Will blockchain networks with zero incentives survive in the long term?

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Quote from: Abiky on July 30, 2021, 11:50:10 AM

Many cryptocurrencies these days offer attractive rewards to miners and stakers, in order to keep their Blockchain networks alive and healthy for the foreseeable future. Incentivization makes the crypto/Blockchain space more secure against malicious actors. Yet, there are a few "blockchain networks" which have no incentives at all. To my knowledge, there are two cryptocurrencies which fit such description. One of them is XRP and the other one is Stellar Lumens (XLM). There are no incentives for holders and node operators of both coins, putting the Blockchain at risk. If there are no rewards, then how will XRP and Stellar remain secure against external attacks? That's something I've been asking myself, since most people support crypto only if they receive something in return. Almost nobody will support a coin for free these days.

Your input will be greatly appreciated. Thanks.

Iota has no transaction fees and is doing well as a project. NEAR uses a portion of gas fees to pay DApp creators, which promotes development and covers server costs.

MSN02

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I personally don’t think that these coins will last. The name of the game is passive income so if you can’t stake on the network it is much less attractive. Why would people use these coins when they could stake with other coin and earn passive incomes? It just doesn’t make sense to me. I personally stake on NEAR and get a sweet 11.2% apy, this passive income is amazing to me especially since I still get the gains from the coin price going up as well as the staking apy. For me it makes no sense to have zero incentive coins, but I’d love to hear the argument for them.

DapanasFruit

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Although there are many people and organization who can do things for free by via of charity or philanthropy it is because they are in turn receiving their resources from somewhere else. In other words, there is no something as really free in this world. Now, having said that, it would be so difficult and impossible to have a sustainable platform if there is no incentive in running it especially for node operators though for holders they can get the profits they wish for when the coin is going to rise. This can be the reason why we are seeing the rise of staking programs and right now there is an avalanche of new projects with this features already embedded into their system.

Bitcoin Seller

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You are right that nobody wants to work for free, so maybe you didn’t delve into properly. I think that miners all the same receive some rewards from commissions. Otherwise, I also don’t see any reason for them to provide their energy and storage on their computer. As there are a lot of blockchains that offer rewards as you said, so they would sooner switch to them.

Beparanf

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Burpaaa

Well we are all or atleast the majority here in the crypto space are investing to gain some money for holding it in the form of token price growth or rewards. If other blockchain offering a reward by just staking per se, then why would somebody choose the blockchain offer anything while someone better exist. In the long, run this blockchain with zero incentives will gonna need to move up and adapt on the trend or else they will die slowly.

RussianEnglishTranslation

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Quote from: Abiky on July 30, 2021, 11:50:10 AM

Many cryptocurrencies these days offer attractive rewards to miners and stakers, in order to keep their Blockchain networks alive and healthy for the foreseeable future. Incentivization makes the crypto/Blockchain space more secure against malicious actors. Yet, there are a few "blockchain networks" which have no incentives at all. To my knowledge, there are two cryptocurrencies which fit such description. One of them is XRP and the other one is Stellar Lumens (XLM). There are no incentives for holders and node operators of both coins, putting the Blockchain at risk. If there are no rewards, then how will XRP and Stellar remain secure against external attacks? That's something I've been asking myself, since most people support crypto only if they receive something in return. Almost nobody will support a coin for free these days.

Your input will be greatly appreciated. Thanks.

NEAR Protocol will survive because instead of giving all of the transaction fees to validators, it gives 30% to the DApp creator the user is interacting with. This fee supports development on the blockchain and covers server costs.

20kevin20

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I think we have two issues we'd be facing by incentivizing nodes. One would be that someone will obviously try to run thousands if not millions of servers (which are nowadays accessible within a few clicks, especially Amazon cloud servers..) which would in turn make them earn a ton of money. The other issue would be that incentivizing everything makes it in the end an unsustainable economy.

We can clearly see on this forum what incentivizing for everyone means, especially since the appearance of bounties. Many, if not most users of this forum only access it due to the money they earn from it. Otherwise, the forum would be an empty place - which I really wouldn't mind since those who remain would be the legitimately interested users.

Therefore.. as much as some people want node running to be incentivized, it's hard to do it without making it unfair. Imagine for BTC how many servers Google or Amazon could run to their own benefit, which could in turn be a big risk for us and Bitcoin's security. They'd all milk the hell out of BTC and I'm afraid the network would actually need to remove its 21M supply limit in order to function like that.

Bad idea in my opinion.

Abiky

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Quote from: Yogee on July 30, 2021, 12:32:56 PM

You have to look in to how much the node operators of these two blockchains actually spend for running them. I bet it's nothing compared to miners and stakers of other blockchains so they can do it for a very long time.

It's a valid argument. Node operators spend way less energy and time than miners and stakers. Blockchain networks with zero incentives often consume very little energy, making costs negligible to the end user. It looks like both XRP and Stellar will have loyal supporters backing them even if they don't get anything in return.

I still believe that incentivization contributes to the long term health and decentralization of Blockchain technology. There's a reason why Bitcoin has been so successful nearly 12 years since its inception. Attractive block rewards has made the premier blockchain network resistant against external attacks. But with XRP and Stellar, that's another story. They're going to have to do something in order to attract more supporters into them, or they'll be at risk of an external attack. New cryptocurrencies with attractive incentives are "popping" up every once in a while so I doubt the aforementioned blockchain networks will be able to survive for many generations. Just my thoughts Grin

Teraboy

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The incentive will be going to the fees. I meant let's take a look at when bitcoin reached its ATH. There will be no more incentive and at the same time the fees will become the main income for the miners.
I think that if there will be adjustment to the fees from the trasaction that will make miners feel satified with it and then it can survive int he long term.

Ucy

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In my opinion, incentive does not necessarily have to be in monetary form. You could automatically/manually reward participants who solve some problems like merely running full nodes regularly and honestly with "Points" While those who solve important problems can be reward with Network native coin. Participants could be occasionally ranked up based on their contributions/rewards.

The right incentive is really necessary for proper decentralization

Yogee

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Quote from: Abiky on July 30, 2021, 11:50:10 AM

...If there are no rewards, then how will XRP and Stellar remain secure against external attacks? That's something I've been asking myself, since most people support crypto only if they receive something in return.

You have to look in to how much the node operators of these two blockchains actually spend for running them. I bet it's nothing compared to miners and stakers of other blockchains so they can do it for a very long time.

Quote

Almost nobody will support a coin for free these days.

Not the "philantropist" from the XRP army apparently.

Abiky

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www.Crypto.Games: Multiple coins, multiple games

Many cryptocurrencies these days offer attractive rewards to miners and stakers, in order to keep their Blockchain networks alive and healthy for the foreseeable future. Incentivization makes the crypto/Blockchain space more secure against malicious actors. Yet, there are a few "blockchain networks" which have no incentives at all. To my knowledge, there are two cryptocurrencies which fit such description. One of them is XRP and the other one is Stellar Lumens (XLM). There are no incentives for holders and node operators of both coins, putting the Blockchain at risk. If there are no rewards, then how will XRP and Stellar remain secure against external attacks? That's something I've been asking myself, since most people support crypto only if they receive something in return. Almost nobody will support a coin for free these days.

Your input will be greatly appreciated. Thanks.

Topic: Will blockchain networks with zero incentives survive in the long term? (Read 111 times)