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- 1 Public Goods in crypto are digital assets that load with ease and benefits in the industry.
- 2 They are built with the aim to improve everyone’s well-being by providing easy access to things.
Public Goods in crypto are goods or services that are available to all members of the crypto community. Crypto communities can use these public goods regardless of their ability or willingness to pay because using them makes things easier. These Public Goods include wallets, Layer-1 security, and open information or data.
Besides finance and crypto, public goods are part of our daily routine, like public buses for transport or public parking etc. They also give ease of living. In the same way, public goods are helpful for the crypto industry but the only difference is that they are freely available. They are not chargeable. Hence, maintaining them is a challenge.
Public Goods are non-excludable, meaning that no one can be prevented from accessing them. They are also non-rivalrous, meaning that one person’s consumption does not reduce the availability for others.
Some Examples of Public Goods in Cryptos
1 Layer-1 Security
This is the security layer with enhanced options underlying blockchains. It supports various transactions and applications. This is a must for the trust and reliability of the crypto ecosystem. Layer 1 Security is a public good because everyone benefits from it but no one has changed it or paid for it.
2 Wallets
Wallets are public goods because they enable users to interact with the crypto network but they do not consume any resources or exclude anyone from using them.
3 Open Information or Data
Open information or data includes volume, price, and availability. They provide transparency and accountability. They are open to all without any restrictions or charges to access them.
Measures to Eradicate Problems in Public Goods
Since public goods do not charge anything, it faces certain problems. Due to underfunding or free riding, it faces the problem of maintenance. Some measures that should be taken to support public goods are as follows:
1 Crowdfunding
The collective funding of public goods by the community members who value them is always beneficial. Crowdfunding can result in the betterment of public goods.
2 Quadric Funding
As the name sounds this funding is a mathematical formula to allocate funds to public goods based on the number and size of individual contributions.
3 Decentralized Autonomous Organization (DAO)
DAO can collectively decide and fund public goods through voting and staking mechanisms. It provides transparency and accountability for funds and outcomes of public goods.
Summary
If all these measures are implemented, then certain problems faced by the Public Goods in crypto may be eradicated. Public goods are important for the development and innovation of the crypto ecosystem. But, underfunding and no direct incentives restrict the chances for further development.
Saurav Bhattacharjee is in charge of the Broadcast development team of The Coin Republic.
He has been covering the Metaverse and NFT niche for the past 2 years.
With stellar interviews on his portfolio like Nicehash, Paxful, WallstreetWolvesNFT, Bitholla, Totemfi, EOS.io etc. Saurav has spearheaded the NFT SUPERSTARS AWARD and successfully hosted the first award in 2021.
