Incentives In Blockchain: Here’s What You Need To Know
The incentive is a crucial part of the overall economic design for effective blockchain platforms. It is that piece that builds a platform’s value proposition and structures the system. From an economics perspective, it is the crux of the system.
To make one’s platform successful, one may think of several ways and giving incentives, is one great way to motivate the community of participants, to cooperate and to create value to the platform as well.
From miner rewards to transaction fee-setting mechanisms and from token curated registries, to prediction markets, incentives are everywhere in blockchain platforms.
What are Incentives?
One can understand an incentive as an element of the system, that affects the performance of the participants by altering the relative costs and benefits of choices.
Incentives include pay for performance system of rewards that compensates individuals with money. They also include systems that do not have any financial;l reward at all.
In order to make the public embrace the cryptocurrency, we need to use incentives and provide clear benefits of using cryptos over traditional methods of payments. It is important to make people aware hoe Cryptocurrency and blockchain are different from anything else.
We have to target the audience by thinking out of the box. For example, Elipay addresses this challenge by giving shoppers certain cashback in the form of crypto tokens when they make a purchase.
Apparently the idea for this was to generate a network of retailers to whom people could spend their assets in a non-fiat currency. This promotes loyalty among the customers and works to encourage them to use the Cryptos.
