Think of it from a small hobbyist perspective: I want to host a few small workloads, but I don’t want to deal with reoccurring billing. Maybe I have money now, but can’t guarantee it later. With this scheme, I frontload with a substantial amount of prepaid credits - say, $150 - while only using $5 or $10 a month. In theory, if the interest rate is correct, I could earn more on interest faster than the prepaid credits get drawn down - thus having a perpetual instance for a one-time charge.
Personally? I think that’s a fair and reasonable arbitrage opportunity, because it also means the vendor can take that excess Capital and invest it themselves to create a return greater than the credits paid out. In practice, some greedy jerk C-Suite inevitably places caps on payouts or time limits on credits to ensure they capture more for themselves and leave less for their customers.
I guess what I’m saying is that I dig the idea, I’d love to see it implemented by more vendors, but I also know it’ll get rules-lawyered to death in nanoseconds under the current market incentives.
Oh, that's not even a challenge. The reason to offer a scheme like this is basically to abuse the fact that a human customer will value this disproportionally to the cost of providing it. But if the customer perceives that value, that means you can take that surplus, which isn't real, and then extract that surplus from almost anything else that comes in the form of real money, and create something that humans value as much as the original service, but now with more money to the service provider. Converting the customer irrationality into money means you don't even need anything as obvious as a cap, which sounds scary. You just raise your other prices.
badatnames•33m ago
Imustaskforhelp•20m ago
Also, how does it compare to say, accepting gold or treating a gold based ledger instead treating gold as a currency and similar ideas?
Also could this re-classification be ever useful too? For examples bonds being treated in such way?
bko•11m ago
A long time ago I remember reading about banks that want to provide incentives for saving that amount to basically lottery tickets. The idea is that people aren't thrilled about a savings account that pays 2%, but if instead they offered a monthly 1 in 50 chance to get 100% return (same expected value, ignore compounding), people would like that a lot more. But this amounted to essentially a lottery and that's a state monopoly.
dmurray•4m ago
Everyone here seems to have got a present of €20 Prize Bonds for a 10th birthday from an aunt or grandmother, yet people from outside are always surprised that such a product can exist.
bojangleslover•2m ago