Now, Blockchain industry sounds up with the novice concept - CTO.

Is ERC20 Token a Good Investment?

A CTO is the newest terminology of the crypto-token world. Without being into the cosmos for long, it is capable of alluring the public. And the time is not far when it will become the buzzword in the industry. Now, you might be thinking about how we can say this, Right?

Alwintechnologies, As blockchain development company being a passionate IT service provider related to blockchain and other modern technologies, keeping close eyes on the upcoming concepts and developments. As the CTO gained popularity, we thought of telling to dynamic entrepreneurs & startups about this sensational topic.

Earlier, we have mentioned enough about ICO and STO; CTO is an extension of the token family and inherent features of both.

What consumer token offering is all about?

As the name “Consumer Token Offering” indicates, it is a system wherein tokens are offered to consumers to be utilized for availing goods and services, and issuers very much mean it. Unlike ICO and STO, CTO cannot be used for generating passive income. It cannot be used as a trading instrument that can be exchanged in the secondary market through exchanges. Also, a consumer token cannot be used for speculation purpose. The purpose is just to facilitate buying.

Basically, it’s a concept that is built with the focus on the benefits of tokens in the form of its utility rather than being a mere trading asset. The whole framework of these tokens is designed in such a way that token serves as a medium of exchange in the business. Also, the aim is that it should gain value in line with the popularity and need of business and not through speculative means.

The liability of ensuring the transparency, security and abiding with the valuation related rules lie with the issuers. This means issuers can’t go the route where people buy their tokens with the mere the intention of gaining through tokens without any interest in the business.

How Does Consumer Token Offering Work?

Consumer Token neither serves as a utility nor as security, instead, revolves around the benefits of the consumer. Any business, while bringing CTO must have in mind the objectives of providing maximum benefits to the consumers and to boost the economy of the business.

The below chart depicts a scenario of business with its consumer tokens ABC. In this chart, we can see that as the value of a business is increasing, in the same manner, the value of its token is increasing too. This shows the concept of how consumer tokens work. The prices of such tokens shouldn’t be influenced by any method by an issuer like discounts, secondary trading market, uncertain token infusion or withdrawal and more like that.

The Difference :

To make readers understand the CTO for business application, we have provided 5 pointer analysis to highlight the working of CTO and display the difference of consumer tokens with its peer.

1. The Concept :

The concept of CTO is a mix and match of its family elders. It gives the benefit of utility tokens and acquires features of transparency and consumer protection from security tokens. As mentioned earlier, it can only be used to serve customers so that they can avail services or buy goods from the business in exchange for tokens. This very difference makes it a unique concept and thus everything around. Right from marketing and businesses that can go with this vary a lot.

2. The Framework :

The creators’ credit for CTO goes to ConsenSys that launched “The Brooklyn Project” and thereby created the Consumer Token. This is the first time when any token is backed by a set of rules that can be applied to the project. It has taken care of all the aspects and even has included an open assessment of the project by the community. Even audit of smart contracts by third part for various issues has been provisioned as well.

3. The Usage :

The CTO can’t be used by businesses that deal in securities. Moreover, it can’t be used is the business does not have any product or service to exchange. The reason behind this is that without the product or service the token in itself is nothing. Token derives all its value from the business for which it is being used. Neither utility tokens nor security tokens served the purpose of consumer benefits and have the capacity to be used for trading and earning through speculation.

4. Indulgence of Relevant Parties :

Another important aspect that differentiates consumer token and its application are activities of involved parties, especially the issuing authority. The authorities must follow good marketing practices and must not involve any activities that affect token prices. This is against the framework defining Consumer Tokens. Previously, with other types of tokens, there wasn’t any restriction in doing so but now it is and that’s a major difference from the perspective of token project and business both.

5. Growth & Demand :

This is the most beneficial factor of consumer tokens that the growth and demand of Consumer Tokens depend on the business and its economy. The more the business and its community grow the more will be the demand and thus higher will be the prices.

This has been made possible by barring activities that inflate the demand the bubble of the token without actually increase in its usefulness or value. That made token vulnerable to profit specific activities that might give a big hit to the genuine customers of the business. Consumer Tokens solves this issue and is a more practical approach towards the digital economy.

Start consumer token offering platform

Alwintechnologies – CTO development services have been evolving since day one and have now started working on the readymade CTO business application & customized as well. Our company focus would be on enhancing features, cost-effective and other crucial aspects of a business when starting to develop CTO.