Anyone that has been in the Cryptocurrency space is used to opening free accounts. Take for example, Cryptocurrencies like Ethereum and Bitcoin. There are websites like Myetherwallet.com where you can set up an ethereum wallet for free and there are websites like Bitcoin.com or Bitcoin.org where you can set up Bitcoin wallets for free. Once these wallets are set up, you will have to pay fees for transactions. These fees can range from a couple of cents when the networks are not congested to a couple of dollars when the network becomes congested. At a point in December 2017, people were paying more than $50 to send a few dollars worth of Bitcoin.

Last year, there was a contentious fork that split the Bitcoin network because of the possiblity of high transaction fees during congested peroids. Although this is not the topic of this discussion, this really got people excited about the network that Telos will be forking the software code from; EOS. The promise of EOS was the feeless transactions. Personally, I was tired of the transaction fee debates and was looking for other projects that promised to address this issue. That was how I discovered EOS. Fast forward to today, the transactions are free but there are two caveats. The first one is that you will have to pay for RAM (Random Access Memory) to open up the new accounts. At first I thought this was a joke, but the way the wallets were set up is that setting up new accounts require RAM and someone has to pay for it. The second caveat is that you might run out of RAM when doing transactions after setting up a new account so the possibility remains that you might have to purchase more RAM if you are doing a lot of transactions.

For those new to the space, RAM is used to store data in an in-memory database on EOS. DApps will use this to store state information so it is quickly available to their app. Now RAM is trad-able and the logic being that people that don’t need it can trade it for DApps developers that do need it. Since RAM became trad-able, people began to speculate on this and this inadvertently drove up the costs so that it was hard for developers to start projects because of the outrageous cost of RAM. One DApp developer EOS Sandiego shelled out $200K to jump start his DApp called the Challenge DApp.

This RAM speculation is a topic for another day. When the issue of purchasing RAM for setting up new accounts came up, Daniel Larimer, the Chief Technical Officer of Block.one, the publisher of the software for EOSIO said that the fee-less transactions more than pays for the small cost of setting up accounts. He is definitely true in a way because when you look at the transaction fees for other platforms over the long haul, it is definitely multiples of what you pay for setting up an EOS account.

However, when you are thinking of the ease of access and adoption by the average Joe, you will run into some issues. The average Joe gets most of his apps for free outside of the Cryptocurrency space, at least initially so he expects the same from Crypto. Crypto is already a frightening scene with all the technological jargon so figuring out how to pay for accounts just added a new barrier to the already complex mix. Although there are certain proposals swirling around to try to fix this, it’s not yet reality. So what is the Telos solution? I will allow Douglass Horn, the voice of Telos to explain in his own words when I asked him about this on the Telos foundation Telegram group:

“The plan is for the Telos Foundation to pay for free accounts, at least initially, because it is the only organization which has access to immediate funding. This may get transitioned to a worker proposal (WPS is available from chain launch but it takes a month to vote, so TF funds must be first). If the WPS does not fund, the TF is likely to pick up the slack since we have said this so many times that it’s essentially a promise at this point. Plus, it is very good for the network. It will require a vote of the TF voters, of course, but this can be very fast compared to a WPS vote. (from <1 hour to 5.8 days depending on how quickly people vote.)

We plan to work with wallets and DApps to let them distribute some of these accounts, as long as they do so responsibly. Sqrl is already testing this out. There will also be a portal page on the TF website for creation.

No one has ever said that the program will be limited to 1 million free accounts. I personally think that making new account creation free is a fantastic use of common resources (inflation) as long as it’s not being abused. But after the first million new accounts, it would be good to get some sense of community referendum on it. Perhaps in the form of WPS proposal by the TF for funding to continue the program.”

I believe that everyone loves free accounts and also free transactions and not either or. This is the Telos advantage and the reason I believe that Telos will be big in the Cryptocurrency space.

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Responses

  1. BitcoinQuest

    Thank you for the roundup. I am also super excited about TELOS, same as Worbli, both will change the crypto world even more. I sincerely hope that both will not be overrun by game and betting sites and the accounts will have a more useful life.

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