Do you ever feel that the world around you is evolving too fast for you to keep up? There are too many things happening at such a quick pace, that it makes it extremely difficult for someone to live, work, and be able to make informed decisions regarding their life. And even if you think it does not affect you directly, economics is undergoing too many changes for you not to care about that.
In this post, we will briefly touch on the topic of ‘tokenomics’, and give a general definition.
What is tokenomics and why is it important? How can we briefly understand the value of a coin/token and how can we know more about ways to use our knowledge for investment opportunities?
What is ‘tokenomics’?
The word tokenomics combines tokens & economics, therefore it refers to the economic system governing the operation of cryptocurrencies. One of definitions I enjoyed was this one “Like many concepts in the crypto world, Tokenomics is an ambiguous concept with different interpretations, depending on whom you ask”.
In this blog post, we will try to keep the definitions as simple as possible, and we should always keep in mind that tokenomics is still evolving and has different meanings and interpretations depending on the context and perspective.
Why is tokenomics important?
There are approximately 9000 cryptocurrencies at the moment, and this number has been growing rapidly.
When you study tokenomics, you examine things such as how the tokens are created, distributed, used, and valued within a specific ecosystem. The study of tokenomics and the combination of all the information can offer valuable insights and affect the incentives and behaviors of the users, investors, and developers of certain projects. Every project has its own rules, and each one influences the demand/price and value of the tokens.