Swarm Alpha Online Event - BZZ token - What it is and why it is needed by Daniel Nagy

Fri, Oct 2, 2020, 12:00 AM

Website: https://swarm.ethereum.org/ Apply for grants: https://swarmgrants.typeform.com/to/SbrJiiiL The BZZ token As the evening rolled on, Daniel Nagy treated us to his philosophical understanding why decentralisation is such a key aspect in Swarm. Well, as it turns out, centrally controlling and coordinating people inherently has many flaws. Imagine a boat where 30 people are rowing. If there is no one to coordinate them, the rowing is pretty chaotic and ineffcient. As soon as someone takes that role, the boat has a course and a rhythm. The downside is, the whole boat now depends on one person; what if they fall overboard or don’t really know the way etc. What if music, individually streamed to each person and adjusted for each person’s capabilities, would give people rhythm? What Swarm does is somewhat akin to that. It coordinates resources on the network through the BZZ token. We opted not to use ETH, explained Nagy, because there are now more than one Ethereum chain and being tied to only one token would reduce interoperability. Our own token at the same time decouples Swarm from ETH’s price volatility. The BZZ token is also a means of deposit and payment. Some users will upload, some will download and there needs to be a medium of exchange between the users and providers. It is also used to signal commitment. Providers of long-term storage, for example, can stake their BZZ and if they fulfil their promise, it will be released after a period of time and vice versa. Per Nagy’s words, the token will first be generated through the first token issuing and offered to outside buyers, while later it will be only available against hard deposits of DAI.