Continuing our earlier series on interesting blockchain projects, this time we’re looking at 0chain (ZCN).
Disclaimer: This is an introductory article that does not constitute investment advice.
If you read our ‘Proof of…’ post, you’ll realise there are lots of ways of establishing decentralised consensus, but they typically require a scarce resource, like computing power (hashrate, aka PoW), coin supply (PoS) or something else. In the case of some protocols, that scarce resource is something we all use, whether that’s bandwidth, storage or one of the other elements that makes the internet go round.
That’s what Storj and Sia are looking at, and it’s also what 0chain does. 0chain (ZCN) are targeting enterprise, claiming the fastest enterprise-grade blockchain – which is no small feat giving the growing competition. It’s designed to allow users to create their own customised chains that operate with the speed of traditional cloud services. 0chain claim billions of transactions on their ‘DevNet’, with many different services available. But as much as the tech, we’re interested in the business model.
The overall idea is that businesses pay large amounts of money for cloud services, but these costs are sunk: the resource has been paid for, and that’s it. However, much of those services are wasted – for example, unused storage. 0chain allows companies to access storage by purchasing and locking tokens, which can then be unlocked and sold, or reused once the contract is up. This enables holders to access computing resources but to turn those costs into a reusable asset.
While there’s plenty more to explore (which you can do on their site, https://0chain.net/), what’s perhaps most interesting about 0chain is the reusable tokens angle. In most similar cases, you pay tokens for a service, and these go to miners who provide the storage/resources to you. Here, that’s not the case. The model is, for businesses, sustainable and flips on its head the normal way of accessing cloud services. From bitcointalk:
We need the DApps to hold tokens based on an expected computational and storage need that they would pay a traditional cloud annually, except that they just need to hold it like a bank. There are no fees. And if the DApp happens to hold enough tokens initially, and the token value increases, then they have a free scalable cloud for years to come without buying any additional tokens. This holding rate is adjusted on a regular basis to control the inflation rate, and these adjustments are done such that the reward pool lasts at least 100 years.
Like everything else, ZCN has been punished by the bear market, but all things considered it’s not doing too badly. We’ll be keeping an eye on this one.
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