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If only the bitcoin algorithm had been designed with a slow-but-steady inflation rate built in. That would have eliminated the speculative "store of value" inc

If only the bitcoin algorithm had been designed with a slow-but-steady inflation rate built in. That would have eliminated the speculative "store of value" incentive and created a true currency. Inflation is not a boogieman. When slow and steady and predictable its a net positive for society. It incentivizes investment and doing productive things with your money instead of holding it in non-productive gold or gold-like digital commodities.

psychlops 3y ago
Slow and steady predicable inflation can be a net positive, but not necessarily. It's current implementation is not slow nor steady. Among other things, unchecked debt inflation leads to global military conflicts without democratic support.
tromp 3y ago
> If only the bitcoin algorithm had been designed with a slow-but-steady inflation rate built in. Or just with a fixed block subsidy. A pure linear emission. That would already strongly deter speculation, as it takes a century to get supply inflation rate down to 1%.
- friend_and_foe 3y ago
  That's my favorite thing about Grin, the simplicity of the emission curve. It doesn't lend itself well to early speculative adoption, but it does work really well for long term utility, which is supposed to be the point of all this. I know, there's so much more beauty in Grin, cut through, your absolutely wonderful proof of work scheme, but the simplicity and elegance of the emission scheme was what first piqued my interest and made me realize this is no steel reinforced bridge, this is a stone pyramid.
adultorata 3y ago
https://quotefancy.com/quote/1792530/Satoshi-Nakamoto-There-is-nobody-to-act-as-central-bank-or-federal-reserve-to-adjust-the https://quotefancy.com/quote/1792530/Satoshi-Nakamoto-There-... Indeed Satoshi design would've been like that, eventually we got Chainlink to 'to know the real world value of things.'and Ampleforth used that in the design to have perfect elastic supply
friend_and_foe 3y ago
The incentive designers of the system disagree with you fundamentally that it is a net positive. In their mind, investing is risk taking for a profit by allocating capital where there is potential to be beneficial, saving money shouldn't involve risk. Saving money isn't supposed to be productive. Yet with a type of money that devalues over time, it is impossible to save money, so one must invest. This leads to all sorts of market distortions, in particular monetization of non money assets such as housing. I personally though do believe that a slow and predictable, to the point of being unchangeable, supply increase is better, but not for the reason you mentioned. I think the system is a commons, having to store and upkeep a record of everyone's wealth, and that simply storing wealth is a use case of money, and so no perpetual inflation is a subsidy of those using the money to save at the cost of those spending. People just storing wealth on a system that requires active maintenance at no cost are free riders. The inflation rate is their share of the cost to keep the system alive. So in these systems I have a preference for a linear, algorithmic perpetual emission of coins. Two of my favorite (from a technical perspective) networks that do just that are Monero and Grin.

psychlops 3y ago

Slow and steady predicable inflation can be a net positive, but not necessarily. It's current implementation is not slow nor steady. Among other things, unchecked debt inflation leads to global military conflicts without democratic support.

tromp 3y ago

> If only the bitcoin algorithm had been designed with a slow-but-steady inflation rate built in. Or just with a fixed block subsidy. A pure linear emission. That would already strongly deter speculation, as it takes a century to get supply inflation rate down to 1%.

friend_and_foe 3y ago
That's my favorite thing about Grin, the simplicity of the emission curve. It doesn't lend itself well to early speculative adoption, but it does work really well for long term utility, which is supposed to be the point of all this. I know, there's so much more beauty in Grin, cut through, your absolutely wonderful proof of work scheme, but the simplicity and elegance of the emission scheme was what first piqued my interest and made me realize this is no steel reinforced bridge, this is a stone pyramid.

adultorata 3y ago

https://quotefancy.com/quote/1792530/Satoshi-Nakamoto-There-is-nobody-to-act-as-central-bank-or-federal-reserve-to-adjust-the https://quotefancy.com/quote/1792530/Satoshi-Nakamoto-There-... Indeed Satoshi design would've been like that, eventually we got Chainlink to 'to know the real world value of things.'and Ampleforth used that in the design to have perfect elastic supply

friend_and_foe 3y ago

The incentive designers of the system disagree with you fundamentally that it is a net positive. In their mind, investing is risk taking for a profit by allocating capital where there is potential to be beneficial, saving money shouldn't involve risk. Saving money isn't supposed to be productive. Yet with a type of money that devalues over time, it is impossible to save money, so one must invest. This leads to all sorts of market distortions, in particular monetization of non money assets such as housing. I personally though do believe that a slow and predictable, to the point of being unchangeable, supply increase is better, but not for the reason you mentioned. I think the system is a commons, having to store and upkeep a record of everyone's wealth, and that simply storing wealth is a use case of money, and so no perpetual inflation is a subsidy of those using the money to save at the cost of those spending. People just storing wealth on a system that requires active maintenance at no cost are free riders. The inflation rate is their share of the cost to keep the system alive. So in these systems I have a preference for a linear, algorithmic perpetual emission of coins. Two of my favorite (from a technical perspective) networks that do just that are Monero and Grin.