Building An Active DigitalBits Community
The list of things that blockchain was supposed to fix seems endless. However, a majority of cryptocurrency volume comes from trading — the buying and selling of tokens based on speculation. Despite what particular projects purport to address, it seems more important than solutions is holding the most valuable coin, whether or not that coin can or will actually serve a purpose.
The DigitalBits Project looks to address the lack of real-world applications in the blockchain industry. In addressing issues with existing infrastructures, it is essential to develop a strong and engaged community. But how do we enable the DigitalBits community to utilize and engage with our technology?
Loyalty Points & Rewards — Unlocking Value Held in the Pockets of Millions
DigitalBits aims to spur the mass-adoption of cryptocurrencies— the Loyalty Points & Rewards industry was selected as a first use-case with this goal in mind. In the United States alone, $48 billion in points is accumulated annually across Travel & Hospitality, Financial Services and Retail. Of this, upwards of 33%, $16 billion goes unused, never to be redeemed — exposing evident problems within the industry. Integrating both new and existing loyalty programs with DigitalBits technology looks to introduce never before seen liquidity and transferability within the space. Points can be seemingly spent towards any offering within the DigitalBits ecosystem, enhancing their utility, and bringing points closer to the status of true “digital currency.”
Loyalty Points & Rewards are an asset class already held in the pockets of millions worldwide. DigitalBits technology will allow the owners of these points to use them in a dynamic and flexible environment, unlocking billions of dollars in static value.
Existing App Integration — Removing the Learning Curve
Humans have an inherent issue with change — the more complex and intensive the task, the less likely that it will be adopted. DigitalBits was built to integrate directly with existing applications, optimizing the backend app infrastructure while bringing all the benefits of blockchain technology to the user. By allowing users to engage with blockchain through apps they are familiar with, DigitalBits makes it easy for the community to interface with the technology, reducing the complexities associated with adopting blockchain.
Algorithmic Dissemination — Promoting Blockchain Use
The DigitalBits algorithmic pool was designed to disseminate reserve tokens into the community based on a combination of network and account usage. By rewarding higher activity accounts, DigitalBits looks to encourage the use of its technology. This contrasts the Stellar protocol from which DigitalBits was forked — where a built-in inflation mechanism allows large holders of lumens to passively accumulate value. To learn more about algorithmic dissemination, see “Piecing it Together Pt. 3 — Forking Stellar.”
Node Operator Program — Incentivizing the Operation of Validator Nodes
The Proof-of-Work consensus algorithm utilized by Bitcoin was able to simultaneously achieve three objectives:
- Combat the double-spend problem in a decentralized manner.
- Encourage entities to become involved and provide security for the network.
- Disseminate tokens into the network, rewarding miners for the resources utilized to support the network.
Addressing the double-spend problem gave Bitcoin the ability to become a viable decentralized currency. However, in terms of node incentivization, we will explore objectives 2 and 3.
As more individuals become involved in the network, the more secure and robust it becomes. In exchange for the resources expended, miners are paid rewards in the form of Bitcoin — providing compensation but also distributing Bitcoin into the community. Network participants become inherently tied to the cryptocurrency, as security and utility help to boost valuation. This not only encourages efforts to ensure the health of the network, but to promote its utilization and adoption.
Many cryptocurrencies depend primarily on altruism when it comes to participating in consensus. Node operators will experience certain technical and performance benefits from a higher degree of connectivity, but few protocols have been able to encourage the level of network investment that Bitcoin has. When DigitalBits originally forked the Stellar protocol, the benefits to validator nodes were:
- participating in consensus and providing security to the network
- submitting transactions to the network without relying on a third party
- quicker access to ledger data
- setting up customizations of the business logic or API’s
- preserving and being able to directly access the history of the network by storing all past ledgers
- anchors on the network are able to provide token holders with a trusted node to submit transactions to and see the state of their account
Currently under development, the DigitalBits “Node Operator Program” will allow successful applicants to be rewarded in XDB for operating validator nodes, provided certain conditions such as “up-time” are met. Following in the footsteps of Bitcoin, DigitalBits looks to tie its community to the health of the network and the associated token, XDB. In doing so, DigitalBits encourages members of its community to actively support the network.
As a blockchain protocol focused on adoption, DigitalBits has based many of its features on engagement. From unlocking billions of dollars in value held in the static loyalty space, to incentivizing community members to provide network security, DigitalBits continues to draw the much-needed bridge between blockchain innovation and society.
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