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May 05, 2013, 11:47:34 AM |
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In my mind what makes Bitcoin beautiful is not just the genius crypto, it is just as much the balance of the different incentives that encourages community participation. Lets take a look at these:
1 .Mining incentivices parisipation in network infrastructure creation and participation, both now and in the future. Now mostly for the reward of finding new blocks 25 Btc, but also in the future for claiming the spent fees as a reward for finding the next block.
2. Participation and use of Bitcoins incentivises the increased use of fees for transactions, the genius of having a block interval of approx 10 minutes. Increases the likelihood of people spending fees to speed up the transaction witch again supports the incentives in point 1. Taking Litecoin where transactions are much faster, I see the potential problem that incentives for paying fees will not be there in the same way witch in turn could weaken the incentives for keeping the infrastructure up.
3. For a bitcoin holder there is also the self preserving incentive to participate just to protect the value of your bitcoins. This holds true I guess for many if not all crypto currencies, but I have a feeling that the influence of this effect will be affected by the strength and success of the other incentives.
When it comes to ripple I can only see the influence of point 3 witch effect in turn is minimized by the lack of incentives 1 and 2. This will in my opinion likely be leading to tipping the balance of incentives in the direction of OpenCoin, witch already from the beginning needs to build most of the infrastructure to get it up and running. If this assumption holds true this will definitely increase the likelihood of OpenCoin gaining way to much control of the infrastructure.
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