What is the Pangea Arbitration Token and why is a token necessary?
By: John Mathews, Bitnation CFO
Before describing Bitnation specifically, it is helpful to consider crypto-currencies in general, and use Bitcoin as an example. One of Bitcoin’s critical innovations was to include an incentive model in a peer-to-peer network protocol. By using a native currency, together with a proof-of-work method of dispersing the currency, Bitcoin rewards its workers and incentivises disparate parties to work together toward a common goal.
In broadly similar terms, the Pangea Jurisdiction will be powered by the Pangea Arbitration Token (PAT). PAT will be issued as a reward for contributing to and maintaining the network, and for increasing its utility, building up a good reputation, and more. This will ensure user-stickiness and create a network effect which will benefit users by increasing the value to PAT tokens and the utility and reliability of the Pangea platform. As more people and projects build on Pangea, the liquidity of PAT will increase.
We are often asked why why are not using Bitcoin or Ether as our token, or why we need to use a token at all. We are using a platform specific token because this allows us to design a more efficient platform. Our token model will make it as appealing as possible for users of Pangea to be rewarded for creating and executing contracts, resolve disputes, and build nations. It will create a virtuous cycle of network effects.
In Web 1.0 and 2.0 technologies, most work is done on the protocol layer but most value is created on the application layer. Crypto-economics (and the Web 3.0 movement) have explored solutions to this problem by creating a variety of token models which take advantage of network effects.
Network effects are seen all around us, beyond crypto-economics. For example a currency or a market becomes more useful and efficient as more people use it. Facebook isn't useful if none of your friends are on it. Similarly, we continue to use Bitcoin rather than one of its forks due to the benefits of interoperability with other users and services on the network.
A token for Pangea
Pangea is a platform where users can build organisations and communities, and a competitive market where jurisdictional and legal services are provided. It is an ecosystem of communities, organisations, and service providers.
Building a sustainable ecosystem has historically been difficult because the needs and motives of token holders, participants, and app developers need to be aligned.
Creating a financial incentives for users to build a reputation, honour contracts, resolve disputes, create communities, maintaining the network, and create and audit better smart contracts gives an incentives not just to the creators and builders, but to each individual user of Pangea.
PAT will be tradable on exchanges - including Shapeshift, and can be transacted using the native Bitnation app — the 0.3.1 version is already available to download on Android.