The Psychology of Free
My Daily Encounter
Last weekend, I visited a convenience store for lunch and received a "XX Brand Ice Cream ¥5 Discount Coupon" at checkout.
Thought process:
- "I don't particularly like ice cream"
- "It's too cold for frozen treats anyway" (shivers)
I left without redeeming it.
Two days later, at the same store, I received a "Free XX Brand Ice Cream Coupon."
Immediate reaction:
- "Free? That's rare!"
- "My freezer has space anyway..."
Now it sits in my freezer.
The paradox? I originally had zero interest in winter ice cream.
Your Daily Scenario
Scenario A:
- Magazine A: ¥100
- Magazine B: ¥80
You'd likely compare content value before purchasing
Scenario B:
- Magazine A: ¥20 (80% discount)
- Magazine B: Free
Instant reaction: "Free? I'll take it!"
The ¥20 price difference remains constant, yet rationality disappears when "free" enters the equation.
Crypto Community Observations
During Lunar New Year:
- PTT giveaway: "10 random commenters win crabs!" (no guarantee)
Response: Mass participation - Exchange promotion: "Stake ¥500 in platform tokens for 18 guaranteed red packets"
Response: "Too complicated. Pass."
Why reject guaranteed rewards while chasing uncertain freebies?
"Free is a peculiar 'price.' When something is free, we abandon cost-benefit analysis and instinctively choose it." — The Psychology of Money (2018)
The Free vs. Paid Spectrum
| Situation | Paid Option | Free Option | Behavioral Outcome |
|---|---|---|---|
| Ice Cream | ¥5 discount (¥25 final) | Completely free | Free wins overwhelmingly |
| Magazines | ¥20 "bargain" | Free distribution | Free triggers impulse |
| Crypto Rewards | Stake ¥500 (guaranteed) | Lottery-style (no cost) | Uncertainty preferred |
Key insight: Any requirement to spend money—even heavily discounted—creates psychological friction that "free" obliterates.
The Business Perspective
Imagine you're a CEO evaluating distributed ledger technologies (DLT):
Option 1:
- ¥0.0002 transaction fee
- Cannot process zero-value transactions
- Fully decentralized
Option 2:
- Zero fees + zero-value transactions enabled
- Not fully decentralized yet
Which would you trial first?
👉 Why leading enterprises are re-evaluating fee structures
The IOTA Advantage
IOTA's Tangle technology delivers what others can't:
- No miners → No fees
- Zero-value transactions enabled
- Users only contribute negligible computation power to validate two previous transactions
This explains why IOTA Foundation faces coordinated attacks—they've already solved the "free" challenge. If they achieve full decentralization...
The implications would reshape entire industries.
FAQ
Q: How can IOTA sustain itself without fees?
A: The protocol doesn't rely on financial incentives—validation occurs through network participation.
Q: Isn't "free" usually a marketing gimmick?
A: Traditional "free" services hide costs elsewhere. IOTA eliminates the need for such models at the protocol level.
Q: What stops spam attacks on a feeless network?
A: IOTA's PoW requirement for spam prevention is computationally trivial for legitimate users but exponentially costly for attackers.
👉 See real-world adoption cases of feeless DLT
Conclusion
From ice cream to enterprise DLT solutions, the "free" effect operates on a primal psychological level. IOTA doesn't just leverage this phenomenon—it institutionalizes it through revolutionary technology.
As adoption grows, the true disruptor won't be the tech itself, but humanity's rediscovered preference for frictionless value exchange.