 And we're back with another video. This time I'm testing out my brand new camera. Well, it's not really brand new, it's part of my phone. It's the Note 8. Mind you, it's a really good fucking camera. Anyways, we'll be talking about token velocity problems today. And this is really, I highly recommend you get this. I'll leave a link below this video for this. It's Wilson Lau, sorry for I butchered your last name. And the title is On the Velocity Problems for Crypto Asset Valuation. And pretty much what he's stating over here is for the most part, if you look at all ICOs today, they really don't need a token. There's really rare cases that an ICO actually needs a token for a utility case or part of the protocol. And for the most part, most of these tokens in the future will go to zero. The reason being is a velocity issue. Let's kind of break things down. These ICOs have a couple of things in common. Number one is they're forcing you to use a token, i.e. hey, I have this interesting service or product, but you must first buy my token to use my service or product. B, once you buy their service or product, what is the point of you even hodling their token? There's no point. For the most part, people investing in ICOs today, they're investing to speculate, right? They're buying an X, as soon as it goes to Y, the arbitrage difference, they're selling and that's a velocity problem. There's no real incentive for you to hodl that token. And keep that in mind. There's no real incentive for you to hodl that token. And so if you're thinking about this thought going on to the future, why should I hodl this token when I know for a fact the history of Bitcoin, how it's created in the first place, how it has proof of work mining, which it has a lot of advantageous, let's say, principles over proof of stake. There's pros for proof of stake, there's cons for proof of work, but we're talking about value. We're talking about means of exchange, means of value. This proof of work mechanism in Bitcoin is much more superior than a token model, which just created an ERC-20 on top of Ethereum. And if they can create something, they can take it back. Remember, at the beginning, when they create these smart contracts for ERC-20s, they have the power to do anything they want. They're pretty much a central bank. And so when you have these ICOs creating these ERC-20 tokens and forcing you as a user to use it to buy their commodity or to buy their service or to buy their product, right away there's no incentive for you to hodl it. They can easily say, hey, we're just going to use Ether as a payment gateway or Bitcoin or Monero. There's no need for their token. And there's a couple of interesting thoughts when it comes to this article. Like number one, some really, really basic stuff is, for example, let's say you have a token. The velocity of the token, people exiting, that's the number one problem. The second big problem is the price, right? Imagine like, for example, right now, you have the big platforms, Telegram and Kin. I'm really excited to see how they launch and what they do. There's obviously many problems with them, but if we don't experiment, we'll never know. However, for example, let's say you're an ICO and you have your token and me as investor, I come in, that's one side of the group. But then you have the users who don't invest in the actual user token. And today your token is, let's say, worth one to one for the US dollar and tomorrow your token is worth 20 cents. And so this is the problem when it comes to valuation of you as a user. If you're on the platform, and I always give this example to YouTube. See, in YouTube, the people who need YouTube for their business, and I would say the YouTubers out there, they make well off of YouTube, right? Whether that is sponsorship videos, whether that is getting paid through YouTube, whether that is running their own business, right? But that's all paid to the USD dollar, right? They know that their dollar today is worth the dollar tomorrow and they have no issues with banking, they get paid to the government overhead for their businesses, or they can just pay their families, et cetera. The issue is like, for example, how on God's earth are you gonna convince these, let's say individuals, whether that's Twitter, YouTube, et cetera, to come over to your platform to say, hey, we're gonna give you our token. You won't know the value of our token in the future. It can be more, it can be less, but please leave what you're doing and come to our platform and use our monopoly money. You see, these tokens, first of all, they need to be stable, right? For you to even start thinking about how to decrease token velocity in your ecosystem, your ERC-20 token and whatever platform you use, it has to be stable. And this is why stable coins like Maker or TrueUSD, they're interesting and they're much needed in the space and the more experimentations for it is good and more people working on these stable coin solutions or say problems to fix it is much needed in the space. But that's the first issue, is like how do you create your ERC-20 token so it's stable, right? As soon as it fluctuates high in price, whether that is through manipulation or pumping and dumping, guess what's going to happen? People are going to sell it. It's all about incentive models, game theory, right? And so whether it's the first round investors or whether it's users, if there's a massive peer, there's an arbitrage of a difference, they're selling your token. They're not keeping your stupid tokens or velocity increases. And the more the velocity increases, the more the devaluation of your token happens because there's really no need for your token. Like I said, many videos before, many of these tokens you can pluck away and the ecosystem still works. You can pluck away and you can put in Bitcoin, you can put in Ether, you can put in Monero. There's literally no use for it, hence why the velocity goes up because they sell it for Bitcoin Monero, Ether. Next major thing when it comes to token velocity is also the token economics. This is simple stuff that William talks about over here. There's actually three really good reads he recommends. I actually recommend that you read this as well. Ryan Selecas, 95 crypto thesis for 2018, fantastic. And I'll read word for word what he states in quotation, most utility tokens then will go to zero regardless of the team quality execution. You simply don't need to hodl them but for momentum and greater full investing, right? Pyramid scheme. When the market lacks higher order investors for speculators to flip, asset will unwind viciously. Down the rabbit hole it goes. Kyle Samani, the article is blockchain token velocity problem, in the case of a proprietary payment token that nobody wants to hold velocity that nobody wants to hold, velocity will grow linearly with transaction volume. Transaction volume could grow a million fold and network value could remain constant. Almost all utility tokens suffer from this problem. And then Alex Evans in on value velocity and monetary theory demonstrates, quotation demonstrates, this is somewhat interesting proof where he represents velocity as a cost minimizing function for transaction costs. What is most important is that he shows, demonstrates the likely relationship between lower transaction costs and increased velocity and the impact of that increased velocity on example token. At the end of the day, if you have to summarize all three in this paper is, there's literally no use for this token for the most part. They do give examples in this of, of certain things that actually make sense. But for the most part, token velocity is going to be a massive problem. And you see it today. Look at the markets. Just look at the markets. And so we're at this interesting time in the blockchain crypto space with a lot of experimentation, a lot of dumb money, a lot of new investors who've never invested before just throwing away money may, maybe they made a lot on Ether or Bitcoin and a lot of naive venture capitalists coming in and trying to get in on FOMO, right? No one escapes FOMO. It's really, really difficult to escape FOMO, human biases, et cetera. But token velocity is a massive issue. I highly recommend you read that article. Go down the rabbit hole, read Ryan's, read Kyle's opinions as well. And just remember, we're at the beginning and these ICOs promising you increase rewards in the future or their token, something special, please give me a break, man. For the most part, just shitting you and shitting themselves that they honestly believe that. So guys, I'd like to know your opinion about this. Leave a comment below this video and hopefully I'll be trying to make more videos on a day-to-day basis on my new camera because it kicks ass. Peace guys, cheers.