When to choose Ether as your DApp's token of exchange versus creating your own in Ethereum

mykljonzunmykljonzun Member Posts: 19
Does anyone from the Ethereum team have some words of advice on the subject?

Comments

  • JasperJasper Eindhoven, the NetherlandsMember Posts: 514 ✭✭✭
    edited May 2014
    I dont really know. I tend to think that the default is to not have a subcurrency. I.e. you need a reason to do it.

    Some potential disadvantages:
    • It can start fluctuating, in value i am not sure if speculation is very stabilizing.. Pump-and-dumps are a possibility, if people can be fooled about it.
    • In the case of it being something you use to buy a service(as implied here) that is an indirection it is less fungible. It is another thing people have to keep track of.
    • You have to implement it, it takes data storage.
    • It may be 'premined' and it creates a worse deal for users.
    And advantages:
    • Speculation could dampen the change in pricing. If people think there will be a shortage of a good/service, they start stocking up, the price will go up, providing the service becomes more profitable, attracting more producers. Same but opposite if there is too much of the good/service.
    • Similar to that.. For instance a band can provide tickets that way, and get money from essentially investors, that they otherwise would not have at that time.
    • It may pay for development.
    • Some other thing to do with how the thing operates.
    By no means i mean to imply that the above is exhaustive.. About the last one, i think you could be more up-front about it and simply fee the contract. Of course 'liberators' may strip it off, but the subcurrency being in sense less up-front may make it less visible to people? In either case some non-developer can just try monetize it for himself.
  • mykljonzunmykljonzun Member Posts: 19
    Thank you. The funding question may be the primary driver for a DAO creating their own currency for their DApp. I'm working on a DApp now that may or may not benefit from having its own currency. How more or less complicated would it be to run a DApp that trades in an existing altcoin instead of a subcurrency?
  • JasperJasper Eindhoven, the NetherlandsMember Posts: 514 ✭✭✭
    If it is an Ethereum contract, trading in ethers seems to make most sense to me :) But i suppose you might want to suit altcoins/bitcoin well.

    Side chains well, claim to be able to do it.. I dont understand it well, and dont know if it is even workable. If they work, the probably work on Ethereum aswel.

    If decentralized exchanges are really convenient, or even transparent, that would be neat. But contracts are nearly functions, and if it can be done, perhaps they'd provide a protocol to deal with the exchange DAO/DO.
  • JasperJasper Eindhoven, the NetherlandsMember Posts: 514 ✭✭✭
    I forgot an important one; holders have an interest in growing the use of the particular contract. I.e. they go around talking about it.

    However, perhaps you can allow people to bet on growth.(increase) The idea being that you'd do such a bet, and go around popularizing to make it actually happen. Of course, you have to ensure you cannot pretend customers and using yourself, and still earn from it.
  • VladVlad Member Posts: 3
    In my opinion the best justification for using an internal currency is that its issuance incentivizes the creation of a valuable network that requires the token for access.

    Building cryptoeconomic systems on ethereum is attractive because ethereum allows you to issue tokens to incentivize an activity that isn't mining without sacrificing the security of the consensus. It allows you to choose an arbitrary issuance mechanism and thereby have a scalable incentivization layer so long as the behaviour it encourages creates a valuable utility, because you don't have to actually pay any of the users yourself.

    Unless the token is required for access to something that its issuance helped create, it is more of a trading card than a real subcurrency.
  • JasperJasper Eindhoven, the NetherlandsMember Posts: 514 ✭✭✭
    @Vlad So you're essentially the idea is to make 'tickets' to sets of contracts? Suppose you could even make buying the ticket automatic. However, contracts might be able to buy a ticket, and then pass messages along from others, not requiring a new ticket. Even using tx.origin doesn't help you! Someone could have people put what they want in a contract, and then poke the contract, sending all the messages with the correct tx.origin. It would be overly restrictive to require only pubkeys to pay. So i dont see how to implement it.

    Of course, you could require more tickets for greater activity. Or only allow one per block. But with that, it may just ultimately might aswell be a 'tax-like fee' on use of the contract.

    Sometimes the identity as registered with a address is actually valuable/important to the service, in that case a ticket system might be workable..
  • VladVlad Member Posts: 3
    edited May 2014
    I don't know why you think it's an issue if someone else buys the tickets on others' behalf. I don't understand the "one per block" idea, either. Here is specifically what I have in mind, though:

    https://docs.google.com/a/coinculture.info/document/d/1h9WY8XbT3cuIVN5mFmlkRJ8tHj5pJSnEpQ4__fslxXI/edit

    It isn't impossible to require tokens for use, or to route signed commands with attached fees to a DAO. I have some neat ideas in that paper for how to do it, if you can be bothered to read it. Some of the ideas have evolved a bit, but most of what I have written there isn't depreciated.
  • JasperJasper Eindhoven, the NetherlandsMember Posts: 514 ✭✭✭
    Well what i mean if you have a 'ticket' system, it is against the point if people just work around and end up paying tax in a more complicated manner instead. But the link you gave seems to be much more than that! (here is the discussion, btw) Not sure what to think of it at this point... Main worry is that it will somehow be exclusive, although it might be codable not to be.
  • mykljonzunmykljonzun Member Posts: 19
    edited June 2014
    FYI: I just posted a whitepaper on project I want to launch that would issue its own cryptocurrency via Ethereum...

    https://github.com/ideologi/whatisideologi/wiki/White-Paper

    Let me know what you think.
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