So I believe I've come up with an idea that solves several issues with the creation of new currency and would make Red happy.
At first, I did not like this because it seems like it is another transfer of wealth. Then I was able to rationalize how this was not the case.
A hard figure has to be used here, but I don't think misjudging the figure can have catastrophic consequences. The figure I propose is 4%. 4% is the yearly amount of increase, based on a daily supply, allowed in the currency before additional currency will be created "for free."
For example, there are 1 million coins in existence. At 4%/365 days, if more than 109.59 coins are created a day, any amount above that figure will be spread out to existing currency holders. So if 120 coins were created, 10.41 coins would be distributed to the rest of the economy based on their existing proportion of the total coins (like interest from tx fees that don't get refunded--I might now consider actually destroying unrefunded tx fees for more balance).
Pros:
Protection from weakened cryptography. If someone was able to pre-image SHA2 to make currency for much cheaper, they would only be able to abuse this ability to a very small degree.
Left over transaction fees could again be destroyed to help account for an economy that has contracted without effectively destroying work.
Cons:
Those with wealth in ENC would gain more wealth for doing nothing productive. An issue with inflationary and deflationary currencies that I am trying to hotly avoid.
Now... One way or another, those with wealth in ENC are going to gain in times of high demand. Nothing can be done to counteract this anyway. And nothing should be done to counteract this. However, by exchanging their wealth for fiat, they are again taking on the risks of fiat currency. In the far future, fiat risk may be even higher if ENC were becoming the replacement currency. So if they only benefited by a one-time sell off in exchanging to fiat, they lose by no longer having a stable store of wealth in ENC.
Therefore I believe this scenario is truly a win-win.
Some things I'd like to discuss:
1) Should there be an amount of coins produced before this takes effect, or should the figure be higher earlier on and gradually lower (I worry it would cause too much hoarding early on if at 4%)? Is 4% a good number?
2) Should the coins be given to all holders of ENC, or only economic producers such as merchants that secure the TradeNet? Would this be seen as unfair?
3) Should transaction fees be destroyed, or is this really just the same effect as giving unrefunded tx fees to all holders of ENC (perhaps by destroying them the psychological effect of inflation will be reduced and the currency will appear more stable)?
4) Should it always simply be based on daily creation, or should yearly factors be taken into account? (i.e. if 10 days went by with no creation then on the 11th day 120 coins were created, should we give out free money?)
I have also significantly updated the section on
Economy in the wiki. Not related to this discussion topic.