The history of the internet has unleashed unmeasurable engineering effort into the design of a new protocols. However, perceived usefulness, as measurable by counting features or gauging elegant design, has not always been a good predictor for adoption. The search for explanations has led to RFC, a comprehensive list of success factors along with case studies of successful protocols. Many of these success factors can, as well, be framed in the language of network economics. This enables us to seek for solution approaches in this discipline towards the vision of considering the economics of new Internet protocols already at the design stage. This position paper in particular presents thoughts inspired by the recent success of Bitcoin, a cryptographic currency system.

The most salient feature of the Bitcoin protocol is its reward mechanism for early adoptors. Although not all ingredients of Bitcoin’s success generalise to arbitrary protocols, having built-in payment systems could substantially widen the design space for
easily adoptable protocols. Payments enable mechanism to internalise the externalises that emerge during the transition phase as well as in steady state.

To find out more about how Bitcoin adoption is leading the way for other projects, and any disadvantages that should be considered, download this research paper.