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To minimize the number of coins and bills people carry, denominations should grow geometrically. Then no one has to carry more than one of each denomination. 1
by spodek 15y ago
To minimize the number of coins and bills people carry, denominations should grow geometrically. Then no one has to carry more than one of each denomination.
1 dollar, 2 dollars, 4 dollars, 8 dollars, and so on until you have as high a denomination as you want.
half dollar, quarter dollar, eighth dollar, and so on until you have as low a denomination as you want.
The mint can make any denomination a bill or a coin. When inflation makes one too small to care about, you can stop making it; if you want, at the same time you can increment at which denominations you stop making coins and start making bills.
If inflation makes your bill/coin boundary something weird, like 32 dollars, you might want to create 1 new_dollar = 32 dollars and start again. If your inflation is growing so fast you have to keep devaluing... well, that's another problem.
EDIT (to bazzargh's comment): this scheme doesn't obviate stores needing spare coins and bills to make change. If Alice and Bob both have ($1, $4) here or ($1, $5) in old scheme, in neither case can Alice pay Bob $2. I could be missing something, but the new scheme seems no worse than the old in this regard.
- bazzargh 15y agoNo, that won't work. Alice, Bob each have $5. ($1, $4). Alice owes Bob $2. How does she pay? The problem of making change is worse for stores. Having lots of ways to add to the same amount is an advantage, not a disadvantage. Interestingly - in terms of mathematical purity - we've already abandoned a system that was optimised for division (£sd - the pre-decimal £ evenly divided by 2,3,4,5,6,8,10,12) to one where we've optimised for ease of addition and subtraction - which we're taught in base-10.
- rayhano 15y agoWhat a fantastically reasoned comment. People don't often praise good comments enough. I didn't see decimalisation this way until now. Interesting.
- stock_toaster 15y ago> The problem of making change is worse for stores I read an interesting article recently (can't seem to find it now), about Zimbabwe's hyperinflation of local currency and how they are using the USD as their unit of local money. This has caused issues because coins are expensive to ship there, and yet in Zimbabwe the value of small denomination coins are still quite relevant. This has apparently caused extreme issues in stores, where people are either waiting for change for long periods, or having to buy things they don't need to 'round up' to the next dollar. Interestingly, apparently the two dollar bill is very popular there. edit: found it: http://www.nytimes.com/2012/04/25/world/africa/using-us-dollars-zimbabwe-finds-a-problem-no-change.html http://www.nytimes.com/2012/04/25/world/africa/using-us-doll...