We discussed a bit of this video in “Get ETN through mobile operators” -thread with @Blues_brother . But to get more visibility, on what I believe to be important point, I’ll summarize the question here too.
Where I saw Richards answer to the first question fall a bit was when he started talking about how will the “agent” get hold of more ETN, to pay her/his bills to the operator. At around 5:10 Richard said: " if he (the agent) now wants to get hold of ETN and hes got cash from the feature phone people. He can actually start saying: “I will sell you some ETN” to people."
At that point I was just thinking: “Wait what? How is the agent going to get more ETN by selling ETN to people?”…
How is the agent that is selling top up vouchers to people going to get his ETN to pay for those vouchers to the provider? Lets say he gets 30% of what he needs from the smartphone users in ETN and rest 70% as cash from feature phone users. At that point, if he wanted to pay the bill to the provider in ETN he needs to get those 70% cash to be turned into ETN. And if he wanted to sell ETN to people, he would need to get even more ETN from somewhere. So where does he exchange this 70% cash into ETN and where does he get the ETN that he would want to sell to people?
This is the problem I had with Richard Ells’ answer. He talks about not needing exchanges and it is a closed loop. But In my view there is a huge “plot hole” in that.
All in all, I think the phase when loop can be sustained through ETN team (mobile miner) and the mobile operator (marketing efforts with their ETN) will pass rather quickly and someone will need to get more ETN to the people from exchanges. Otherwise why would we be expecting ETN’s price to go up? Sure user numbers are nice but if they do not create demand, they do not mean much when it comes to price.
