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I still don't understand the mindset behind all these clones of BTC thinking having a hard cap and eventual deflation in the monetary supply of their cryptocurr
by zanny 14y ago
I still don't understand the mindset behind all these clones of BTC thinking having a hard cap and eventual deflation in the monetary supply of their cryptocurrency is a good thing.
What I want is something like PPC, except do it even better - you want a system that will generate coins just enough to make hoarding money a net loss. So if the coins themselves are rapidly becoming more valuable, you should introduce some algorithmic way to inject a lot of coins into the monetary supply, and if they are losing value you want to throttle coin generation.
It would require the distributed network to agree on what the coins value is doing - which would be very complicated. But just flat fixed inflation of the monetary base annually works better than having a finite money supply that eventually means you are doomed to a deflationary spiral.
It is probably chief amongst why BTC is such a commodity right now - since we already have over half the total bitcoins already in the system, the monetary base over the next hundred years is only going to grow less, and as more people want in on BTC, there is higher demand for a resource that has dwindling supply (especially once the rate of lost wallets and the coins therein outpaces the mining of new blocks).
- lmm 14y agoI think the simplest and most effective approach would be fixed difficulty. That way 1 FRC is always worth a certain number of hash calculations, so it's anchored to something real, but apolitical (the value of computer hardware); it follows natural inflation in line with Moore's law, and the money supply grows in proportion to the users. And this would actually mean a simpler codebase than what bitcoin does. AIUI the main argument against this is that it does nothing to encourage early adopters - why would anyone use my FRC when they can always just start mining them later if they become popular. Still, I'm interested in pursuing this if there's demand.
- maaku 14y agoDid you read TFA, specifically the part about Freicoin? http://freico.in/ http://freico.in/