Topic: Monero Economy - page 22. (Read 43688 times)

The great thing about crypto is that there are no need for promises. Cryptocoins have proof (Proof of Work). That's far better than any promise. Proof of work is what makes gold (or any commodity money in existense for that matter) valuable. Excluding fiat, all money from the beginning of time had proof of work in some form or another. The mere presence of gold is proof that someone, somewhere, put it real effort to obtain it. Proof of work is the most basic form of intrinsic value.

A certificate is a promise that such proof exists. As mentioned upthread, this was important for trade, as paper money (promise) is much easier to carry and store than heavy gold coins (proof). However, as I already stated, promises can, and will be, abused:


Again though, such a promise is unnecessary in crypto, as the proof is right there in the coin.

I don't see your point. Governments can still force exchanges to collect your ID whether you're buying Monero or Bitcoin. What's the difference? How will an anonymous crypto solve that?


You cannot have it both ways. Long-term value storage is slow money. Fast money is easy to get, easy to spend. It's a hot potato. Fast money burns a hole in your pocket. There is urgency by design. Economies of scale depend on fast money. High volume trade requires stimulation. People don't just pull out their wallets en masse for no reason.

Liquidity always has a cost. Wealthy folks don't store their money in savings accounts. They own appreciable assets that are liquidated on an as-needed basis.


The U.S. Dollar inflates much quicker than 2% a year, has no intrinsic value whatsoever, and billion dollar businesses handle it just fine. In fact, they need it, because such businesses depend on fast money.

Also, just because the money supply increases by 2% does not mean the trade value of your coins decreases by 2%. Crypto is not fiat, and so the same rules do not apply. PoW currencies have real intrinsic value, so increasing the money supply does not affect the buying power in the way you might imagine. As an example, the world's gold supply is debased by around 3% annually.

Even if inflation was that simple, you'd have to significantly inflate the circulating money supply in order to see a decrease in trade value. An increase in total supply does not automatically mean more money exchanges hands.

Ah, so it's more of a crutch that doesn't need to be necessarily part of the blockchain. I hadn't considered it like that at all.

How would you see payments from pool wallets direct to exchanges? That was a major part, along with the API, that I saw busoni in IRC talking about. Granted when one usually sends money this way -- it's for dumping onto the market .. but people are losing money either way and telling them to send to their personal wallets first is just an extra nuisance that can be figured out with code.

A correlation I might see here is how would one setup automatic monthly payments without the usage of something like the tx_id field? I would hope this could be totally outside of the blockchain for numerous reasons, but by what route would it manifest? Moreover, with previous posts in this thread regarding this as a store of value or a currency .. do we even view a scenario where automated payments happening as possible?

Either way, from what I'm gathering this would be best solved by a capable API?

I'd like to see it just go away. There is not really any good reason to store blobs of data in the blockchain and there are good reasons not to. However, before that can happen the tools need to improve, especially APIs for wallet access. The tx_extra field is a workaround right now because exchanges can't feasibly create a separate deposit address for each user the way they do for every other coin. I don't have any inside knowledge but I would guess they rather hate it anyway, since it must cause no end of support problems when users mess it up.

Toward this I would only expect claims of people "getting something for nothing" from the Bitcoin (or any alt) community in respect to the amount of hurdles that had to be overcame in Bitcoin. I do; however, think you're correct in your rejection of this. The claim is founded on those that present their opinion that they were overcoming these adversities for their own currency, when in fact they were overcoming them for any future implementation of any cryptocurrency by the simple grace of the open source mindset that's prevalent here. Anyone saying differently is just worried about their market cap. Maybe I should spend some time understanding what these licenses are though before I say more about that.

To say that you appreciate, fundamentally, someone else's work and then continue it in your own way is by no means wrong or worthless. What makes value, here, is the ability to withstand whatever comes in future that you have created for yourself (and make sure that it will indeed be different than the one you've branched from), not only what those have done in the past. The key here is to never forget that you once or still stand on the shoulders of giants -- even in your own pursuit of becoming one. I say this under the presumption that if put into the same scenario, I would have made an attempt to overcome it in a similar fashion.

As far as being able to quantify a lower risk of failure, well that's an incredible concept. It's as if you're asking : What, of value, have we created here? Amongst a sea of questions, that is one of the biggest. To me, value is one of the major factors of calculating the "probability of a flaw or event fatal to the project". While what defines value, to me, is what Monero is quantified by.

In that mindset, Monero has a constantly growing team of developers, community members and speculators. It is based on CryptoNote technology. It has begin to provide the tools of mass adoption for the CryptoNote technology, rather rapidly in my opinion. Those three things I know for sure.

Other variables I'd like to see are a specific outline (in list form) of CryptoNote technology as it is now and what we can add to it (I know Taco already did something with MIP's on github - awesome way to start), and improve on it. I'd like to see a standard usage protocol for the tx_extra field, for at least until a time in which that responsibility can be dictated to other groups. It's data recorded on our blockchain and we should have a say of what it is, in my opinion. I'd like to see large sized businesses become a welcomed addition to the variables, as well as one man shops. I'm sure there's a lot of other things that can be added here, so I'd like to hear some ideas other ideas as well (I'll try to think of some more as well).


Talking about this problem, as constructively as possible (and learning how to tune out the noise when it comes -- it has and will always continue), will be one of the major innovations of this currency. A currency/store of value that knows what it wants and where its going will grow up quick.

This is a good point. If your initial trade into the currency isn't anonymous, per bitcoin's publicly available blockchain .. then your pursuit of anonymity is potentially (most likely) lost. You may still have private transactions that can't be traced if you were to trade into Monero, but the fact that you traded first into Bitcoin and then to Monero would be a weak link in the anonymity chain. I guess the question that would come up is exactly how one would obtain Monero (other than mining) in the first place without compromising identity? I've been told avenues using coinjoin over tor/i2p are only partially anonymous at best .. so that puts us back to buying into it face to face for now. Unless you have other ideas?



With the massive amount already being produced daily, i agree that we have enough debasement for now. I think the main focus I see come up is how to handle it when the large block rewards are close to zero (quite a number of years)


Have you considered this in respect to the adaptive block sizes and rewards? Factoring in another scaling variable may prove problematic to tune correctly .. when the block size itself is still a factor in the equation. Would you support a move to this at the end of the high block rewards above 0.xxxx MRO (almost dust sized rewards), or would you see it as something that can be included and tuned well before that time. Where would transaction fees come into play here? Could they overcome the sliding inflation?

I think we all agree the tendency to accumulate could be offset with a form of inflation (static or dynamic), but I'm coming to see that the tendency to accumulate may still be there despite that (I'll have to do quite a bit more reading on this, and know right where to look). A perfect inflation would manifest as a constant balance to keep the marketcap approaching infinity at an uncontrolled rate. Presently I know that a certificate issuing agency, based off of Monero holdings would be highly critical of an inflation ... but at the same time I can see that same accumulation impeding the ability to keep it a "spending currency".


I hold the opinion that both a store of value and the need for it to be currency will come to be a central point in this currency. I could see many troubles with a $77 million business trying to operate within the confines of what Monero, being only a currency, and not a valid store of value. Imagine trying to use purchase orders, only to have your currency be worth 2% less than it was when you sent it out last year. I see that some form of debasement is necessary, but for it to do both value would have to trickle out very slowly. Maybe this is a malformed opinion, but perhaps you could share insight?

Large-scale botnets that are on the orders of magnitude higher than a few amazon EC2 instances are what I'd be worried about. I have seen them come up numerous times as being a limited resource, so my fresh opinion is mixed on the issue.

If something massively scaled were to pop up, I would think it would be interesting to see exactly what extent would be necessary to prevent them through whitelisting. Though there are currently far more dangerous aspects of the protocol that would cripple botnets.

Got it, thanks. I think I mentioned in my above post that perhaps much of this historical transaction data could be kept off chain .. in something similar to a trusted banking system that issues certificates based on its own Monero holdings. How this protocol could scale with microtransactions/high trading volume is something that is yet to become fully apparent to me .. as we don't currently have need for them. I would suppose those with far more time evaluating cryptocurrencies than me would have useful insight here. Perhaps it could be done on chain though, to remove bloat and still keep on-chain transactions?

I'm working my way down the thread post by post.


If Monero was accepted as having similar characteristics to gold, would you see these promises manifesting outside of the blockchain, or as a part of it? I could send someone a certain amount of gold, or I could issue a promise that their gold (ex: Monero) will be ready to be placed in their hands on demand. I've imagined an infrastructure, like banking, that can be built on top of Monero .. specifically utilizing the tx_extra field (or perhaps not, as it may be better utilized in things like recurring monthly payments). I'm unaware of how this could come together, or if "banking" is even the correct word for what I'm trying to describe. Your mentioning of certificate issuance indicates, to me, that you are of a similar opinion.


I'm trying to define a word here. When you mention volume, are you referring to trading volume (# shares traded) or something else like the specific amount of value traded (not # of tx's) in a certain amount of time? In bold, which features  of metals do you see, other than being fully backed by one's strength, lean toward high value transactions, while at the same time "contribute to their inferiority as a value store"? Could one be that they have functional uses other than a store of value (eg, electroplating)? Or something more economically related, the fact that they are capable of being more easily seized/become a target of seizure with an increased size of holding?

In another thread,  the plausible argument was made that MRO is presently overvalued at 1/342 BTC.  This is a reasonable position, if one takes the historic price series of bitcoin to imply a discounting curve, and apply that to MRO.

I had considered this previously, but rapidly rejected the argument, on two principal grounds:

1) The adversities which BTC overcame during that time constituted existential threats.  No successor crypto faces those adversities.  Much has been learned.  The probability of a flaw or event fatal to the project is vastly -- and I do mean vastly -- lower.  However it is challenging to accurately quantify how much lower.  I would dearly love some input on this point.

2) The adoption process must be expected to be much more rapid for a successful candidate to the privacy-enhanced niche, because of the precedent and conceptual familiarity created by bitcoin.  What BTC did in 5 years should be done in a fraction of that time in MRO, if it is to inherit that niche.  But again, even a very crude quantification of how much more rapidly would be essential to a rational application of the discounting method to estimate fundamental value.

I need parameters.  I will work on this later, as time permits, but this message is a solication of comments, input, facts, numbers, theories. 

This is actually a solvable problem, if only by degree, with error bars.  And the value of solving it can be quite large.  It will require some creative and some rigorous thought, as well as factual data.

While this fundamental approach to valuation is a reasonable one, it is not comprehensive.  There are many ways to value an instrument.  In theory they should all tend to converge to the same value.  This theory has been true in the case of bitcoin, and it will be informative to apply it to monero.

read the announcement op.  it is factual.  'scam' is not well-defined, but mro has been carefully planned to avoid any taint of scamminess such as bytecoin, darkcoin have suffered due to premining.

Is this coin now scam or not? I'm interested in buying this coin but on the main thread of monero there are some members saying this is scam.

So guys, please tell me the truth about Monero Economy.

Thanks in advance.

A goal of the original design is "egalitarian mining" which means ordinary computers can be used for mining. Obviously newer and more expensive and powerful computers will mine faster, but you should get your fair share (small).

Yes, you can mine on pools. Or you can try your luck at solo mining. 

Am I able to mine this coin with my old dual core -computer?
Thx for an answer.

Awesome discussion here guys, sorry I cross posted and left. Things got busy and I hope to contribute soon.

Before I do though, I'm cross-posting this because it seems like it's heavily economically related

The entire market cap at the moment is about 700 BTC with about 4% of it traded each day. With the advantages MRO gives over the other concurrent cryptocurrencies the market cap is very small I think. A lot of FUD going on now, but I won't sell mine at this price. In order MRO to get to the DRK market cap the current price of MRO should be 0.08 BTC - about 87 times higher then it's now.

Edit: I actually sold with all those dumps. Now it's time for the price to rice.

Indeed we've seen a lot of drama surrounding the tuning of parameters already.  Your point about indeterminacy is well taken.  But I don't think these really militate against a principled, formula-driven adjustment mechanism.  PoW difficulty adjustment has worked pretty well and is very comfortably familiar to crypto users.  Instituting a formula-based deterministic (but yet undetermined) inflation which is designed to stabilize price, is a change in contract, and there would always be some who were disillusioned by any change whatsoever, but it is not a change in the present contract.  It would have no impact until it became needed, and thus wouldn't bother most of the present users.  A substantial proportion of them would agree that a stabilizing inflation would add to the value of the coin, it's distinctives, and it's likely future transaction volumes.  There is also comfort in the expectation that price will be more stable, so it's a trade-off.  After all, we're not talking about orders of magnitude here, just a few % in supply annually, at most, and only years in the future.  It doesn't change the near-term speculative supply/demand picture at all, and offers some incremental improvement in the long-term value-investment picture.  I think it would work, for Monero.  There are several arguments in favor of it, and I haven't noticed any strong ones against it yet.  Still listening though.  Unlikely though it may be that any such change is adopted in Monero, it seems worthwhile at least to build a change-set which implements such a mechanism, as it would clarify the issues and methods.  Adding it to my TODO list.

Your suggestion of transaction-dependent debasement is similar to what I mentioned a couple of posts back, but as I said then, I fear it would only hurt adoption, as most folks aren't particularly keen on an indeterminate future. There is comfort in knowing exactly how large the money supply will be 5, 10, 20 years from now.

If BTC's success compared to DOGE is in fact due to it's deflationary nature, it's merely perceptual, as both coin's money supplies are presently increasing. Perhaps that's your point. If by "debasing early" you mean making your intentions transparent that the money supply will forever increase, are you suggesting it's better to "advertise" a finite supply with the intention of debasing in the future? The "give the people what they want now and change it later" approach makes sense, but can be quite challenging with decentralized systems

I agree with your statement that the infrastructure isn't ready, but it never will be if there isn't a demand for it. A cryptocurrency has to achieve tx volumes high enough to push the limits of current infrastructure before more scalable solutions will be put in place. I fear we will never get to that point with deflationary money... and even if we do, then what? Hard fork? I don't see it happening at that point. What will happen is a new inflationary alt will be introduced, and we will be right back where we started.

That's why I think it's important to have these features in a currency from the beginning. With a bitcoin style emission, it would be decades before the block reward would start to reverse anyway. We just have to figure out how to educate people and get them to adopt it.