MLM companies marketing cryptocurrency coins are getting a bad rap from the cryptocurrency industry, and probably for a good reason. They all sing the same song… buy our coin now while it’s cheap and private because when we take it public it will be worth tens or hundreds of dollars and you will be rich. They often point back to 2013 when bitcoin reached over $1200 and say its too bad you missed the bitcoin boom, but now you have a second chance with our coin that is going to be the next big bitcoin.

There are 3306 publicly traded cryptocurrency coins listed on www.cryptocoincharts.info, but none of them have produced the sustainable results claimed by the MLM Cryptocurrency companies. It just hasn’t and doesn’t work that way. These companies make the mistake of thinking that if a lot of people own the coin then it will have value and its price will increase.

The problem is that all the coin holders acquired the coin for speculative reasons hoping it would increase in value and they could cash out big time. A large base of users looking to cash-out does not create value for a coin. A coin will only increase in price if it has some utility for which consumers receive benefits. These consumer benefits drive buyer demand, which in turn increases the price. People must have a good reason to buy and use cryptocurrency before it will rise in price.

There is a recent coin that has sustained steady growth from fifty cents to over twenty dollars in less than 6 months. Take a look at the Ether (ETH) coin, which is the internal currency of the Ethereum development platform. Programmers can build and run block-chain applets on Ethereum. They pay Ethereum for the computing cycles in Ether coins. Ether coin has a real utility for which its users receive benefits, thus increasing the demand and the price.

Just having merchants that will accept a coin does not increase the value of the coin. It actually does just the opposite, it gives the existing coin holders a way to sell their coins, which decreases the price. The price will increase only when people buy the coin to use it for some benefit. This is the basic principle of Supply and Demand effecting all publicly traded assets. Take housing for example, right now in many parts of the United States houses are selling rapidly in a few days or less. There is a seller’s market with tremendous buyer demand and it is forcing many people to offer above listed prices for any hope of getting the house.

But here’s the real problem with MLM companies that sell coins as there product. When and if their coin goes public people can then buy the coin outside of the company at the market price. There is no margin for paying sales commissions or generating profits directly from the sales of a public coin. MLM companies typically need a 7x – 10x markup on the cost of their products to pay out their lucrative sales bonuses. No one is going to pay an MLM company 7 – 10 times the public market price for a cryptocurrency coin. The company is dead with nothing to sell.

If an MLM company actually had a legitimate cryptocurrency and could take it on the public market, the company would be dead if they are only selling a coin. That is what people are paying for despite the company’s thinly veiled products.

2015 saw over $1B pumped into the cryptocurrency industry by venture capitalists. So where did all this smart money go? Not one dime went into a coin. Instead they all invested in the infrastructure supporting cryptocurrency. They invested in public exchanges, crypto-wallets, security companies and payment processing companies. The real long term income opportunity is in the capitalization of the mainstream adoption and use of cryptocurrency.

So, you can ask a simple question of any “next big” cryptocurrency coin. What is its purpose? What benefit will it give people? Why would anyone buy your coin over bitcoin, or use your coin over fiat currency or credit/debit cards?

Most MLM cryptocurrency companies talk about increasing prices, but never about how they will delivering value to the marketplace to drive buyer demand.