Topic: Hayek Money: The Cryptocurrency Price Stability Solution - page 2. (Read 5937 times)

Jeff Fong wrote a piece called From Hayek to Satoshi and Beyond talking about how Bitcoin fits in the picture, I think you'll find it relevant
http://letstalkbitcoin.com/hayek-to-satoshi-and-beyond/

bitcoin haven't achieve an ideal price yet,it's too early to talk about price stability.

The paper made it into the shortlist for the Blockchain Awards of the Bitcoin Foundation Conference 2014, category Visionary Academic Paper.

The funny part is that Nakamoto's paper is included too. Hey! Einstein is not supposed to be nominated for the Albert Einstein award! There is no competition. Now if only Satoshi would show up to receive the Award...

Since Satoshi appearance is unlikely, and instead I will be attending the conference, I could appreciate if the large silent majority of my enthusiastic supporters joins forces and votes for my paper at
https://docs.google.com/forms/d/1XGPghf1OsdgTmrsiEscWqcPjssfDX3u8IE-PBOLebc4/viewform

If you would rather vote for Satoshi, I might concede to your preference.

No disrespect for the other shortlisted paper "On the origins of Bitcoin" by Konrad Graf: [url]http://konradsgraf.com/blog1/2013/10/23/on-the-origins-of-bitcoin-my-new-work-on-bitcoin-and-monetar.html[url]

at 128% annual volatility I am seriously worried about your definition of normal :-)

This is an unfounded claim. Cryptocurrencies have been adopted so far by "just" some hundreds of thousands of people for a very limited part of their wealth. If billions of people are going to use it, cryptocurrency value is going to skyrocket beyond imagination. Price instability is going to be as dramatic in the coming years as it has been in the last years.

I agree. This has little to do with the core of my paper.

Sorry but you are off-track here.  Stable price does not mean stable value (please read the paper if this point is not clear). A stable price currency has always been the holy grail of every economic theory. Hayek Money is such a monumental achievement.

Relative stability of Bitcoin vs several commodity prices (i.e. Oil, Gold and silver, etc) will probably occur naturally in the near to medium-term future. Fiat inflation will give us the illusion of higher BTC prices, but our real wealth will be fairly stable since the cost of living is so much higher every year.

During the early years BTC prices have dramatically outperformed gold, but that trend might slow down until stable.
Bitcoin still provides a current chance to do much better than gold. Given a clear choice many people will not actually want anything too "stable".

I will work on a one page introduction, longer than the abstract, shorter than the whole paper.

I especially like the kind used by Satoshi Nakamoto and Friedrich Hayek. Moreover, they might help to cure short attention span ;-)

TLDR;


I have 3 words for you "SAY NO TO DRUGS"

great.

please notice that while the structure and content are stable, I'm actively fine-tuning the narrative and incorporating some peer-reviewing, so you might be better off downloading just before reading.

I've received some feedback at http://redd.it/24p2qt, but nothing more than quick reactions to the abstract so far. At 35+ pages it is surely not a casual reading, but it can be a rewarding one.

I look forward to comments

Thanks for sharing the link. I got it downloaded to read as soon as I get a chance.

I've been working on the proposal for a cryptocurrency with an embedded smart monetary policy to ensure price stability

http://ssrn.com/abstract=2425270
Last revision: May 8th 2014

Hayek Money: The Cryptocurrency Price Stability Solution

The Bitcoin protocol has enabled competition between digital cryptocurrencies and traditional legal tender fiat currencies. Despite impressive cryptocurrency adoption rate, dramatic deflationary price instability has thwarted affirmation of the cryptocurrency leadership. Price stability can be achieved by dynamically rebasing the outstanding amount of money: the number of currency units in every digital wallet is adjusted instead of each single unit changing its value. The apparent awkwardness of this new monetary policy paradigm is discussed at length, proving that its only real novelty is about fairness and effectiveness. The proposed monetary base adjustment has neutral impact on the overall wallet wealth, as it does not introduce any arbitrary distortion into the intrinsic value dynamics of the wallet. The adjustment is based on a commodity price index determined with a resilient consensus process that does not rely on central third party authorities. It is posited in this paper that a digital cryptocurrency adopting such monetary policy is Hayek Money, so named from the Nobel Prize-winning economist: namely the best money ever devised, the new good money standard providing stable prices for a new economic era.

Ferdinando M. Ametrano