Hey guys! Thank you for the overwhelming support for KatalystCoin– We are truly humbled.
On behalf of my team, I want to take some time today to blog about the “recording” function that our Katalyst blockchain is known for.
We have been receiving a few questions from some curious members of the public about the “economic value of recording”, so today I’ll like to take some time to address them.
Frequently Asked Question #1: “What Can The Katalyst Blockchain Record”?
Answer: Katalyst Blockchain can record all economic activities. And these economic activities can be defined by the business owners.
What are economic activities? The English term ‘Economics‘ is derived from the Greek word ‘Oikonomia’, which means ‘household management’. Economics in the modern era is defined as:
“The science that deals with the production, distribution, and consumption of commodities. Economics is generally understood to concern behavior that, given the scarcity of means, arises to achieve certain ends.”
Therefore, business owners can finally record any sort of economic activity on the Katalyst Blockchain. You can think of economic activities as any activity that directly results in the growth of community, direct profits, or information about past, current or potential future customers.
Some examples of these possible recording of activities include:
- Comments on social media channels. Business owners can use Katalyst blockchain to record the various emotions and comments users give about their brand, for instance, per facebook status. These feedback can then be stored as part of the company’s database for future analysis. Against this context, recording emojis or even negative comments might yield valuable insights for the business owner as they find out why certain buyers do not purchase certain things;
- Inbound traffic to their website. Business owners can choose to record which website gives them the highest inbound traffics;
- Live comments on live video broadcast mediums. Video streaming is currently really popular, and business owners can record comments or reactions right down to when certain comments spike because the influencer said a certain thing at a particular time;
- Rewarding loyal supporters for performing certain actions, such as “sharing” a link to people who might like the content, service or products. Business owners can give an instruction for the Katalyst blockchain to reward activities that promote the organic growth of the brand, or community/tribe.
The more data about prospects, current or future customers is recorded, the better it is for the business owner to detail the various buyers’ persona. Information as such will be useful to businesses as they seek to scale and grow further into the future.
Frequently Asked Question #2: “Why Is It Important To Record Economic Activities on blockchain?”
Answer: It is important to record economic activities pertaining to the brand and the business due to some of the following reasons:
- People forget. This is simply due to cognitive biases–sometimes we forget our own contributions, sometimes we forget the contribution of others. Katalyst blockchain solves this problem of forgetfulness by recording everything reliably on blockchain;
- Under certain cultural influences, it might not be exactly socially acceptable to point out your contributions.
Take for instance, a gaming company that chooses to use the Katalyst blockchain to reward gamers after hitting a certain threshold of playing an esport related game.
- To the gaming company, the gamer might be contributing vastly to the gaming ecosystem;
- But to the family of the gamer who might not understand this, the gamer might be simply “wasting time” as he/she incurs an opportunity cost of doing other more economic activities.
This might lead to the gamer choosing to understate his gaming activities for fear of being found out, even though they could be rewarded.
The Katalyst Blockchain however would automate such activities and possibly even provide anonymity to the rewarding process, such that nobody can trace back to the precise identity of the user. This is possible because wallet addresses are anonymous.
The blockchain technology therefore removes the need to completely trust a human in the middle of any transaction, because we can make mistakes, and because we might be subjected to various social and cultural judgement.
Socio-economic activities can now be recorded and verified on blockchain, which gives a more complete picture of business activities and users’ engagement.
Due to the characteristics of the blockchain technology, the Katalyst Blockchain also empowers business owners to record economic activities in an immutable and transparent way.
The properties of “immutability” and “transparency” are essential to businesses to get a more accurate picture of how their fans, prospects and customers feel about their brands, so that they can make more accurate future predictions, projections and adjust resources to meet further needs.
Frequently Asked Question #3: “What is Proof Of Loyalty?”
Answer: Katalyst is the first innovator to think of a more generalized version of “work”. Katalyst calls this generalised proof of work the “Proof of Loyalty”.
Here, “work” is real work defined in a market, usually by the business owner.
As a result of a generalized version of “work”, it would protect, secure and also add value to the network very much like proof of work does. The difference now is only that the work are real economic activities rather than just finding leading zeros in a hash. This implies that the economic activities are useful even outside of the blockchain environment.
The first use case of Katalyst would be in OToken. A blockchain platform focused on disrupting Hollywood, the influencer and entertainment scene – it decentralizes global entertainment.
If you are interested in reading more, check this blog post on the Proof of Loyalty concept.
Frequently Asked Question #4: “Why Must Katalyst Be On Blockchain?”
Answer: Katalyst is on blockchain because it effectively solves the business problem of information gap.
The business problem of an information gap is alternatively known as the problem of asymmetric information. What asymmetric information means is that one party (usually the seller) holding way more information than the other party (usually the buyer), resulting in huge economic profits towards the buyer.
The 2008 subprime mortgage crisis is a perfect example of asymmetric information.
“As banks started relaxing the credit requirements in their quest to get a larger slice of the mortgage market, sub-prime borrowers gamed the system by hiding information that otherwise would have disqualified them. This quickly turned into a negative spiral as banks/housing finance companies tried to out-do each other in chasing these high-risk borrowers. The Adverse Selection cycle set in quickly as riskier borrowers piled into the system. This giant Ponzi scheme finally blew up spectacularly in 2008 – information asymmetry was at the heart of this crisis.”
Let me briefly explain the concepts of adverse selection and moral hazard:
- Adverse selection is a case whereby asymmetric information occurs before a transaction, which leads to the less informed party selecting “bad” products or services.
- Moral hazard happens after the transaction, where the more informed party misuses private information for unethical behavior.
Clearly, the Katalyst blockchain bridges the information gap between buyers and sellers. Imagine you are the bank in 2008 which intends to conduct your operation ethically and to minimise your risks to your users and clients.
If you have all the financial history and information of your clients recorded on blockchain–which then means that all data is immutable, transparent and verifiable– this will then prevent both adverse selection and moral hazard.
The key here is that blockchain realigns the interests of every party involved by making trust irrelevant. Human beings do make mistake, and history has shown that human beings are motivated by greed.
Frequently Asked Question #5: “How Does the Katalyst Blockchain Benefit Businesses”?
Answer: With the Katalyst Blockchain, any business owner can craft more detailed versions of buyers’ personas. Targeting and advertising can then be made more accurate, leading to higher productivity.
The next question is why the verifiability, immutability and transparency of blockchain is so important to businesses when it comes to monitoring how users behave online. There are a couple of reasons to this:
- Research: When it comes to getting data on consumer behavior for instance, traditional means of doing so are via surveys. This however subjects your interviewees to the Hawthorne Effect, which states that people might lie more frequently when they recognise that they are being observed.
Therefore, instead of attempting to record answers via surveys, which tend to yield “what should be” answers, an immutable, public record of “what is” via the Katalyst Blockchain might give a more accurate reflection of reality.
- Open-source resulting in greater productivity and a more efficient allocation of resources: The beauty of blockchain technology is that it is designed to create more collaborations, not competition. As information on users’ behaviors is publicly available, companies can choose to work together to discuss how to combine resources to serve certain segments of customers better.
This inherently reduces economic wastage for society as a whole, as companies can reap both internal and external economies of scale as the entire industry develops.
- Blockchain Technology allows a business to serve your biggest clients and fans better. Katalyst Blockchain allows the business owner to track the buyer persona of the biggest clients and fans of each brand in a manner that is not subjected to human-error.
After the business receives information about who its biggest spenders are via the Katalyst Blockchain, it can then reallocate resources to serve them better.
Well, this was a long post, wasn’t it? I hope we have answered some of your most pressing questions! Be sure to join our Telegram group, and be rewarded with 10 KatalystCoin for a start. Have a great day ahead!