@carpet ride
How do you get merchants to begin with?
You only get merchants if you have some users.
How do you get users?
Only if you have network effect.
How do you get network effect?
By creating an effective referral program. An effective referral program will attract marketers and wallets that live from the referral fee. If you remove that from the equation, how do you gain network effect? A referral program on 2% of the traders will not have as much transaction as on 100% of the users, I presume.
I would say one of the ways to start to gain merchant adoption is to get picked up by payment processors. As I mentioned earlier in the thread, expanding processor, Coinify might be a good start, they accept 16 blockchain tokens including BitUSD competitors NuBIts and TetherUSD.
https://news.coinify.com/coinify-merchants-can-now-accept-16-blockchain-currencies/As for the rest of your reasoning, I disagree. That's like saying we need to charge $20 for cups of coffee otherwise the referral program won't work and we won't generate network effect. Unfortunately people won't pay $20 for a cup of coffee, so everything else falls apart. Similarly if you're charging more than customers are willing to pay for basic transfers everything after is moot.
Can you imagine a person who can afford to make 10 online purchases a month and at the same time cannot afford $1 to pay for transfer fees?
Why are we so fixated to satisfy this non-existent customer? Just to maintain the perception of being cheap?
Apparently PayPal can, that's why they don't charge for basic transfers to friends and family. "Send or receive money between friends and family and we won’t charge you anything,"
There's clearly a difference in the market between sending tokens back and forth and doing something more useful with it like making a purchase/currency conversion etc.
In an ideal world you would do what payment processors do (including crypto payment processors) and make distinctions between merchant accounts and individual accounts.
Then when customers do something useful to them like make a purchase, they will pay a larger fee, which will often be hidden in the purchase price (which will still be cheaper than competitors)
Uphold (previously BitReserve) which has 'supposedly' done >$0.5 Billion transfers this last year on their centralized BitAssets advertises "0% Free & Instant. Move, convert and hold your money. Instant and free, for any member, anywhere."
https://uphold.com/BitAssets though are at least a useful product so there is some argument for charging higher transfer fees for those. I would consider increasing the transfer fee for a specific BitAsset, like BitSilver/BitGold to $0.3. By your theory that would incentive wallet providers and referrers to promote BitSilver more than other BitAssets and if customers are price insensitive in that range then BitSilver should gain network effect very fast.
In my opinion, we still need a sizeable transfer fees, not nescessary 20 cents, but it should be at least 5-10 cents so a wallet provider has an incentive to run its business.
Yeah, I understand that it can't realistically be much cheaper than 5 cents at this stage.