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What advantages does an app coin/protocol token have over using a regular payment system in dollars, euro or even between currencies? In other words, why go to the trouble of creating a token that today only a few people uses instead of accepting regular payments?

I know that app coins are used for ICO's, but do they offer additional advantages?

closed as primarily opinion-based by niksmac, Tjaden Hess, Ismael, Richard Horrocks, dragosb Jul 9 '17 at 20:58

Many good questions generate some degree of opinion based on expert experience, but answers to this question will tend to be almost entirely based on opinions, rather than facts, references, or specific expertise. If this question can be reworded to fit the rules in the help center, please edit the question.

  • In my opinion this question is a candidate for deletion because it asks for opinions about what a group of devs were thinking. Who knows, right? I'm leaving it open because there's a good question underpinning it. What are the advantages of using an App coin over native Ether? What are the common justifications for doing so? I think if you reframe it like that, this will be an excellent question. – Rob Hitchens - B9lab Jul 8 '17 at 17:13
  • I agree with you. My question is not so much why the team chose a crypto-currency, but rather, why for such a project, using a crypto-currency is more relevant than a regular payment system. – Yohan Obadia Jul 8 '17 at 18:17
  • This question seems likely to draw mostly opinion-based rather than fact-based answers, so I'm voting to close on those grounds. I think that the question could be edited down to be a bit more specific and un-opinionated and would be a candidate for reopening. – Tjaden Hess Jul 8 '17 at 22:03
  • @Tjaden, I disagree with you. I now think that the question does not call anymore for opinion which was the case earlier and I am rather calling for facts. Now, we are in a field where facts and opinion are a bit blurry since the values of those moneys rely on future "possible" applications and uses. However the answers should not just be "I think that..." If you have a better formulation, feel free to suggest it. – Yohan Obadia Jul 9 '17 at 8:04
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    @RobHitchens - I want to explain why I am voting to re-open this question. There are numerous popular questions on Ethereum Stack Exchange asking for the advantages of something over something else (just put the word 'advantages' in the search box to see), many of them yielding valuable answers which have been upvoted by many. As long as the question is not about a product, and has to do with blockchain and dapps, I think it is valuable and on topic. It's the answers that we need to uphold to high standards of rigor (i.e. providing evidence and examples), and flagged when mere opinions. – Tesa Jul 13 '17 at 20:38
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This is a bit of an opinionated answer, for an opinionated question, but here goes.

At the heart of blockchain and cryptocurrencies is the want for decentralization. Decentralization relies reducing the need for trust, and reducing overhead.

For example, if you wanted to do this using a regular payment system, you would need a third party to handle transactions (whether it's Paypal, Mastercard, a bank, or whatever). This would increase your overhead, because you now need to pay the third party (essentially through transaction fees). However, it would also requires you to trust that third party. Now, for large institutions like Visa or Paypal, this isn't really a big deal, however, in a societal sense, blockchain technology has the potential to remove power from these large institutions and make more things possible at a grassroots level.

Right now, it's a little cumbersome to use. Most people do not own eth for use as a currency, it's largely speculative at this point. But in the future, if eth really does take off as a true currency, then it will not be a matter of going from USD->eth->services, and then the seller converting from eth->USD, people will spend eth as they would any other currency.

TL;DR - We're in the early stages of blockchain, and people are testing the waters. As it matures, it has the potential to create a new foundation of commerce that moves away from the mega-corporation economy we live in today.

  • I understand where you are going, however, in my opinion that this is not really possible. Regional money will not disappear, like dollar, euro, etc... People are still going to get paid and buy stuff with those currencies. Therefore you will need to have a system that protects you from the risk of change that represent a crypto-currency and its volatility as I was mentionning. Moreover, you mention ETH, however, if you want to use crypto-monney services, you will also have to own GNT, Ripples, Stratis and whatever new coin attached to a service you want to use. – Yohan Obadia Jul 9 '17 at 8:26
  • This is just going to become a conversation of opinions, but I believe that it's possible for cryptocurrency to become stable and become more and more widespread. I believe it has parallels to the shift from gold backed currency to fiat currency. In addition, regional money doesn't need to disappear. You can use both USD and eth, depending on what fits the situation. As cryptocurrencies mature, switching between currencies will be easier and more fluid. It's not meant, nor do I see it replacing govt currencies. – wtk219 Jul 10 '17 at 15:24
  • Clearly, we are running in circle with this one. I tried not to, but it seems unavoidable. Goes to show that the field is really not mature yet. Golem for example want to compete against AWX, Google Cloud, etc... Not to compete large financial institutions. We should be able to find good argument as to why that choice is relevant.... Thank you for your help anyway! :-) – Yohan Obadia Jul 10 '17 at 15:45

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