It’s like working for an Imperial Valley farmer and getting paid in lettuce, or working in Puget Sound and getting paid in clams.
The advantage is that a *coin has a longer shelf life than a head of Romaine. The disadvantage is the conversion of one *coin to another.
One of the reasons the Europeans invented the Euro, and that US dollars are used for so many transactions is to avoid the whole currency exchange mess.
Another analogy: Prepaid purchase cards. Prepaid phone, coffee shop, gift cards. Pain in the butt.
I don’t want to have 257,931 apps on my phone to work with a zillion new currencies.
How much do you trust the app creator? Sure he may have a standard way to create a unit of currency, but what keeps him from inflating the currency?
In the prepaid account model, what keeps Starbucks from issuing $10b in $tarbucks, then, before they are redeemed, going bankrupt? At present the reason that Starbucks doesn’t do this is simple: The ratio of cash flow to money on cards is very high.
With these Appcoins, there is no such incentive. We will see a lot of scenarios:
- Invent an appcoin
- Promote the hell out of it.
- Get a good exchange going for either other appcoins or cash
- Secretly create new coinage.
- Cash out
- Declare bankruptcy.
Read the history of the Vancouver stock exchange. This is nominally under the auspices of government regulation, and still there is a lot of ‘pump and dump’ going on.