I think this is a great discussion.
By removing the value of the token the OP may have removed
or rendered optional some required foundations for a crypto...
and a lot of other human endeavors.
The theoretical technology indicates that a desire must exist
to transmit value.
So it follows that the mechanism must exist.
And that mechanism must persist.
How about this:
Suppose we have a technology at our disposal where we can
communicate or contact people or show them what we see, or
have seen?
Everyone finds this to be a great idea, let's have that.
Must the underlying technology have any value?
Short answer - yes, it must, because people are unlikely
to go turn rocks into gold nano-filiments in any sort of
usable volumes just because they felt some whimsy.
Email and videos would have a hard time existing if not for
the infrastructure, which costs. Somewhere in every scheme
there must be something someone wants, or why bother?
So Incentivization is crucial - yet your theoretical technology can
be spun up by anyone, offered by any party.
What dictates success of any such offering? Lots of factors,
but the basic human drive to enrich one's self must be taken
into account, otherwise only those directly enriched will bother
with it. Voluntarily.
But a lack of incentives will surely lead to failure,
including for bitcoin when the subsidies of new coins fall off,
as lucasjkr mentions. With luck the taper will be sufficient
to see it through, we'll see how that works starting next year...
Reducing signal/noise and shenanigans is important as well:
The function of native tokens is not just to incentivise miners, but also to prevent spamming blockchain with infinite-loop transactions/contracts (afaik).
Dinofelis, can you explain further?:
This is a very important point. You cannot secure any thing on a block chain of which the market cap is much lower than the things you want to secure. Indeed, the cost of the proof of work (or the proof of stake for that matter) is of the order of the market cap (or lower). To attack the chain, you need, in the worst case, about to invest the whole market cap (you then redo all of the proof of work). Now, for the currency itself, that would of course be ridiculous: spending more than the total market cap of all coins, to be able to attribute yourself some. But if there are things in that chain that are worth much more than the market cap, then that might very well be worth the difficulty.
If the market cap of bitcoin is now estimated at, say, $ 4 billion, then that comes down to saying that with about $ 4 billion, you redo all the proof of work (if the mined coins were mined at the price they were worth). That means that someone able to plonk down, say, $6 billion, can redo the entire bitcoin block chain. Of course, that wouldn't be worth it. But if that chain contains a contract worth $50 billion, then that changes things: if it is worth to you $50 billion to change that contract, then plonking down $6 billion is a good deal.
So the bitcoin block chain is not more secure than about its market cap.
...because the combined value of all the assets of a municipal records dept
including salaries, building, land etc. does not even come close to
the value of the property recorded therein. The Blockchain is a (hopefully)
immutable abstraction of wealth, among other things.
About this:
I can give an example of what the OP is talking about. Think of a colored coin or Counterparty asset that represents USD. It is built on top of the Bitcoin blockchain, and can transfer USD$1,000,000 as a 0.0001 BTC token. The only problem, and this may be a big one, is in securing this transaction. The Bitcoin network sees this as the sending of 0.0001 BTC, nothing more. It's the colored coin or Counterparty layer on top of Bitcoin that interprets it as something more. So any security features that rely on amount of Bitcoin being sent, such as how many confirmations to wait for, will be rendered unsafe. Your seemingly small 0.0001 BTC transfer may have needed only 0 or 1 confirmations, but the fact that it actually represents USD$1,000,000 means it would be well worth the effort to perform a double spend with so few confirmations.
To summarize, you run the risk of having less security when you override the meaning of a BTC transaction.
Seems like any sidechain worth its salt would provide the security for whatever
they are doing. The part where the bitcoin blockchain is involved is just what gives
the side chain more accepted, world-wide legitimacy, ultimately.
If a car manufacturer runs their own blockchain and generates all sorts of identifiers
for a new car, binds them to the car's electronic brain, hashes them into one of their
block and then registers that block via a miniscule amt to the btc blockchain it
seems to me that security is enhanced because 2 different chains must be compromised.
I either disagree with this, OR I'm not understanding:
100% decentralisation has more to do with ideology than actual usefulness IMHO.
EXACTLY! I tried to get this point across so many times, to no avail. Everyone on this forum seems to think that decentralization will bring about some magical utopia, and that a government/centralized crypto cannot work because it's not decentralized. I think they need a reality check.
Decentralization is also crucial because therein lies fault tolerance,
where 'fault' is spelled: attempts to deny/control/be overbearing,
aka governments. Distribution means if China wants to stifle the
network... well, go ahead and try. As johnyj mentions,
"US can not force Germany to use USD as currency..."
People will do what people do, like censored Iranians circumventing
their ISP's and accessing the world anyway.
Blockchain technology itself worth nothing, because once invented, you can duplicate it thousands of times. Anything with unlimited supply will definitely worth nothing
But bitcoin is limited, and the cost to mine coin and maintain the network is very high, that indicated the competition to get bitcoin is also very high. Without that huge amount of infrastructure investment, the bitcoin blockchain is as useless as thousands of other altcoins, just some lines of code in github, a freeware
And I have never understand that smart contract thing, how could you ensure the validity of the promised assets in those contracts? These contracts have no legal validity and the counter party can just run away or claim to be hacked as we have seen many times in this space. The only thing blockchain can ensure is the ownership of bitcoins, if bitcoin worth nothing, then those ownership will have no meaning
So the most important thing is bitcoin's blockchain, you can not separate these 2 concepts
My understanding is limited, but this is a problem ethereum proposes to solve.
The assets are verifiable through the chain and the code which deals with
those assets is also verifiable. And immutable except to those with the keys.
OP says:
"Correct me if I'm wrong but Ethereum and Ripple and not dependent on their native cryptotokens for their network to work."
My understanding is that ethereum is consumed by the code over time - run out of ether, code evaporates. And there is some
limited amount of ether, but mining it is asic resistant.
However, my understanding is quite limited on the topic, could be wrong.
Bitcoin is beautiful because it encapsulates so many aspects of modern life,
seems like your question illuminated a lot of the beauty.
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