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#3 is an extremely important point that most people just gloss over when looking at blockchain use cases. A blockchain should only be used if immutability is es

#3 is an extremely important point that most people just gloss over when looking at blockchain use cases. A blockchain should only be used if immutability is essential. If immutability is essential people will pay a premium for that service. Thus a token becomes necessary because it is the tool which users interact with the immutable ledger while simultaneously the tool that creates the profit incentives for nodes to secure the chain.

abakker 8y ago
Yes, that is true, but, remember that financial/profit incentives are not the same as economic incentives. Profit incentives tend to be necessary when the work needs to be done, but the utility of doing that work is not symmetric. I.e. mining on the bitcoin blockchain provides me no utility, but is needed to generate transaction blocks, and so the tokens provide me a financial incentive to mine. However, if I just buy a bitcoin, I have a speculative financial investment if the value of bitcoins goes up and that is my only purpose in holding them. If I plan to actually transact in bitcoins, then owning a bitcoin gives me an economic benefit: the ability to transact with it. If the financial incentive of this blockchain is to create tokens that are meant to generate either financial incentives for nodes/miners and the tokens themselves are held as equity, then that's fine, but, those tokens don't seem to be a huge financial incentive right now. The alternative is that this blockchain offers economic incentives for developers because it solves problems in a useful and functional way. if it is useful and functional then it is not clear that it needs a separate financial motivator, and it is also not clear that having a financial motivator that has a value susceptible to speculative investment is even a good thing. In short, why add a financial motivator if there can be an economic motivator? We do not expect separate financial motivators to use mySQL. In fact, I'd say a lot of the benefits of open source are that there are only economic/utility based motivators and not financial ones.

abakker 8y ago

Yes, that is true, but, remember that financial/profit incentives are not the same as economic incentives. Profit incentives tend to be necessary when the work needs to be done, but the utility of doing that work is not symmetric. I.e. mining on the bitcoin blockchain provides me no utility, but is needed to generate transaction blocks, and so the tokens provide me a financial incentive to mine. However, if I just buy a bitcoin, I have a speculative financial investment if the value of bitcoins goes up and that is my only purpose in holding them. If I plan to actually transact in bitcoins, then owning a bitcoin gives me an economic benefit: the ability to transact with it. If the financial incentive of this blockchain is to create tokens that are meant to generate either financial incentives for nodes/miners and the tokens themselves are held as equity, then that's fine, but, those tokens don't seem to be a huge financial incentive right now. The alternative is that this blockchain offers economic incentives for developers because it solves problems in a useful and functional way. if it is useful and functional then it is not clear that it needs a separate financial motivator, and it is also not clear that having a financial motivator that has a value susceptible to speculative investment is even a good thing. In short, why add a financial motivator if there can be an economic motivator? We do not expect separate financial motivators to use mySQL. In fact, I'd say a lot of the benefits of open source are that there are only economic/utility based motivators and not financial ones.