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Except the early adopters don't need to actually participate in the network, just acquire and hoard tokens. There's almost no connection between the profits and

Except the early adopters don't need to actually participate in the network, just acquire and hoard tokens. There's almost no connection between the profits and the actual advocacy, resources and risks required for the network to succed. So the incentive structure is quite different from, say, the stock market or even a kickstarter. It's more like a tradeable Ponzi with strong incentives to overpromise and overhype in the early phase, and to get out when the valuation approaches the claims without actually delivering anything more than yet another speculative asset.

foota 8y ago
You could find a way to associate someone's activity with positive signals, like give them credits for generating positive value in the network. Detecting positive value is difficult though.
- mlthoughts2018 8y ago
  But organizing “payment” in the form of a cryptocurrency is no different than just depositing money in their bank account. In some cases it would be: payment that evades government detection, payment that allows network participation to be anonymous, etc. The trust issue would not be part of it in these cases, from a business perspective. I guess I mean that predicating some network-effect-needing business on blockchain, for these reasons, still just seems like hype. Unless the business is fundamentally about anonymously being compensated in some way, then other existing financial institutions solve the problem (with just as much trust in 99.99999% of scenarios) in a far simpler way.
Jommi 8y ago
Your final comment doesn't really work out. Yeah, by over-promising and hyping you could raise the price of your coin, but it doesn't mean your volume will rise as much. You cant just liquidate everything at once and get anything as close as what a simple Q * P calculation would do for you. So that's why you work on your network, create value in it. Then later on the line, you become obscenely rich as your token's liquidity is good enough to live with forever. That's what people calling Ponzi/scam are missing. The short-term profits are nothing compared to the LIFECHANGING profits of being the founder of a network protocol.

foota 8y ago

You could find a way to associate someone's activity with positive signals, like give them credits for generating positive value in the network. Detecting positive value is difficult though.

mlthoughts2018 8y ago
But organizing “payment” in the form of a cryptocurrency is no different than just depositing money in their bank account. In some cases it would be: payment that evades government detection, payment that allows network participation to be anonymous, etc. The trust issue would not be part of it in these cases, from a business perspective. I guess I mean that predicating some network-effect-needing business on blockchain, for these reasons, still just seems like hype. Unless the business is fundamentally about anonymously being compensated in some way, then other existing financial institutions solve the problem (with just as much trust in 99.99999% of scenarios) in a far simpler way.

Jommi 8y ago

Your final comment doesn't really work out. Yeah, by over-promising and hyping you could raise the price of your coin, but it doesn't mean your volume will rise as much. You cant just liquidate everything at once and get anything as close as what a simple Q * P calculation would do for you. So that's why you work on your network, create value in it. Then later on the line, you become obscenely rich as your token's liquidity is good enough to live with forever. That's what people calling Ponzi/scam are missing. The short-term profits are nothing compared to the LIFECHANGING profits of being the founder of a network protocol.