In the past few days I have been thinking about the value and the potential of Gridcoin as a cryptocurrency a lot. It is still hard for me to understand how something like a cryptocurrency can represent value. However, when I start thinking about what gives traditional currencies their value, the result is the same. Those sheets of paper, coins or (insert here whatever represents a GRC) could theoretically have no value, their value is created by the sheer belief in their value by the people who use them. Of course, I am no economist and if one reads the previous sentence, he might pop an artery in his head. Sorry for that.
So what makes the difference between a Gridcoin and a unit of a traditional currency? Its the number of people who belief in it. If I take one Swiss Franc (yes, I am Swiss (and yes, we have a lot of those Francs)) and give it to someone on the street, this person knows what to do with it. He/She can spend it on a bottle of water, about 5kWh of electricity or a silver coin in a lucky internet auction, as I did. If, however, I go to the same person and hand them over one of my Gridcoins, they would first of all probably not even be able to receive them, and even if they did, they would not know what to do with it other than changing it into a traditional currency and buy something with that. So the problem we face is, that people do not know what cryptocurrencies are and frankly don't even want to know.
It would be great if we had a magic wand to change that, but we do not. If I look at my parents and think about explaining them about this Gridcoin stuff, they would be overwhelmed by the time I told them that they had to install a client on their laptop and they would probably never see any value in it since it is "just some nerdy internet thingy". They like to have their Swiss Francs in their bank account or in their wallet and I think that is fine and that will remain the norm for a long time to come.
Some of you may be shocked by what I just said or at least strongly disagree, but as much as I want to belief in a future of cryptocurrency as a real alternative to the traditional currencies, I don't see it coming. Just as my parents are now, there is always going to be a major part of the population that does not engage in crypto currencies for the reason that they just don't have to. There are so many different things going on in their lives that changing their monetary system is nothing they even think about.
So where am I going with this? If cryptocurrencies are not going to gain value and stability by everyone believing in them, they have to find their own way to generate value and I think Gridcoin has a huge advantage in this regard. I have read a post by @dutch about him mining GRC now and planing to use it to pay Boinc users for running his project in the future. This idea just really hits the nail on the head. For a lot of smaller research institutes or businesses it is a very expensive matter to set up their own computing units for the research they are doing or the service they are providing. They may simply not have the funding to set something like this up. So, buying some Gridcoins, creating a project and paying others for doing their computations may be a low budget option to get some research done or to at least get started.
That is the way value can be created and a real demand for Gridcoins can be generated. If they become a mean of payment for scientific computation, they will be out there on the marked following the rules of supply and demand and they will find their value. Both sides will be able to profit. Researchers get their work done and Gridcoin miners and Boinc users will get their money for the work they do. This should increase the value of GRC in the future and thereby increase the number of users dramatically, which, in return, would increase the value again.
What would have to be done to get in this direction is changing the target of the marketing. Gridcoin has already a steadily growing community and as soon as all the Boinc users can start earning Gridcoins, the supply of computational power will be solid for a start. The people that would have to be targeted are research groups, small companies and public institutions that need computation but may not be able to afford it at the time being. Those individuals are easier to target than my parents. Compared to my parents, this target group already works a lot with computers and would probably be at least a little familiar with what we would throw at them. This would avoid a lot of obstacles and give Gridcoin an opportunity to grow and maybe in the distant future even win over my parents.
I don't know if that is something the Gridcoin community as a whole has already thought about or is already pursuing this goal. I just wanted to throw my thoughts in at this point and maybe someone in the comment section has an even better idea!
Great write-up, and I 100% agree with this being the biggest value proposition Gridcoin can bring to the table at this point in time. Many different tokens, such as GNT, are all planning to do exactly what you just described. The key difference between those tokens and the GRC coin is that Gridcoin is built on top of an established research platform with coming up on two decades of development.
In terms of difficulty, which I see has been raised, in the grand scheme of things it is actually really easy to create a BOINC project. From a cold start, I got a BOINC server running, distributing work units, receiving them back and validating them all in the space of one afternoon.
The problem I am facing is that my research is a time-stepping model. This means that computations at time [t = x] have to be completed before computations at time [t = x + delta], where delta is small, can commence. As the model needs to step forward in time millions of times over, this means I would be distributing millions of tiny batches of work that would have to be 100% completed before sending out the next batch.
I am investigating accuracy tradeoffs using larger values of delta - work in progress!
Do you have publications or any other documentation of your work online? I would really like to read up on it. I am able to read almost any publications, since my university has access for everyone.
Nothing recent, primarily due to non-disclosure and rights to research output as we are externally funded. I will be publishing my PhD in the not too distant future and will link it on here.
Ok, great!
Being externally funded is not really a thing at my university since Switzerland is very generous with their funding for the federal universities. I have heard a lot about the cons of being externally funded since the results of ones research is very restricted as you mentioned. If you ever feel like it, I would really enjoy reading an article about your impressions of research funding, wether they are external or public.
Your right, belief in something gives it power [like the bible in the movie " The book of eli"]
But most people ive encountered dont want to believe in anything new, they'd rather stick to what they have or popular, and like how you said GRC is a form of payment now for science, yes that will make it grow as science will forever be expanding, something new to learn or solve everyday therefore adding value to GRC [even though its an altcoin ["fake"]] as people are scared to try new ideas, possibilities, just like the saying "the world is your oyster, open it and find out what you get"
And with gridcoin there is like 99% no losers, science gains and crypto fanatics recieve an altcoin, shoot, people were [edit what is >booncong< lol] boincing long before GRC,
What is this post you said about @dutch, i must've missed it, and sorry if this reply got too long or out of touch with your post.
😉😉😉
@dutch mentioned in one of his blog posts his idea. I think it was a post about his rig or an "introducemyself" post of his.
Ill have to find it as i would love to contribute to his research and hopefully it would get whitelisted.
I think he does not have his project set up yet, he has just described his plan there.
I meant ill have to find the post where he was talking about it.
Well this computer power for rent idea is a good one. And it is not even new since in good ole times when the mainframes were extremely expensive this behaviour has already happend. For sure this is an absolute realistic way to strenghten the basis of gridcoin and to really make a business out of the infrastructure that is already existing.
I think we could even try to get beyond that, whats currently missing and i agree with you 100% (because i got parents of my own not able to understand what iam doing) is a layer in between the technical details like installing a wallet and the real function of cryptocurrencies in general. The function for sure is paying for things you want to have, being able to give your counterparty in a transaction something which the counterparty sees as exactly of the same worth than the good he or she is selling.
What is most important is that paying must be as ( or almost as ) easy as it is right now, by simply getting the purse out or paying with plastic :) If we can define this layer in between so that the user does not need to care about technical details (like if there is an internet connection at the spot he wants to make the payment) then iam sure that cryptocurrencies will prevail. Because in the end we are living in very modern times, only the money that we are using is dating back (if we think about the first coins ) 2700 years.
Anyways, for all of you out there wanting to know more about Gridcoin in general take look at Gridcoin.
If you need any specific help setting up BOINC or the wallet, look around in Steem there is a big presence here.
Thanks @applepiie for the post and the ideas !
As I mentioned, I also see the point of usability and that being an obstacle for the general public to use GRC. However, I am not sure wether solving this problem would increase the use of cryptocurrencies, since I don't see the need for several currencies to exist in parallel. Sure, there are Dollars, Swiss Francs, Euros and so on, but we only use one at a time. I don't use Euros ever in Switzerland and I don't think a lot of Americans pay in Swiss Francs frequently. The currencies have different fields of application so to speak. One is used to pay here, and the other one is used to pay at a different country.
I therefore think that cryptocurrencies need their own sector in the currency world and may not be able to compete with the traditional ones too soon.
A currency only has value because the users of it 'believe' or 'trust' it has that value. You don't want your boss to pay you in Myanmar Keyat (yes, those exist) because you have no knowledge about it, you won't trust it.
This link gives a nice intro: https://www.thoughtco.com/why-paper-momey-has-value-1146309
I agree your parents like their Franc better. But just think about the hyperinflation in the Weimar Republic. The value of the paper was worth more that the money itself. People started weighing money:
https://keripeardon.wordpress.com/2013/06/01/wheelbarrows-of-money-and-the-weimar-republic/
If you look at it that way it's not that hard to look inverse at it and think that coins have value. I don't see them replacing money, I see them side by side.
I responded to this post, but my response turned into something way longer than a comment = ).
Regarding your idea,
I think it's the perfect direction for Gridcoin. It will probably take some time to put together such an ambitious endeavor, so let's get going!
My full response is here
Great post
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