One of the fundamental problems coin leadership struggles with is community participation outside of a desire to sell at a profit. Speculating and trading is the name of the game; making money is the purpose and motivation of a good majority of the alternative cryptocurrency community. Encouraging community members to actively get involved, promote and use a coin is difficult despite the positive influence it may have on long-term price. This is not a criticism, rather a reality of the demographic; designing systems that accommodate these motivations is becoming increasing important. This leads us to the questions: how do we encourage traders, speculators and ‘investors’ to participate in an alternative cryptocurrency eco-system for the mutual benefit of everyone? What if we can make using the colored coin as a currency as indirectly beneficial for participants as simply trading?
6.2: Incentive through Increased Scarcity
Initially it was thought that simply by providing and covering global 15% discounts for the largest retailers like Amazon and Newegg we had this issue covered. While it helped from a marketing perspective, it did not work as well as expected and could not compete with mining pressure. This led to envisioning a system that increased the scarcity of coins over time. The core philosophy behind this approach is to design and develop utility, services and systems that contribute in some way to removing colored coins from circulation permanently and returning them to the chest.
Purchase an item on the NXT decentralized exchange and contribute a token 0.5% purchase fee used to remove NOXT from circulation. Purchase an item on the Marketplace and expect 2%-5% of the purchase amount to be covered by Noble and removed from circulation. Have a new favorite coin that you want to have on CoinPayments and e-commerce capabilities? Help your NOXT holdings and your new favorite coin by paying for it to be listed on both services, with full payment in NOXT being taken out of circulation (the potential for 2-4+ BTC worth). These features have been crowd funded by the community, and having them used as intended to provide utility and services is a benefit to all parties involved. Every action you take reduces the available supply of NOXT, increasing its utility, demand and scarcity.
6.3: Maintaining Scarcity Initiatives at Break-even Minimum (Avoiding a Net Loss)
The concern here becomes ‘if Noble is increasingly covering a percentage of trades, fees and discounts from their own pocket, how is this sustainable long-term?’. The answer is it is not, without finding a balance between supporting scarcity and the profitability of Noble business-related projects that help fund the idea. Make no mistake, a number of exclusivity, deals and scarcity initiatives do cause a negative effect on funds and are not self-sustainable without complimenting support. It would be misleading and naïve to assume otherwise. There are a few approaches currently being refined to balance this issue:
It’s important to note that being a relatively young cryptocurrency with a small eco-system these perks and discounts are relatively manageable despite being beneficial long-term to supporters, especially pending a successful crowd fund.
6.4: Incentive through Successful Cycles
The largest incentive of 2015 for all parties involved will be moving forward continuously until the concept is proven and a successful cycle has been completed. A successful cycle could be attributed to a number of factors:
A successful cycle will mean all NOXT coins distributed via crowd fund have been used in one form or another through utility or services (digital or real-world). It will allow for a re-evaluation and refinement of planning and proposals, and if necessary for the burning and crowd funding cycle to be considered again.<< 5. Exclusivity7. Stability >>