Is cryptocurrency point farming worth your time?

If you have read our article Are Cryptocurrency Airdrops Worth Your Time? Then you remember:

• Airdrop is a method of rewarding early users of a cryptocurrency project with project tokens.
• Although there are differences, investors can think of these tokens as getting free “stocks” in a “company.”
• Airdrops have pros and cons. While we build our initial user base, many “airdrop farmers” are there for free tokens.
• Airdrop farming can be valuable for investors who are tech-savvy and have a lot of free time. (Still, be careful.)
• For conservative investors, they can wait until the tokens are released and then purchase them at a discounted price (as airdrop farmers sell tokens).

In this guide, we’ll give you some perspective on whether cryptocurrency points (or “point farming”) is worth your time. we will explain How Cryptocurrency Points Workdifference Points vs. Airdropand Investor Advantages and Disadvantages.

How Cryptocurrency Points Work

Points are one step removed from airdrops.

Let’s imagine again that OpenAI will launch an IPO like in the article about Crypto Airdrops. Rumor has it that using OpenAI’s flagship product, ChatGPT, you can enjoy the following benefits: free stock When released on OpenAI.

In cryptocurrency, this is an “airdrop,” which simply involves issuing tokens instead of shares.

Now let’s say you are a young AI startup called WideOpenAI and you are having a hard time convincing your users that there will be an airdrop. To acquire users, you can issue: points If people use WideOpenAI. Or tweet about WideOpenAI. Or join the WideOpenAI community. etc.

If your points program is successful enough to gain some traction, you can launch an IPO, convert your points into stock in the company, and all your early users are happy.

If the airdrop is based on a promise, Points provide evidence.

Evidence of your early engagement. This is proof that it helped build a network. Proves “entitlement” to that token (if one is provided).

However, because points are one level removed from the token, there are additional pros and cons for investors to consider.

Problems with point farming

For cryptocurrency companies:

• point = bribe: Like airdrops, points attract a lot of junk users, so it can be difficult to tell whether it’s a really good product or just point farming.
• There is no true loyalty: Like airdrop farmers, many of these point farmers cash out as quickly as possible, reducing the value of your tokens and the company.
• Points hide your performance.: Focusing on a dot may cause it to become out of focus. truth Success metrics (e.g. actual customers and revenue) that could later spell disaster.

For cryptocurrency investors:

• Point ≠ Promise: There is no guarantee that points will be converted to tokens.
• uncertain value: Even so, the points may be almost worthless because there is no conversion rate. (There is no rule that 100 points = 1 token.)
• centralization problem: And points are often stored in a centralized database rather than a blockchain. person appreciating points?

This hasn’t stopped the creation of new “pre-markets” for buying and selling points. This is essentially a bet on the future value of your points within a future airdrop. In other words, you are betting on top of your bet.

And remember: Points can be created for free by businesses., this is the most speculative bet among cryptocurrency bets. You never know how your points will eventually be converted into tokens. If it actually happens!

The power of point farming

However, points programs have some advantages.

For cryptocurrency companies:

• loyalty incentives: Rewards programs are proven business models that increase loyalty (credit card rewards, Starbucks rewards, etc.). them ~can do work.
• User acquisition and network growth: This is a way for cryptocurrency companies to bootstrap users, and (if successful) can lead to truly value-creating network effects.
• community involvement: Many cryptocurrency points programs encourage you to join a Discord server or online forum so you can build a community.

For cryptocurrency investors:

• profit potential: If you have some spare time and some geeky tendencies, Farming Points can help you earn some money through token airdrops. (Probably a lot if there are tokens running.)
• technology development: Using these early-stage products is usually technically challenging, so you learn about how they work.
• Impact on Development: Being an early adopter means you can often have a say in how the product evolves, which in turn can make it better and lead to more valuable tokens.

However, if you plan to participate in the points program, stay safe. Stick to reputable projects, and if possible, break away from your primary investments and use a separate cryptocurrency wallet for point farming.

Investor Implications

Points Farming has both opportunities and risks.

Most investors can leave points to experts. They are speculative. There are no guaranteed returns. Getting rich from point farming is a long way off at best.

but, If you are interested in cryptocurrency, points farming offers more than just money. You can improve your skills, join our community, and help create innovative new products.

so We approach point farming with a value-oriented mindset. Learning and Community Engagement As the bag expands.

but Always maintain a long-term mindset: Remember, the early users of Bitcoin were people who could buy it with just a penny. (But how many people did that and kept it going for the next decade?)

Point farming is not a one-size-fits-all strategy. It’s a niche market for adventurous and tech-savvy people., and people who enjoy the journey as much as the destination. The rest of us can wait until there is a token launch.

Health, wealth and happiness,

John Hargrave

publisher, Bitcoin Market Journal