When you think about what is the real innovation of blockchain, many people think that it is privacy or freedom, or a way to dissociate your assets from central bank issued currencies and inflation. It’s my opinion that the most interesting application of blockchain is the democratization of economy creation. By this, I mean that anyone can create an economy, and it’s value is emergent from how many people want to transact within it.
This is not so different from what has happened with short quotes as per Twitter, or video posts (youtube). The key factor in creating this value is of course scale. Having a transaction fee required for even the earliest of adopters kills this adoption in the womb, giving it no chance to scale (achieve value). Why should you have to pay “real” money to transact something that is “worthless”?
The reason that this question occurs to me is that I have twice now wanted to create or help others to create token economies for relatively low-value applications. The most current being a friend who wants to create an incentive system to encourage participation in a school event. I’m not sure if the name NEM, the New Economy Movemement is a reference to such a new, democratized economy or not, but the name implies it in my interpretation. It is certainly not achieving it through it’s current implementation.
To restate a scenario put forth by Andreas Antonopolous where students create their own coins and trade them with each other, a teacher could want to issue tokens to students for good behavior and allow the students to trade these assets with each other and trade/save up for the prize that they want. This is a totally harmless and quite fun application of blockchain but it can never happen with most blockchains because each participant would be required to hold some of the blockchains native currency in order to transact.
Why not allow users to specify their transaction fee as zero, knowing that if there was no free space in the block, that their transaction would have to wait until there was a free space. If the transaction does not go through in x blocks, the tokens are released back to origin.
The blocks are being processed anyway, why not allow some freeloaders to take the free space? Eventually, if the economy proved worthwile, people would be willing to pay to ensure that their transactions included in a sooner block. This removes one of the larger barriers to entry for early adoption of blockchain based economies much like the freemium business model which works well for many internet-based products. It gives the masses some wiggle room to play with and attempt to scale their own economies.