We Need More Crypto Economics Posts

Cryptocurrency News and Public Mining Pools

We Need More Crypto Economics Posts

Beyond all the news and market updates this sub is lacking in content that truly defines a crypto's long-term ability to function. There's a bunch of post about how market cap provides information about growth potential. There's post's about how this crypto is gonna overtake that crypto, because their faster. There's post's about scalability and how this crypto will have an ecosystem larger and more efficient than other cryptos. Most recently the majority of posts seems to be related to teaching beginners by saying use these sites, or earn coins from here.

What I almost never see on this sub is the economics behind the crypto, how will that ecosystem function and thrive. What will give value to the crypto, low coin supply, security, TX speed, first name recognition, functionality, dApps???

All of these factors are ultimately going to decide how well a crypto will function. How will the native coin for the ecosystem be consumed, burnt, or minted? Will the ecosystem derive value from an inflationary or deflationary system? Can the ecosystem continue to pull in new consumers, while providing strong value to those who have been invested for awhile? A coin can be fast, secure, or have great adaptability, but this is just one factor into what that crypto needs to overcome to be successful.

Adoption of a crypto is a big thing right now, so everyone is trying to bring consumers to their ecosystem by claiming to be the best. It's like being in the wild west and getting shot at with hype headlines and claims. Do a bit of digging into these cryptos and they really aren't doing much more than that. Long-term like in 5-10 years what's going to separate the players who make it out on top???

Their Ecosystem, which will be defined by their Economics!

Let's look at ETH to start they have first name recognition with dApps so they have the biggest market. ETH isn't going anywhere, if a crypto was going to take it's spot as #2 it would have already happened.

ETH uses mining for minting, security, & TX processing. Miners are rewarded with ETH as incentive to keep the network secure and running. All transactions on ETH require GAS which is a varying number of GWEI, 1GWEI=10-9 ETH. Currently they have an unlimited coin supply so ETH is inflationary. dApps require holding ETH to function, with inflation that means the value of the dApps will shrink overtime. This is the basic economic structure of ETH.

What are the issues of this structure?

Right now there's Soooooo many dApps working in the ETH ecosystem their bloated AF causing TX to slow & GAS prices to be massive. Now unless you got in early and made lambo gains these fees hurt you as a consumer of the dApps. The worst part is that the 2-3k dApps that are running on ETH are gonna stay there, sure many will die out over time simply from not making enough money. But there's gonna be enough that stay in that ecosystem just because they can.

ETH is also changing from an endless supply to a limited supply with ETH2.0. This is gonna close off the system to many low level consumers, as the price of 1 ETH rises so will GAS fees as they are tied into value of the coin. This effectively closes the doors for people wishing to develop any Dapp running on the EVM. In the short term ETH will benefit but long term closing off outside consumers is gonna hurt their ecosystem. ETH 2.0 isn't going to fix this issue just by switching from miners to staker's, TPS may become quicker but gas fees will keep rising. ETH now having a deflationary value will keep pushing ETH higher and in turn gas fees higher. Bottom line ETH eventually becomes an oasis that's difficult to gain entry into, long term the only way to get in will be to use other ecosystems as a stepping stone to generate value to gain access.

A lot of ecosystems follow the ETH path, DOT, ATOM, ADA, etc. Each of these ecosystems though have looked at these issues and made changes that they believe will make for a better stronger marketplace than what ETH currently has. These are the discussions we need to be having more of in this sub. These are the systems that are created with the base protocols, these are the systems that will not change without radically changing how the crypto functions. I understand that the ecosystems I listed have been around for a bit but there's always new crypto that's improving on the old.

submitted by /u/plurBUDDHA
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