Despite the name, only a few cryptocurrencies are attempting to replace the traditional functions of currency – i.e. storing value or buying stuff. Most are projects aiming to tackle a real world problem – transferring data files around the globe, for example – and draw their value from how much demand there is for that action. So how do I value a crypto token? Cryptos typically pay no income to the holder. They’re more like a lump of gold that just sits there, rather than a stock or a bond that generates a steady flow of dividend or coupon payments. So most people buying crypto are taking a punt on the likelihood that a certain token will be widely used and hence highly sought after. The most common theme is cryptoprojects proposing to apply blockchain technology to established business areas. The idea is that these projects will disrupt existing industries through the power of decentralized blockchain technology. You can think of this as similar to how Uber disrupted the taxi market and captured a lot of its value (though of course Uber didn’t use the blockchain…). How do I evaluate a project? The blockchain hype has led a lot of projects to try to apply the technology in situations where it doesn’t make sense. This is the first thing that needs to be considered. Is there an actual need for blockchain in the area being addressed?