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I've always thought the sweet spot for NFTs/cryto is not these random coins run by random developers. The sweet spot would seem that it enables already trusted

I've always thought the sweet spot for NFTs/cryto is not these random coins run by random developers. The sweet spot would seem that it enables already trusted big brands to make their own de-facto corporate currencies. Sort of like a next generation loyalty program/gift card/airline miles program on steroids. Nike would gift you some Nikecoin for every purchase of Nikes you buy. You can then gift Nikecoin to your friends or buy more Nikes with them. Unlike airline miles, the ledger is openly tracked and the companies can't devalue them every year like airlines do. At the extreme end I could see an application where Nike lets people trade Nike sneaker futures. Nike would actually store the physical Nikes in some climate controlled warehouse. Sort of like oil futures where most traders wouldn't know what to do with an actual barrel of oil. The benefits for Nike are that its sort of like arcade/casino virtual bux - loyal consumers disassociate Nike purchases from hard earned USD and spend more. Nike traders don't have to pay taxable gains until they convert to USD. And you lock-in money into the Nike ecosystem.

choward 5y ago
> The sweet spot would seem that it enables already trusted big brands to make their own de-facto corporate currencies. Sort of like a next generation loyalty program/gift card/airline miles program on steroids. I don't see any problem NFTs solve that these loyalty problems don't. > Unlike airline miles, the ledger is openly tracked and the companies can't devalue them every year like airlines do. Are you picturing the cryptocurrency being tied to the dollar? Otherwise, Nike could make things cost more Nikecoin than dollars over time which would effectively be the thing as devaluing Nikecoin. They still control the currency because they control the economy they can be spent into. > At the extreme end I could see an application where Nike lets people trade Nike sneaker futures. Nike would actually store the physical Nikes in some climate controlled warehouse. So they would store the shoes on a centralized location that they control? What problem does a decentralized system have here? Why not just have the storage warehouse keep track of who owns what and allow ownership transfer? This reminds me of the people who store their alleged decentralized currency with a centralized bank.
- somethoughts 5y ago
  I don't see any problem NFTs solve that these loyalty problems don't. - Primarily the trust problem. For loyalty rewards programs its basically free money the brand provides based on miles traveled/products bought. You'd never actually convert large sums of solvent USD (>$25K) into the Nike rewards program though because then you have to start thinking about whether Nike be around in 25 years, do I trust Nike's backend unaudited IT systems to not screw up, if Nike stops making cool stuff my $25K is stuck in their rewards program. However, with a Nikecoin if you knew multiple 3rd parties (i.e. Citibank, Coinbase, etc.) were validating the Nikecoin ledger and could convert from Nikecoin back to USD there's more trust that could be developed. - Another scenario is transferring Nikecoin between friends without Nike having to manage the transfer - And perhaps group/syndicate buying - i.e. Constitution DAO style? - In-game tokens? Imagine you could wander around PokemonGo/Roblox to find Nikecoins at which point you could redeem them for sneaker coupons or jump through hoops to convert to USD. Are you picturing the cryptocurrency being tied to the dollar? Otherwise, Nike could make things cost more Nikecoin than dollars over time which would effectively be the thing as devaluing Nikecoin. They still control the currency because they control the economy they can be spent into. - Just spitballing but yes I'm picturing it the same way BTC/Dogecoin/Shibacoins are tied to the USD in that you as Nikecoin holder you could freely convert back and forth at the going exchange rate and the number of Nikecoins is run with a predefined supply algorithm. - I could also picture a standard set of Nikes always tied to a set Nikecoin price so Nike can provide some stablecoin like price stability. So they would store the shoes on a centralized location that they control? What problem does a decentralized system have here? - Traders can trade the digital version ad naseum until the final owner is found. The final owner is the one who wants to have the physical version be shipped to their home address for actual consumption/wearing. - There are probably more traders than final owners for most Nikes. There are also more people who would know how to bid for collector grade Nikes using virtual Nikecoin than know how to store a collector grade Nikes in a climate controlled warehouse.
  - choward 5y ago
    > if Nike stops making cool stuff my $25K is stuck in their rewards program. > > However, with a Nikecoin if you knew multiple 3rd parties (i.e. Citibank, Coinbase, etc.) were validating the Nikecoin ledger and could convert from Nikecoin back to USD there's more trust that could be developed. I don't follow your logic here. Why would Nikecoin have any value of Nike went out of business? > Just spitballing but yes I'm picturing it the same way BTC/Dogecoin/Shibacoins are tied to the USD in that you as Nikecoin holder you could freely convert back and forth at the going exchange rate and the number of Nikecoins is run with a predefined supply algorithm. My bad. I should have specified I meant a fixed exchange rate but you're saying it's a floating exchange rate. This means what I said before is true. Nike will have to price their items in terms of both dollars and Nikecoin which means they could use that to manipulate the value of Nikecoin. > I could also picture a standard set of Nikes always tied to a set Nikecoin price so Nike can provide some stablecoin like price stability. Yeah, but now you're back to trusting Nike.
nonameiguess 5y ago
Those exist already. Gift cards, store credit, Disney dollars. They must even have some working counterfeit and double spend prevention or people would have been exploiting them. All crypto coins seem to add is being issued and stored on a blockchain, but that doesn't seem necessary if there is a central authority issuing the official coin anyway. How do companies not have the ability to devalue them? They have total pricing control over the only physical good you can buy with them.
- somethoughts 5y ago
  I'm picturing it the same way BTC/Dogecoin/Shibacoins are tied to the USD in that you as an owner can freely convert back and forth at the going exchange rate and they would be run with a predefined supply algorithm. And yes Nike would have the ability to devalue the Nikecoins but it'd actually not be in there best interest to do so because Nikecoin holders would then just cash out and offramp to USD. You'd then have negative PR associated with the brand versus free PR when Nikecoin increased in value. Also if Nike itself maintains ownership of a portion of the ICO, then they'd be incentivized not to devalue the Nikecoin.
Apofis 5y ago
Splendid... all the crypto hubbub is finally revealing it's true value. Loyalty rewards. I'm going to the bank.

choward 5y ago

> The sweet spot would seem that it enables already trusted big brands to make their own de-facto corporate currencies. Sort of like a next generation loyalty program/gift card/airline miles program on steroids. I don't see any problem NFTs solve that these loyalty problems don't. > Unlike airline miles, the ledger is openly tracked and the companies can't devalue them every year like airlines do. Are you picturing the cryptocurrency being tied to the dollar? Otherwise, Nike could make things cost more Nikecoin than dollars over time which would effectively be the thing as devaluing Nikecoin. They still control the currency because they control the economy they can be spent into. > At the extreme end I could see an application where Nike lets people trade Nike sneaker futures. Nike would actually store the physical Nikes in some climate controlled warehouse. So they would store the shoes on a centralized location that they control? What problem does a decentralized system have here? Why not just have the storage warehouse keep track of who owns what and allow ownership transfer? This reminds me of the people who store their alleged decentralized currency with a centralized bank.

somethoughts 5y ago
I don't see any problem NFTs solve that these loyalty problems don't. - Primarily the trust problem. For loyalty rewards programs its basically free money the brand provides based on miles traveled/products bought. You'd never actually convert large sums of solvent USD (>$25K) into the Nike rewards program though because then you have to start thinking about whether Nike be around in 25 years, do I trust Nike's backend unaudited IT systems to not screw up, if Nike stops making cool stuff my $25K is stuck in their rewards program. However, with a Nikecoin if you knew multiple 3rd parties (i.e. Citibank, Coinbase, etc.) were validating the Nikecoin ledger and could convert from Nikecoin back to USD there's more trust that could be developed. - Another scenario is transferring Nikecoin between friends without Nike having to manage the transfer - And perhaps group/syndicate buying - i.e. Constitution DAO style? - In-game tokens? Imagine you could wander around PokemonGo/Roblox to find Nikecoins at which point you could redeem them for sneaker coupons or jump through hoops to convert to USD. Are you picturing the cryptocurrency being tied to the dollar? Otherwise, Nike could make things cost more Nikecoin than dollars over time which would effectively be the thing as devaluing Nikecoin. They still control the currency because they control the economy they can be spent into. - Just spitballing but yes I'm picturing it the same way BTC/Dogecoin/Shibacoins are tied to the USD in that you as Nikecoin holder you could freely convert back and forth at the going exchange rate and the number of Nikecoins is run with a predefined supply algorithm. - I could also picture a standard set of Nikes always tied to a set Nikecoin price so Nike can provide some stablecoin like price stability. So they would store the shoes on a centralized location that they control? What problem does a decentralized system have here? - Traders can trade the digital version ad naseum until the final owner is found. The final owner is the one who wants to have the physical version be shipped to their home address for actual consumption/wearing. - There are probably more traders than final owners for most Nikes. There are also more people who would know how to bid for collector grade Nikes using virtual Nikecoin than know how to store a collector grade Nikes in a climate controlled warehouse.
- choward 5y ago
  > if Nike stops making cool stuff my $25K is stuck in their rewards program. > > However, with a Nikecoin if you knew multiple 3rd parties (i.e. Citibank, Coinbase, etc.) were validating the Nikecoin ledger and could convert from Nikecoin back to USD there's more trust that could be developed. I don't follow your logic here. Why would Nikecoin have any value of Nike went out of business? > Just spitballing but yes I'm picturing it the same way BTC/Dogecoin/Shibacoins are tied to the USD in that you as Nikecoin holder you could freely convert back and forth at the going exchange rate and the number of Nikecoins is run with a predefined supply algorithm. My bad. I should have specified I meant a fixed exchange rate but you're saying it's a floating exchange rate. This means what I said before is true. Nike will have to price their items in terms of both dollars and Nikecoin which means they could use that to manipulate the value of Nikecoin. > I could also picture a standard set of Nikes always tied to a set Nikecoin price so Nike can provide some stablecoin like price stability. Yeah, but now you're back to trusting Nike.

nonameiguess 5y ago

Those exist already. Gift cards, store credit, Disney dollars. They must even have some working counterfeit and double spend prevention or people would have been exploiting them. All crypto coins seem to add is being issued and stored on a blockchain, but that doesn't seem necessary if there is a central authority issuing the official coin anyway. How do companies not have the ability to devalue them? They have total pricing control over the only physical good you can buy with them.

somethoughts 5y ago
I'm picturing it the same way BTC/Dogecoin/Shibacoins are tied to the USD in that you as an owner can freely convert back and forth at the going exchange rate and they would be run with a predefined supply algorithm. And yes Nike would have the ability to devalue the Nikecoins but it'd actually not be in there best interest to do so because Nikecoin holders would then just cash out and offramp to USD. You'd then have negative PR associated with the brand versus free PR when Nikecoin increased in value. Also if Nike itself maintains ownership of a portion of the ICO, then they'd be incentivized not to devalue the Nikecoin.

Apofis 5y ago

Splendid... all the crypto hubbub is finally revealing it's true value. Loyalty rewards. I'm going to the bank.