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> You want a cryptocurrency that isn't absurdly volatile? Make it steadily inflationary, not steadily deflationary. There are cryptocurrencies that do this, Pe
by VMG 12y ago
> You want a cryptocurrency that isn't absurdly volatile? Make it steadily inflationary, not steadily deflationary.
There are cryptocurrencies that do this, PeerCoin and Dogecoin for example, and they don't seem to work out, maybe because there is a lack of incentive to be an early investor if your investment steadily loses value.
There is no significant barrier to entry for creating a cryptocurrency that represents your economic ideals, so far however, only Bitcoin seems to have the right mix of incentives.
- riffraff 12y agohow do you judge that peercoin and dogecoin don't work out? They seem to have been the "next big" currency for market cap after BTC and LTC for the last 9 months, which would point in the direction of, at least, inflationary nature not being such a big deal.
- scrollaway 12y agoThey are talked about because Bitcoin is talked about. Their value is ridiculously low compared to BTC's.
- vidarh 12y agoTheir value is ridiculously low compared to BTC's, but they're also years younger than BTC. We have no basis for saying yet whether they'll work out.
- crdoconnor 12y agoBitcoin got first mover advantage. I don't think its popularity is due to it getting the incentive mix "just right". Besides, the characteristics of a "good coin" depend entirely on who you are and what your goals are. Some people want to gamble and get rich, others are looking for a reliable store of value, others are looking to transact. The ideal coin will have different properties for each of these people, but no coin will be able to satisfy all three groups completely. They all need one another and they all have competing goals.
- VMG 12y agoFair point. I don't think that Bitcoin's parameters are necessarily "just right", but I'd argue that they are "close enough". An ideal coin that, as you state yourself, does not exist, but neither does an ideal traditional currency. Every currency and payment system out there has it's flaws, but not every flaw is necessarily fatal. Particularly the deflation argument does not predict that Bitcoin will fail, it states that if Bitcoin replaces traditional currency, the economy will fail. If you choose to believe it however, it's an argument to hoard Bitcoin from a rational economic perspective. People looking to criticize Bitcoin should rather focus on the centralized mining problem.