![]() IMO this mechanism is infinitely interesting for so many reasons. ![]() You visit this point quite a few times with regards to the bandwidth of the network but don't mention the other critical role of the IOTA token- pledged as a mechanism to buy storage space on the network. The value of IOTA is (mostly) proportional to the demand of the Network. Good write-up, here are some, hopefully helpful, critiques: To speculate on the future price of IOTA tokens then is to speculate on the amount of non-spam transactions that will require the network. So it is both the number of transactions and the number of relatively important transactions that matter in terms of impacting token price. So we should consider that if all the data going through the tangle is relatively trivial, then even if there is congestion, there might not be a strong incentive to accrue mana. One can imagine that the incentive to hold the token (or to be able to rent mana) will also increase with the importance of the data being propagated through the network. ![]() So the value of the token will rise as people want to hold it in order to ensure access to the network. This incentivises people to continue to hold tokens. ![]() There is a decay function programmed into mana so that if it is not used it gets burned. Organizations that don’t want to hold the IOTA token, or can’t hold it on their books for regulatory reasons, can buy mana from other IOTA token holders. An interesting side effect is that this also creates a new marketplace for people to buy and sell mana itself. So holding the IOTA token allows guaranteed access to the network and so this desire to guarantee access will result in more token holding. There will be times when congestion is low and no mana is needed, and there are times of congestion where users will want mana to guarantee access to the network. In one sense holding the IOTA token is a little like renting bandwidth on the IOTA network. During times of network congestion, when there are lots of transactions and this threatens to prevent some users from accessing it, the network will require users to pledge MANA in order to ensure that their transactions have priority in the network. To ensure that non-spam users of the network always have access to the network, IOTA is implementing a system whereby token holders accrue something called MANA. Since the throughput of any network will eventually have some upper limit, anyone could easily spam the IOTA network to make it relatively unusable relatively quickly. IOTA needs to have some sort of congestion control system to prevent the Network from becoming bloated with spam messages and reducing throughput for useful data and value transactions. So besides wanting the token to exchange value, where will demand come from? If you want to buy or sell the sensor data that is traveling through the network however, the IOTA token provides an easy way to exchange value. So if you have sensor data that you want to propagate on the network, you don’t need to hold the token to do so. You don’t need to use the IOTA token to engage with data transmission on the network. Since IOTA can be used for both data and value, there are lots of opportunities for demand for the network to increase. ![]() Have I made any mistakes here or have I misrepresented anything? Would appreciate any feedback or insights: I tried to explain to myself why IOTA may be valuable in the future. I am trying to better understand IOTA and why I should or should not hold it. ![]()
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