

[Jating]

I am new to crypto and was hoping someone could help.

I understand that with stocks you are getting ownership and future cash flow of a public company, bonds your providing a loan and getting paid back with interest and real estate your getting rents and appreciation. 

What are you getting with tokens like etherium, algorand, polkadot?  There are no cash flows, ownership stakes, or interest.  There are no earnings reports or how successful the software is.  If there is nothing backing these tokens, I fail to see what value they have?   

It seems you need to dig deeper to cryptocurrency market as you keep comparing it to traditional market like stocks. In crypto market or at least in projects, there is no central authority, of course there is a developer like Vitalik for example with ETH. But they don't have control of the price and cash flows.

The only thing is that you will invest, buy ETH at a certain price, hold on it. And if the value goes up, then you can 'trade' it in a crypto exchange and that's where you get your profits.

Fiat is also not back up by anything.

[dansus021]

if you can make a friend with volatile of crypto you can easily make money whenever the market is bullish or bearish. and not just stop that this is kinda risk and you must #DYOR first you can actually earn interest from crypto in DeFi or Centralized Exchange the example is Loan, Farming and DeFi staking and lot more

[bittraffic]

The tokens mentioned have staking protocol which staking them is like getting dividends. There's that cash flow you wanted to hear.

Staking those tokens however on the exchanges means you don't own those tokens, there had been discussions about this already because you need to be on a platform to stake these tokens.

[makishart]

What are you getting with tokens like etherium, algorand, polkadot?  There are no cash flows, ownership stakes, or interest.  There are no earnings reports or how successful the software is.  If there is nothing backing these tokens, I fail to see what value they have?   

There are interest from staking. The report based on the development progress and that's why you must always keep your eyes in the project itself. There's no financial report like the regular company. The value from this token was coming from the company and its utility. There's no need to backed it. The company was backing the token. Stock was also backed by the fundamental of company

[hugeblack]

It is similar to stocks, you own it, and therefore if its price increases, it will make profits, and if its price decreases, it will make losses, but in general, most altcoins fail to continue the upward trend compared to Bitcoin, so it is dangerous to invest in large amounts.

Then the way the smart contract is written will determine the type of ownership of those tokens and how they are spent.

[Amicable55]

if you can make a friend with volatile of crypto you can easily make money whenever the market is bullish or bearish. and not just stop that this is kinda risk and you must #DYOR first you can actually earn interest from crypto in DeFi or Centralized Exchange the example is Loan, Farming and DeFi staking and lot more

Well the question arises here that making crypto friend is not an easy task. I strongly agree with you that crypto friend will surly help you to earn a handsome income. BTC is running around 23K$ and a truely crypto frind leads to a good way. You have an asset which you can use for profit. More asset means more profit.

[JayTrain]

the value lies in the success of a particular project, if for example it is ETH, everyone knows that this is the largest network of smart contracts and defi, that's the whole logic. Here everyone shares their choice, of course this is a big risk, but this is a personal matter for everyone and everyone bears their own individual responsibility for this.

[Xal0lex]

Some tokens give you voting rights in DAO or owning tokens of some platforms gives you different bonuses, like low commissions, different rewards, claim airdrop, etc. It all depends on the ecosystem you are holding in. For example, when I buy DAOMaker tokens, it gives me the right to participate in closed sales or I can get some rewards for being a holder of those tokens on the platform. In general, holding management tokens, DAO tokens gives a lot of benefits if you are an active user of these ecosystems.

[Rad498]

Some tokens give you voting rights in DAO or owning tokens of some platforms gives you different bonuses, like low commissions, different rewards, claim airdrop, etc. It all depends on the ecosystem you are holding in. For example, when I buy DAOMaker tokens, it gives me the right to participate in closed sales or I can get some rewards for being a holder of those tokens on the platform. In general, holding management tokens, DAO tokens gives a lot of benefits if you are an active user of these ecosystems.

I get there are benefits to holding some of these tokens.   But their structure does not provide ownership stake like with stocks, real estate, commodities, etc.   I am talking about long term ownership for years.   Not short term speculation/gambling on token.  Vegas is more fun for that.

Like I said before, why don’t I create a token called Cubs baseball token, trade it on an exchange but offer no ownership.  Maybe offer those who have 100 tokens a free beer at the game.   The token itself does not reward me for Cubs baseball team doing well or making more profit.  The token is like a Cubs collectible.

I hope there will not be a chapter in one of those books on bubbles how rationale people were buying worthless tokens and computer code for thousands and millions of dollars.