The economic model of micro-payments using sats, represented by the V4V and Nostr protocols, is building a value network. Cryptocurrency researcher Dergigi has written an article describing the combination of factors that contribute to most of the issues seen in the network, and outlines it as a paper to lay a foundation for the vision of a value-enhancing network. The Chinese version is compiled and released by DAOrayaki.
1) Incentives (failure): Human behavior is influenced by the subtle and obvious structures embedded in our systems. If incentive mechanisms fail, everything will be chaotic; 2) Constraints (technical): Currency is always constrained. The minimum payment amount is limited by the minimum currency unit. For anything smaller than this unit, we must conduct batch transactions or give away items for free; 3) Credit (inferior to cash): The problem with credit is that it poses various risks. I want to focus on a specific risk: counterparty risk. Counterparty risk is why institutions like VISA and MasterCard that deal with credit problems and their newer versions delay settlement and incur high costs because they must track everything;
4) Attention (inferior to value): There are two solutions for using IOUs as electronic currency when dealing with traditional currency, attention economy and subscription hell; 5) Consequences (non-existent): Although discussions around Bitcoin mostly focus on its limited supply and metaphors of “gold 2.0” and other value stores, few pay attention to the high-speed instant settlement part. I want to focus specifically on reducing friction, more peer-to-peer transactions, increased neutrality and system stability, and true costs; 6) Identity (optional): Identity is not singular, it is diverse. A more subtle way to solve identity issues is through reputation, expensive identity creation, and real value;
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7) Issue: Sales problems only exist in cyberspace, where JPG images can be replicated at zero marginal cost, and replicating something at zero marginal cost almost makes the supply of that item infinite. When it comes to digital works such as JPG images, mp3 files, blog articles, or similar, we must stop pretending that the files themselves are scarce or valuable. They are not scarce, the people who create them are scarce. Therefore, we must look for new pricing and monetization methods; 8) Vision: Receiving value should be negligible for those who create value; sending value to creators should be negligible for those who value valuable content; allowing content and metadata to be freely copied; allowing value to flow freely; not building barriers around content or metadata; making identity optional; allowing those who add value to participate in the flow of value; making unethical behavior expensive; providing tools and services that add value and bring happiness; using currency for monetization, not attention; selling services, not user data; reducing exit costs and building based on sats (Bitcoin’s smallest unit), not on credit bonds IUO.