Virality, Bubbles, and the Fundamental Goal of SolarCoin

This post was inspired by a post by @willcottrell titled Is SolarCoin Going Viral.
@jza commented on Will's post, "Virality is something that [makes] crypto incredible, however I wonder what good can this virality benefit and whom," and that made me think it would be a good idea to share some thoughts on how #SolarCoin works, and how promoting some virality could potentially help its mission. Some of this might be redundant to other posts, but I also figure it isn't a bad idea to provide some overviews now and again.

I also recommend a post by @akacutty titled SolarCoin FAQ Evolution

We know the value of any currency is based on human perception, but this doesn't mean all cryptocurrencies are alike. Bitcoin's goal was to create a decentralized currency, and it is based on a proof of work system. The value of bitcoin is volatile, and there is no doubt that virality has contributed to its other-worldly increase in value. We know value is at least partly, or mostly based in human perception, and Bitcoin has been a fascinating study in that concept over the last year.

In contrast, SolarCoin's goal is to incentivize global solar electricity development over a period of 40 years. SolarCoin is based on both the proof of actual solar production and proof of stake-time (PoST). Proof of solar production is based on solar facility owners providing documentation of their arrays and capacities, and the proof of stake is carried out by people who hold SLR in the SolarCoin wallet on their home computers and earn 2% interest by running the program continuously.

The goals of SolarCoin and Bitcoin, along with the way they secure value, alter the way they are effected by virality, or perhaps more accurate, the role of virality in regard to their current value. By its nature, Bitcoin is considered highly speculative, meaning it is possibly over-valued based on what it offers. Bitcoin is not a business or organization. It is only a currency, but its existence on the blockchain does provide a service, namely a means of moving, and albeit risky, storing wealth. In contrast, SolarCoin is an organization that is working to provide a very concrete service -- to offset potentially shrinking state incentives with a non-profit, non-governmental incentive. (It's also worth pointing out that SolarCoin uses a fraction of the energy to stake compared to what Bitcoin requires to mine (need reference)).

Since Bitcoin is, quite possibly, the largest bubble in world history, it might be better to compare SolarCoin to the more modest, but strikingly viral Ripple. Not only did Ripple demonstrate a bubble, but the bubble likely popped. Ripple as a concept has some intriguing merit, but as an organization we know it hasn't accomplished much in terms of actual value to the entities it claims as potential customers. The meteoric rise of Ripple was clearly based mostly on human perception (perception that the white paper's promises were worthy of investment), and was likely sustained temporarily by the virality of the headlines its rise created.

If we ask the question posed in @jza's comment in regard to Ripple, the answer would be that the benefit of virality to Ripple is to draw attention to its rising price, with the hope that more people will buy it, increasing the potential profits of hodlers. This happened for a time, but then a few headlines about Ripple's lack of actual deployment went viral, and the value dropped.

There are several reasons that virality would benefit SolarCoin in a completely different way, and I see it possibly playing out in a few ways. First, a big headline about a major energy provider like AWCA signing up to receive hundreds of thousands of SLR can suddenly create a lot of buzz online. This buzz serves the purpose of informing thousands of people about what SolarCoin is working to accomplish, and a massive example of its success to date. This virality would inevitably help attract more producers and encourage them to sign up to receive SLR too, and the more people who sign up to receive the reward, the more SLR go into circulation, and the more valuable it becomes.

Now, that same virality of the AWCA story could also simply cause more people to buy SLR for a speculative purpose, and that could also cause a bubble, or at least cause it to become greatly over-valued. Some people may even make a quick buck, and others may lose quite a bundle; thus is the nature of all cryptocurrencies. But in regard to its mission, such a viral induced bubble is more or less irrelevant, and would likely also contribute to the most important issue which attracting more solar producers and encouraging them to sign up to receive the reward.

Anyone receiving and holding SLR would likely welcome any increase in value, regardless of whether it is rooted in additional speculators buying it or the onboarding of new members, but those of us who understand the organization and its mission are looking at the long-term projection. There will likely be some bumps and falls along the way, but if a certain percentage of solar producers sign up, and SLR steadily climbs to $30, $40, or $50 over the next 35 years, the Foundation will have succeeded in its mission and will have been a viable global incentive.

As Will stated in his article linked above, SolarCoin is adding 200 twitter followers a week, and getting 100 google hits a day. That doesn't compare to the top enviro-coin, POWR, but POWR is a for-profit endeavor with a marketing strategy run by paid professionals as opposed to volunteers who connect via Slack. So in comparison, and compared to just a few months ago, things are clearly on the up and up for SLR. I say bring the virality, or rather, push the virality, especially if you want to promote a global transition to renewable energy as quickly as possible. But don't get too caught up in any spikes that such virality may cause, and stay focused on using it to sign up as many new members as possible.