While Holochain permits the first zero-fee digital currency, their own Holo token comes with transaction fees. That is understandable when Holochain itself is open source and Holo is a key business model. But that is not a good starting point for an economy of Pacio’s Vision. The Tender currencies will have the following attributes:
The Holochan/Pacio technology permits a zero-fee currency (see Chapter 1), but because it can be done is not why it should be done. The reasons are the great economic benefits. It is beneficial to:
- allow microtransfers
- give any app the competitive advantage of zero marginal cost
- destroy price incentive for competition – nobody can compete with free
- increase adoption by orders of magnitude – people rather rally around a common good
Multiple Mirror Fiat Currencies
Having one digital currency – say, TENDER– doesn’t really appeal to humans who are used to thinking in terms of their national currency. Also, for a good user experience it is desirable to show transactions in the user’s chosen currency. This could be handled by using TENDER internally and showing the respective amount of local currency in apps, but that comes with another problem – volatility. The TENDER would be attached to one currency, probably the US$. If the local currency is volatile versus the US$ that volatility would be imported into the Tender Economy, violating the objective of achieving stability e.g. a Russian user might exchange 10 roubles today, but have a balance of 9.5 roubles tomorrow and 10.5 roubles the day after due to fiat volatility.
The Pacio solution is to use multiple digital currencies in the economy to mirror the national fiat currencies required by app developers. Initially there will be TENDER$ and TENDER€ with additional currencies to be added via a governance vote when the market (one or more developers) call for it.
No pure TENDER cryptocurrency is used. TENDER is always a prefix to a fiat currency such as TENDER$ or TENDER€. When TENDER is used by itself it is a short name for the TENDER digital currencies mirroring fiat currencies.
 For a great description of the benefits of free transactional systems see this article: