In response to Cain's investment thesis

My response to @Cain's investment thesis (https://www.proofofwriting.com/posts/my-simple-ecash-xec-investment-thesis)

I love the idealism and optimism. However, major world governments (the G7, most EU countries, etc) will never give up control over currency (allowing a substantial portion of their economies to run on a fully decentralized system).

This is a practical and reasonable assumption.

That means eCash has the following realistic paths forward:

Stablecoin use in jurisdictions that have friendly regulation towards bearer stablecoins

A real world example is Firma. However, major governments are all anti-bearer stablecoin (bearer stablecoins operate too much like cash. The tokens cannot be frozen, seized, or clawed back after a transaction is successful). Hence why Firma's official position is that they are not available in most major jurisdictions.

Additionally, smaller governments are under pressure to conform their regulation to the standards of the bigger governments in order to remain included in the global financial system and avoid sanctions.

All this means, bearer stablecoins are being squeezed out of global finance not necessarily in absolute terms, but for most first world and economically stable second world countries.

The good news: There is still massive bearer stablecoin opportunity for countries with very unstable economies and some third world countries.

Micropayments

Micropayments have been a dream of web monetization since the 1990s. HTTP status code 402 was created assuming the web would run on micropayments.

Micropayments have been tried through digital wallet solutions in the past (to avoid credit card fees). The reason they didn't go mainstream is not technology related. Subscriptions and ads simply made businesses more money than micropayments. Reason being, micropayments carry a sort of "mental friction" (when users have to repeatedly "decide" to transact in order to use your platform, they use it less. This is great for mental health but ultimately businesses make more money by charging subscriptions or running ads because engagement is highest with those business models).

The good news: Micropayments have been successful for API use. Many API providers have an option for you to top up your account/wallet with fiat, then your wallet balance is reduced depending on how much you use their API. This is essentially micropayments. However, that brings up another question, if all you need in order to have micropayments is a digital wallet, why use the blockchain at all?

Blockchain is great for micropayments to many different parties especially for AI agents:

a. With fiat: Add $10 to the digital wallet of each API service provider (to avoid credit card fees). E.g Add $10 to ten different wallets (assuming they have a minimum top up amount of $10 so you need $100 just to top up all your wallets)

Additionally, you need to create separate user accounts, complete account verification, etc before you can even top up your account. This works for humans but not ideal for AI agents.

b. With blockchain: Add $10 to a single wallet and send a micropayment to each service provider's wallet only when you use their API.

Blockchain is simply more efficient especially if you very rarely use a given API, are likely to use a ton of APIs, or use AI agents.

Pure XEC adoption

If some catastrophic future happens and USD itself loses global trust, there will be mass flight away from fiat. In this scenario, XEC as a token could see massive adoption as digital cash since users won't want USD-backed stablecoins.

The bad news: This is purely based on hope and dreams. Before a catastrophe of this magnitude shows up, we'll probably see some form of Central Bank digital currency since it enables the government to effectively manage a catastrophe of this scale a lot easier. They will see the writing on the wall and introduce CBDC before this happens so maybe a spike in XEC all time highs before governments eventually crack down and push CBDC down everyone's throats.