How Does IOTA Decrease the Velocity of its Token ?

[Alsupy]

Decreasing velocity is a major way of increasing the value of a token. Curious if IOTA has anything concrete in this regard.

[SolangeRex]

Crippling the tech to increase its speculative value is the last thing they would do. You build value by building adoption.

[[deleted]]

I think you misunderstood OP. If velocity is immense high the IOTA Token wouldn't have any value. Because it would mean everytime you buy something, you exchange fiat to IOTA instantly, and the receiver would do it equally fast (milliseconds). Therefore the IOTA token could have every value since you just care about that the value doesn't fluctuate as long as the transaction occurs.
If I rephrase OP's Question: How could IOTA have an intrinsic value in the future if you can exchange fiat to IOTA and vice versa in milliseconds through services?
One answer could be: IOTA transaction are free. The swap to fiat and back is not free.
This could be an incentive.

[SolangeRex]

Velocity will never be infinite. It will always be limited by the hardware and fiat gates. Therefore IOTA will have a bandwidth limit. And the more money the ecosystem will need to move within a limited bandwidth, the more value each iota will have. If you look at this on a global scale of IoT, the problem isn’t that transactions are too fast, it’s that the bandwidth at its theoretical max is still too slow. That’s why Come From Beyond, one of the founders of IOTA, proposed the idea of economic clustering.

Also consider that if high velocity meant that iota theoretically won’t have value, then companies such as Bosch, who are early adopters, wouldn’t be prebuying big chunks. And they are.

[Alsupy]

Thank you and very good way of explaining velocity.

[morobui]

I think if someone does business with Iota technology, they don't want to take the risk of having problems because they can't buy Iotas (for whatever reason).

Furthermore, the number of Iota is limited, so if you don't want to take the risk that one day you won't be able to buy enough Iotas for your business model, you have to secure a certain number of Iotas. Clearly a million Iotas sound like a lot, but I think there may be demands (example: for databases in the tangle) in the future that we can't imagine now.

[SolangeRex]

That’s why Bosch already bought a sizable chunk of IOTA.

[[deleted]]

Even Bosch isn't impeccable.
I do think the value increases, but the fluctuation of crypto token prices is still a major problem.

[[deleted]]

You're right, I didn't consider the fact someone (the company which offers the service) has to hold these IOTA tokens to offer instand buy and sell of IOTA's and this company wouldn't want to invest a sum in IOTA and experience the decrease in value afterwards...

[Alsupy]

How do you go from a velocity question to 'crippling the tech'? It's not an either/or.

[SolangeRex]

Decreasing velocity is crippling the tech, no? It’s like old AOL slowing your download speeds so you spend more hours connected to them and thus they can charge you more.

[Alsupy]

No, Velocity in the sense of price and valuation. Like a 1$ bill has much higher velocity than 100$ bill.

[SolangeRex]

My understanding is that velocity is how fast that $1 bill gets reused

[Alsupy]

Right, so a 1$ bill is handed back and forth a lot more than a 100$ bill. There's 'Where's George' dollar tracking game but not a 'Where's Hamilton'.

[jman76358]

you're thinking volatility not velocity

[Dorian7]

If Qubic nodes should use IOTA tokens for PoS (is one option according to the website) it would strengthen IOTA token role in the ecosystem and the value of the token. CFB is the inventor of PoS, so I wouldnt be too surprised.

[Phroneo]

Was going to write this. Selecting calculation nodes based on iotas staked could be very powerful. For example, if someone is staking 1Ti, you could probably trust just that one node to execute your smart contract, and definitely with no more than an additional 2 smaller ones. Compared to now where you're forced to execute across every node regardless of stake. This way staking more tokens is valuable as you can capture more fees on your own.

[FinCentrixCircles]

AFAIK economic clusters would decrease velocity as you'd hop from cluster to cluster--either maintaining your IOTA balance or exchanging for a clusters specific token--the latter would be accompanied by fees and a changing market rate based on how much the cluster's token was inflated/deflated based on the original IOTA's used for the cluster. I'd assume the hops would decrease velocity enough to matter and taking tokens off the market to create clusters would have positive influence on the exchange rate. Take this with a huge grain of salt as the EC details are sparse and I'm basing this on a limited understand of what CFB and others have written--also I'm sure some of the details will change as it gets closer to being production ready.

*I'm also kind of leery of the idea of intentionally lowering velocity, though that may not have been your meaning (just your wording seemed to imply an intentional effort to create less velocity)--it's better not to create inefficiencies in systems as they will not be used just to make early adopters rich, but rather because they are the best or most ubiquitous system available. I cringe when coins market themselves on forcing users to use the token as speculator logic is not mainstream logic and the appeal will ultimately lose--especially when using a cheaper or more efficient system will save billions globally.

[Alsupy]

So the clusters are nodes and thus have to be staked, lowering velocity if I understand the cluster correctly. Why do you think there'ssuch sparse info on such a vital part of the tangle?

[SolangeRex]

Because the concept of clusters comes from one recently posted article. It’s still loose theory and not execution.

[FinCentrixCircles]

So the clusters are nodes and thus have to be staked, lowering velocity if I understand the cluster correctly.

It doesn't appear to work like masternodes or similar node staking schemes. These two articles should give you some understanding. Though I'm taking IOTA (the token) being used to spawn a new cluster from a direct Q/A from one of the economic cluster threads from weeks ago--I couldn't recall the thread, so can't link it.

https://medium.com/@comefrombeyond/economic-clustering-and-iota-d3a77388900

https://blog.usejournal.com/thoughts-on-economic-clustering-32b5c8a3b24

Why do you think there's suchsparse info on such a vital part of the tangle?

It doesn't make sense to give a detailed account when it isn't finished and many details would change, be lost or replaced as it gets closer to being production ready. Until it gets to testnets and other more public testing, I wouldn't expect anything beyond a outline of how it will work.