VII. Cryptocurrency as Incentive

Decentralized systems require decentralized incentives.

Blockchain systems require decentralized nodes to maintain the authoritative history. Incentivizing nodes to contribute to blockchain systems requires compensation. The method of compensation used is only valuable if it is trusted.

Our open network requires an open method of payment. Blockchains cannot rely on payment mechanisms that are only valuable in certain countries, or to certain groups, because this introduces centrality to the system. If the payment mechanism for a blockchain is ultimately controlled by a central entity then the blockchain is not a truly decentralized system.

Our payment instrument must be trustworthy, decentralized, and digital. Our compensation mechanism should be available digitally in order to be held as an asset on the Blockchain. It should be valuable and stable value so network peers can use it to pay any bills they incur from maintaining the authoritative history. Additionally, we want a compensation mechanism that is available in all countries and is transferrable without needing permission from a central authority.


No traditional currency meet our goals for a blockchain compensation mechanism. Therefore, a new payment method must be built. Cryptocurrencies, such as Bitcoin, are blockchain networks that compensate peers. True cryptocurrencies are purely decentralized peer-to-peer networks with the task of managing money, which is then used to compensate the peers on the blockchain.

  • We have to provide incentives for labor.
  • Our decentralized system of nodes must be incentivized.
  • We cannot use centralized or government currency to incentivize a decentralized network, because this allows centrality into the system.
  • We invent cryptocurrency to incentivize our decentralized network.
  • Duh. :)