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Creating Intrinsic Value in CryptocurrenciesDive Deeper Into Particl
The investment banker Jamie Dimon caused a stir when he declared recently that Bitcoin will collapse because it is “worth nothing.” Bitcoin’s current market value, he claimed, is driven almost entirely by speculation, rather than by any real and present intrinsic value that Bitcoin actually provides.
Casting aside the debate over whether Bitcoin has intrinsic value or not, it seems fair to say that Dimon doesn’t know the cryptocurrency market well. If he did, he might have noted that Bitcoin is only one of dozens of major tokens available. Some tokens were designed with intrinsic value as a specific goal.
Particl, which was created last spring, is building a decentralized eCommerce platform, a framework for third party apps, and a suite of privacy tools to go with it.
PART solves various privacy problems associated with BTC, such as the ability of third parties to trace transactions. Adding multiple cryptographic proofs like Ring Signature Confidential Transactions (RingCT) and Confidential Transaction (CT) plus trustless mechanisms like MAD escrow, Particl provides 100 percent anonymity to people who buy and sell using PART.
While the Particl privacy platform and upcoming Marketplace supports most major cryptocurrencies, PART serves as its utility token.
PART and Intrinsic Value
The value of Bitcoin has risen astronomically over the past several years in part because people believe Bitcoin will one day be widely used and provide services that other forms of currency cannot. For this reason, the growth in value of Bitcoin has far outpaced actual Bitcoin adoption.
PART is different. PART’s value is based on more than the potential future worth of the Particl Platform or PART tokens. People who own PART tokens derive immediate benefits from them, including the following.
PART is a flexible cryptocurrency, especially with respect to the level of privacy and anonymity users wish to have.
Default transactions on the Particl network are pseudo-anonymous like Bitcoin. The network is Proof of Stake (PoS) so only default and stealth addresses can stake PART. Exchanges and services also transact with the network using public PART addresses.
If they wish, PART users can benefit from features like RingCT in order to gain a privacy experience equivalent to using a token like Monero, which created RingCT. Alternatively, they can use PART tokens with CT blinding features applied to hide amounts sent between addresses.
This flexibility adds to PART’s intrinsic value because it allows PART to be used for different sorts of transactions and is 100 percent based on user preference. If — as proponents of Bitcoin pointed out in response to Dimon’s criticisms — Bitcoin provides intrinsic value in part by enabling transactions that traditional currency can’t, then PART’s ability to accommodate a range of transaction types and use cases makes it even more valuable.
PART ownership confers voting rights within the PART community. The future development of the Particl Project and its privacy platform is decided by users who own PART tokens. In this sense, PART tokens have an intrinsic value that is absent from a cryptocurrency like bitcoin, where the ability to propose or vote on platform changes is not linked to coin ownership.
PART tokens generate passive income for their owners through working for the network (staking) and from fees collected from privacy DApps built on the platform like the upcoming Marketplace. PART is an inflationary token, therefore its supply increases by 5 percent in the first year and decreases by one percentage point until the fourth year, when the inflation rate reaches 2 percent. Inflation is then maintained at a 2 percent rate indefinitely.
In each of these ways, simply owning PART tokens generates
additional income independent of increases in the market value of the tokens on
Last but not least, as noted above, PART serves as the utility coin on the Particl Platform. Sellers who use Particl Marketplace are always paid in PART tokens (even though buyers can use any cryptocurrency of their choice). In addition, like Ethereum, any decentralized application built on Particl’s platform will transact using PART which also goes to stakers.
PART is therefore intrinsically linked to the Particl Platform. As the adoption of the overall platform grows, so does the value of PART.
If you want to make the case that cryptocurrencies have intrinsic value based on services they provide today, PART is a good subject to work with. More so than Bitcoin, PART derives its value from benefits that it provides to all token holders natively, on its own privacy platform. Owning PART is the furthest thing from speculating on tulip bulb futures (a historical blunder to which Dimon compared Bitcoin) as you can get.