Veres One Network Economics
The Veres One Network is designed to be self-sustaining global public utility with a proper balance of economic incentives to participate in and protect the network.
Network participants may use the Veres One Network to create decentralized identifiers via software applications such as digital wallets.
There are two mechanisms for creating Decentralized Identifiers on the Network. Both mechanisms require roughly $1 USD to perform, which is derived from the estimated cost of running the Network. Updates to the Decentralized Identifier require roughly $0.25 USD to perform.
The first approach is to pay an Accelerator to create a Decentralized Identifier, which happens as quickly as it takes the Network can come to consensus (a few minutes). The second mechanism is to submit a creation request to the Network with an associated proof of work, which typically takes 6-9 hours for a software application to generate. Once the Network verifies the proof of work and comes to consensus, the Decentralized Identifier will be created.
The Veres One Network attempts to achieve four important goals.
The first goal is to ensure that Decentralized Identifiers are free for humanitarian aid use cases.
The second goal is to ensure that access to a payments network is not required to participate in the management of your identifiers.
The third goal is to ensure that the network is financially self-sustaining over the long run, which means that no network cost should be externalized. That is, the network must fully account for its operational costs including, but not limited to, how much it costs to run Nodes, maintain the software, govern the Network, maintain the community, and other items like environmental costs that are often not taken into account when building and deploying a Blockchain.
The fourth goal is to keep the costs of, and updates to, decentralized identifiers as low as possible. The Veres One Project aims to run a tight operation. Network growth should realize economies of scale and result in the reduction of Accelerator fees.
There is an absolute cost for running the network and that requires a steady stream of revenue. Accelerators provide this stream of revenue.
How it Works
Few individuals and organizations want to perform a Proof of Work to write to the Veres One blockchain. Many individuals and businesses cannot be bothered with running the appropriate software and waiting overnight for an update to complete and will desire convenience, especially if the financial cost is small.
Accelerators enable individuals and organizations to rapidly create and update Decentralized Identifiers and their associated identity information. Accelerators charge their customers for the service and pay the Veres One Project fees set by the Board of Governors.
The Veres One Project then distributes these fees to the Network participants according to the funding policy set by the Board of Governors.