blockchain, economic musings 

CW because blockchains have polarizing opinions here.

Imagine a blockchain that manages domain names. I register a domain and pay actors to respond to DNS queries. In this way, the blockchain provides real value.

In order to pay for services, most blockchains implement a "gift card" system (coin). I do work, it "mines" a coin, I sell coins to other buyers who repeat the cycle.

Theoretically this creates a decentralized marketplace incentivizing competitive rates.

blockchain, economic musings 

In practice, we've seen people treat those gift cards (coins) like investment assets and hoard them which constrains supply and artificially inflates prices. The service might cost pennies, but if buyers are paying dollars per coin (or hundreds/thousands in some cases), who do workers sell to? Obviously those who pay more.

Buyers have to pay exorbitantly more for a relatively cheap service because "investors" sabotaged the buying power.

blockchain, economic musings 

Ignoring pump and dump, corpos aren't behind it, it's your average joe on coinbase chasing a shiny logo he doesn't even understand, tweeting it up like some dystopian pyramid scheme.

blockchain, economic musings 

Some countries have scheduled inflation on their currencies to discourage hoarders and keep money moving (I think the USD has planned inflation of ~2% per year?) but I haven't heard blockchains talking about this. Which surprises me considering just how much money is already saturating/sabotaging the market.

Treating coins like assets seemingly undermines the usefulness of any service-based crypto.


blockchain, economic musings 

That said, I have no idea what I'm talking about. Maybe I'm missing something obvious and blockchains will do just fine. But from where I'm standing, I just don't see how blockchains that offer coin assets can be successful or competitive in the long term.

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