Topic: A coin with a floating supply. Is it possible? - page 4. (Read 645 times)
Myself, I can't think of plausible ways how that problem can be efficiently solved in practice. Yet I agree that without adjusting the supply of a coin if such a need arises, in a mostly automatic way, it may become a major roadblock on the road toward smooth expansion of an economy if a cryptocurrency becomes a regular means of exchange there. In this respect, Bitcoin is like gold of the 19th century, when the latter had become a hindrance instead of a valuable tool for facilitating free exchange of goods. After people realized the shortcomings of the gold standard, they turned to fiat not backed up anymore by this metal or any specific asset. Maybe, we are in a similar situation right now. Simply put, if we don't know a solution, it doesn't mean that there is none.
I know it is a very controversial topic (mildly speaking), so I ask everyone to be civilized and remain calm. All the coins that I heard of have either a fixed supply, like bitcoin with its 21M coins, or a supply which is determined by some algo. But this is definitely not what real economy needs. Modern economies are built around fiat while the amount of fiat in circulation can be changed in pretty much arbitrary way. If we discard the cases where the power to print money is heavily abused, this system works flawlessly (well, at least in theory). If an economy expands, more money is created by banks via credit, if an economy constricts banks give less credits while some money gets destroyed via defaults of the borrowers.
The point I want to discuss here is if we want a cryptocurrency to really act as a better alternative to fiat, its supply should necessarily be floating and depend on the needs of an economy, not on some preset, strictly deterministic algorithm, however sophisticated or complex it could be. How feasible is this? If you think it doesn't make sense, then what are your reasons?
The point I want to discuss here is if we want a cryptocurrency to really act as a better alternative to fiat, its supply should necessarily be floating and depend on the needs of an economy, not on some preset, strictly deterministic algorithm, however sophisticated or complex it could be. How feasible is this? If you think it doesn't make sense, then what are your reasons?
If you want to create a coin with a floating supply, which is no random and can be used for certain purposes, you coin must be centralized. Otherwise, there will be no one to determine it.
Basically, centralized fiat money is the cause of the number of problems, which bitcoin and other crypto with fixed and unchangable supply may solve. At the moment, every national central bank which has monopoly over currency emission, acts no better than a money counterfeiter.
What do you mean by 'needs of an economy', by the way? Crypto with a fixed supply and high level of decentralization is more or less inflation and deflation-proof, while fiat money is being used for boosting inflation on a regular basis, which inevitably results in economic crises.
I know it is a very controversial topic (mildly speaking), so I ask everyone to be civilized and remain calm. All the coins that I heard of have either a fixed supply, like bitcoin with its 21M coins, or a supply which is determined by some algo. But this is definitely not what real economy needs. Modern economies are built around fiat while the amount of fiat in circulation can be changed in pretty much arbitrary way. If we discard the cases where the power to print money is heavily abused, this system works flawlessly (well, at least in theory). If an economy expands, more money is created by banks via credit, if an economy constricts banks give less credits while some money gets destroyed via defaults of the borrowers.
The point I want to discuss here is if we want a cryptocurrency to really act as a better alternative to fiat, its supply should necessarily be floating and depend on the needs of an economy, not on some preset, strictly deterministic algorithm, however sophisticated or complex it could be. How feasible is this? If you think it doesn't make sense, then what are your reasons?
The point I want to discuss here is if we want a cryptocurrency to really act as a better alternative to fiat, its supply should necessarily be floating and depend on the needs of an economy, not on some preset, strictly deterministic algorithm, however sophisticated or complex it could be. How feasible is this? If you think it doesn't make sense, then what are your reasons?
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