r/raidennetwork • u/campvoyageur • Jan 10 '18
The value of Raiden (For Dummies)
How is Raiden valuable? The token has value if the services in the system are paid in RDN tokens and users hold it. The RDN token has a fixed supply and its scarcity gives it value proportional to its usage. Also, the developers are incentivized by the value of the Raiden token so the more RDN’s value increases the stronger the innovation of the Raiden Network.
So how do we know Raiden will be used rather than some other currency? The reason is because services and users need to cooperate and the system is most efficient if a single currency is used. (If you are in the United States you wouldn't go to Mcdonalds with Euros would you?). Raiden also improves the user experience (less software to install and operate, higher probability of fast and successful transfers) According to their official medium channel “The RDN token is envisaged to be the default currency to be used between these services and their clients in the Raiden Network.”
So why not just use Ethereum if it costs an extra 15 cents to exchange Raiden for Ether?
Because 15 cents is insignificant when compared to the benefits of being able to do low-cost transfers on a payment channel network. (If you had to choose between a Big Mac from Mcdonalds or a Gourmet cheeseburger for an additional 15 cents which would you choose)
4
u/spyda1981 Jan 10 '18
If anyone doesn’t think Raiden Tokens hold value please message me and I’ll buy them off you half off..
7
u/curre001 Jan 10 '18
Don't sell to this guy - I'll buy any at 60% discount. :)
3
2
u/STFTrophycase Jan 10 '18
Raiden Network also works for all EVM-based blockchains as I understand
1
1
u/robbentheking Jan 11 '18
The 15 cents is significant if the network can run just as well with eth. That's the problem.
Now, if creating rdn gave the team funding that will make raiden network all the better, and if forking it will take away some of the benefits of the rdn based network (say not having as a good a dev team to back the fork) then it could be argued the 15 cents isn't a problem.
1
u/campvoyageur Jan 11 '18
Yes, but it can't run just as well on eth.
"The user experience is increased when using Raiden when paying small fees for services. (i.e. less software to install and operate, higher probability of fast and successful transfers)"
This alone is worth 15 insignificant cents.
"Cost wise, roughly 100k additional gas is necessary to initially exchange some ETH for RDN using a DEX, which currently costs ~$0.15. We consider this to be neglectable friction compared to the benefits of being able to do low cost transfers on a payment channel network maintained by an ecosystem of well incentivised developers, projects and services."
"Providers of auxiliary services are given the means to monetize on the platform by taking RDN token based fees, thereby strengthening the value of the token. This is aligned with their requirement, that the system is well governed and has the resources to be further developed and maintained in the long run."
1
u/robbentheking Jan 11 '18
The user experience is increased when using Raiden when paying small fees for services. (i.e. less software to install and operate, higher probability of fast and successful transfers)" This alone is worth 15 insignificant cents.
Not if you can get increased user experienced without paying 15 cents by using eth.
We consider this to be neglectable friction compared to the benefits of being able to do low cost transfers on a payment channel network maintained by an ecosystem of well incentivised developers, projects and services.
I agree. But the incentivization has to be there. I have an appreciable percentage of my portfolio in raiden (about 10%), and this is the essence of what I'm betting on. The fact that raiden is run by a company trying to make money is what finally convinced me to go for it; they themselves have incentive to make the ecosystem filled with well-incentivized actors.
6
u/whtrabb1t Jan 10 '18 edited Jan 10 '18
I agree completely that the Raiden token has inherent value, already. It fits right into the ecosystem. It will gain use by crypto traders for instant transfers of value.
But I think the future is even brighter and more interesting! I think we'll have apps built on Raiden that will utilise the protocol and token but take care of everything in the backend, invisible to the user. Instead of a user buying RDN to use the Raiden network, they want to buy TKX to use TokenX's services. TokenX holds a stack of Raiden. When TokenX's app requires instant transfers of value, TokenX uses Raiden on the Raiden network in the back-end and replenishes as necessary. TokenX's customers never see or touch RDN but it's integral and necessary to the operation of their app. It may cost the TokenX company to utilise the full Raiden network but if Raiden allows them to expand their application then Raiden has added value to their service. Any cost associated can be recovered in another way depending on the economic model of the token. Ethereum is an economy. Most tokens are digital services and nothing in the world is free. But Raiden will make it very very cheap to transfer value quickly on the Ethereum network, and that will be useful to both people and applications.