You need some sort of cryptocurrency for this as microtransactions don't really work in the legacy system. Also by using their own token they can boot strap the ecosystem cheaply as they can mint the tokens themselves with the value accruing later after network participants are onboarded and transacting.
I spend a lot of time studying blockchain and Ethereum and wanted to clarify your remarks.
You need some sort of cryptocurrency for this as
microtransactions don't really work in the legacy
system.
Yes, you're right: Ethereum has lower transaction costs, lower non-monetary transaction costs, and ERC20 tokens are interoperable with other Ethereum-based services.
Also by using their own token they can boot strap
the ecosystem cheaply as they can mint the tokens
themselves with the value accruing later after
network participants are onboarded and transacting.
This is a common sentiment that I believe is incorrect: if a project could use ETH or USDC instead of its own token, but still function correctly, then that token is malpractice. Such tokens are a blight on the blockchain industry.
Projects like Augur and MakerDAO must have their own token or they wouldn't work at all. Augur and MakerDAO have healthy token economics.
I'm not an expert on BAT token economics, but I believe Brave would have been much better off using ETH itself or a stablecoin. afaik Brave's microtransactions don't require BAT to work and that makes BAT a bad token.
For MakerDAO, there is basically the "DAO shareholders" who profit from fees, but are the ones who will lose if the peg is not resolved. And for the other token, DAI, it needs a $1 peg and not pegged to etheruem.
Transactions take a few seconds, 10000 transactions per $.01 as well as no mining for coins so it is not a bad coin for climate change compared to say Bitcoin and the mining farms.
Perhaps what is meant by "don't work" relates more to the value/price/volatility vs actual transaction functionality.
What you describe above has to be weighed against loss of value for holding until accumulating enough to trade for $ no, as well as general fees associated with trading for $ generally?
Else what really is the point, if maintaining the value transferred isn't possible?
Stellar also supports the creation of stablecoins [1], which tend to have a consistent price relative to some other asset (Often USD).
The way stellar works is pretty smart, if I have some currency on the stellar network and you only accept some other currency, it automatically looks for people willing to exchange them to find you a good rate. So even if few people use your favorite stablecoin you can still accept payments in it.
This only used to be true. The state of the art of Ethereum has very effective microtransactions. This will improve again by orders of magnitude within the next three years.
The Lightning Network allows microtransactions on the bitcoin blockchain quickly and cheaply; since it went into production last year, over 10,000 nodes have joined and there's over $7 million in network liquidity: https://1ml.com
I'm constantly shocked by how any mention of blockchains is enough make masses of HNers look like absolute luddites. It's just another datastructure that happens to have an above-average level of hype surrounding it.
Hi, I maintained code with a Merkle tree before Satoshi picked his pen name. I’m just not impressed by the consensus algorithm. It’s not that I’m a Luddite, it’s that I understand some things about it that others don’t and will be tricked by.
In short, I see you all as a little nefarious, with a heap of woo to rival some other boondoggles we’ve recently gotten over.
It’s also one of the dumbest consensus protocols in use. It’s a compromise to get what they wanted out of blockchain but nobody will admit it. Which makes me wonder about the rest of their claims. It’s intellectually dishonest and money is involved. No thank you.
