Crypto Knowledge for the Day
There are a handful of coins that are using a multi-currency approach to create different incentives to address concerns around single currency Blockchain incentives to mine, spend, buy.
What do I mean?
Sometimes there are incentives to mine (putting you computer to work and being rewarded in coin) but it gives no direct incentive to buy or sell so velocity doesn’t develop.
Staking (holding coin and being rewarded for leaving your computer on and connected) creates an incentive to buy and hold but discourages spending.
Some blockchains rewards you for frequency of transactions (I think this is called Proof of Burn) but you don’t want people spending just to spend too much (you know that whole mv = pq thing )
So the thought is if these incentives are spread across multiple currencies different currencies can play different roles (store of value vs medium of exchange, kinda like the relationship between gold and US Dollar as of late)
3 of these coins are…
Vericoin/Verium – Vericoin has much faster transactions and growing supply making it great for exchange Verium is much more limited and slower making a better holding currency/store of value.
Breakout Coin/Breakout Stake/Siscoin – Breakout Coin is a currency meant for gaming but its Blockchain is maintained by rewarding people with Breakout Stake for staking and siscoin for Mining.
NEO/GAS – I think you mine NEO but if you hold it you get a regular dividend in the form of GAS, a seperate currency.
The goal in each is to create the right mix of incentives to maintain the decentralized network for efficient payments.