32:22: fuzzy : How will wallet host be compensated?
32:59: bytemaster : Wallet host will end up registered the most users and will be compensated by the referral program.
I worry about the referral program being used as the only funding method for wallet hosts. I presume a user can always take their identity with them and go to another wallet host. A user will likely to keep their account and associated metadata (web-of-trust, reputation) for life. But it is silly to think they will use the wallet provided by the same wallet provider for life, or perhaps even for more than a year. However, the wallet host that first signs up that user will be the one to get 80% of all the fees that account pays for life (or 80% of the lifetime member upgrade fee). What happens if a user signs up with one wallet provider, uses it for a few months and then switches to another wallet provider that the user uses for years? All of the transactions during those years will have 80% of their fees still go to the original wallet provider even though they are no longer the ones provide the service the user uses or investing in the development of the wallet to keep the user using their wallet. The incentives are broken.
This is why I suspect that wallet providers will still need to create (and only accept) transactions that also pay an additional small fee to the provider with each transaction (like the LightWallet did) as a better aligned revenue source. This is a little troubling because the fees are already pretty high for the sake of funding the referral program (although I guess the stakeholders can always reduce it). But if my suspicions are true, the high fees of the referral program will only be used to compensate marketers bringing in the new users (which is fine and what the purpose of the referral program should be) but not as a long-term solution for funding wallet providers.
Same issue with faucets.. a 3rd-party faucet could collect 80% and leave wallet providers with nothing.
I too suspect that wallet providers will need to charge an extra fee per transaction to be sustainable long-term.
Unless wallets have alternate monetization strategies. But as arhag said, the incentives appear to be broken.
Interesting. What if the referral fee commitment can change after roughly a year? So if a user switches wallets to another provider, if the account stays within the wallet for one year, all their transaction fees will go to that referrer. Therefore it incentizies referrers not only to sign up new users, but also to retain their users over time.