Proof Of Work Is Great, Payment For Work Is Next

Hey Jesscoiners

Cryptocurrency has made many strides over the last few years, the fact that I'm posting this on a blockchain should give you an idea of how far we've come. 12 years may seem like a lifetime in the space, but each year we get new investors, new minds, new skills and new money coming into the sector and providing value in various ways.

It could be development, marketing, investment but what I do think is lacking in the ecosystem is the production facet. In the current state, cryptocurrency is only a speculative store of value with very few working for it.

Miners in the proof of workspace are technically working for it, then using it to pay their bills and earn an income in fiat but the vast majority of us are buying in or have received a donation.

While we have miners and a solid amount of people transacting to give the network a baseline, provide price discovery and provide value to the network, each token could do far more.

Image source - bitcoinwiki.org

HODL vs Velocity

One of the fundamental issues with a deflationary currency is that we're not used to working with it. We've been indoctrinated to expect our currencies to devalue which gives us the motivation to spend it and acquire other assets that hold their value better than the currency. Now with currencies like BTC, we're encouraged to HODL so we can have a stronger purchasing power in the future.

There is nothing wrong with this behaviour and it will always be there and form the basis of price stability in the future as more people get involved. As the network effect grows and more people own to HODL, they dilute the effects of daily selling and purchasing and keep the prices stable but still increasing in value as the currencies scarcity increases.

However, if we are really to get the maximum value out of BTC and other cryptocurrencies it needs to be spent on production.

Produce and reuse

The next step in the cryptocurrency evolution is to produce and re-use. Once we become comfortable with working for cryptocurrency and then passing that on to another for goods and services this is where it will drive the real value for the economy. As that same Bitcoin keeps changing hands, it leaves a path of production in the process.

I'll give you a practical example to illustrate. The miner secures transactions and gets his block reward.

• The miner sells the Bitcoin to pay for his costs and provide an income for himself.

• The purchaser is a digital marketing agency, the agency pays a copywriter for content for their site.

• The copywriter takes her Bitcoin and sells it to someone else for her salary to pay for goods.

• The buyer takes that Bitcoin and pays for a Tshirt at an eCommerce store

• The eCommerce store spends the Bitcoin on advertising at the digital marketing agency.

Now can you see how that one Bitcoin has produced more in this simple economy by changing hands? These are the types of loops we need to create for BTC and cryptocurrencies to produce value other then what they worth in dollars or your local fiat currency.

Have your say

What do you good people of STEEM think? Have you worked and been paid in cryptocurrency? Have you purchased anything in cryptocurrency?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

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