Editing Permissioned resource coins (section)

== The problem with resource coins ==

Resource coins like Storj and Filecoin are systems that let anyone contribute their spare computational resources in exchange for payment. By using Storj, a person can lease out their extra hard drive space to other people and receive Storjcoins in return (a kind of special “utility token” in quotes…) The idea is very cool, but functionally it has problems.

The most significant problem, in my opinion, is the way in which these systems are designed to let anyone sell resources on an open market. At first impression, this might sound like an excellent property to have for a decentralized network, but in this particular context, it means that anyone can sell resources even if there is little demand for it.

In a cryptoeconomic system, this property is highly undesirable as an unregulated supply of storage space will cause wild fluctuations in the price of storage space on the network that effects all parties. In a worst-case scenario, offering resources would be unprofitable without cheating, and thus there would be no incentive to play by the rules.

If you take a regular “token” (with its wild swings from speculation) and add in an extra greed multiplier where everyone only wants to sell instead of buy. It becomes like a tragedy of the commons: there is a shared resource that is incentivized - reliable storage space - and that shared resource is important to maintain for future business. But if everyone only acts in their own self-interest there won’t be enough of an incentive for quality.

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