Topic: [XMR] Monero - A secure, private, untraceable cryptocurrency - page 1218. (Read 4671924 times)

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I'm also not arguing that there will be no speculation, clearly that's never going to be the case. However, I do think that most speculators don't have a very high risk tolerance, and thus there will be enough of a fundamental difference (vis-à-vis Monero's slightly inflationary nature when contrasted with Bitcoin's deflationary nature) that there will be less "hoarding" for the sole purpose of becoming overnight millionaires.

Just as the price of gold is mostly because of hoarding and speculating. It's "utility only" (electronics and jewelry lets say) value is so much lower.

You're right. Bitcoin's market cap without speculation is probably not much. But I don't think that infinite tail emission changes this in XMR at all. Predictable changes in supply will constantly be factored into speculation. DOGE's value went down during halvings. People knew the changes in supply were coming. The majority of XMR's value will always be based on speculation. It's inescapable, sorry to say.

Maybe I must put it differently: if genuine demand for Bitcoin by "ordinary" people (ie. not speculators) was the sole price driver, what would Bitcoin's price be? $1 - $3 maybe? (I have no idea, I'm thumb-sucking here) Either way, the gap between that and the current price means that speculators are propping the balance of the price up. What we are hoping to achieve with Monero (in particular with the infinite tail emission) is to reduce that gap so that the price of Monero in the far future more closely reflects the actual demand than any artificial demand. Who knows if we're on the right path or not, but I do sincerely believe it's a better path than just cloning Bitcoin;)

I think you are discounting the valuable role of speculators in any market. A month or so ago, I've committed to eventually owning about 0.1% of all XMR. I do not intend to provide any "genuine, honest effort and work" to XMR besides buying it. Yet I believe that my efforts will pay off within two years, and I believe my actions will contribute to XMR by soaking up some supply. I don't think this makes me a criminal, either. As you say in your edit, this is the share model. But I disagree that owning crypto shouldn't be the same process. I hold currencies that I believe will do well. That's the only reason I hold them. Otherwise, I hold just enough of my local currency to make the purchases I need to make. Crypto will be the same, now and forever.

You miss the point.

We don't want to exactly duplicate the dynamics of fiat. Freicoin already tried that, to a large degree, with their demurrage effort. Who uses Freicoin today? No, the point is not to preclude making "great fortunes" with Monero, it's just that the process of making such fortunes should not be as simple as buying $500 worth and hoping for the best. It should require genuine, honest effort and work...or it should at the very least require you to be a fairly intelligent criminal...just like with cash:-P

Edit: just to add that I also don't disagree with the share model (where you own shares in companies that make money) but again, you should be purchasing shares in a company because you have done due diligence. Owning some cryptocurrency should not be the same process, even though it pretty much is at the moment.

The might of the US government and "tradition"  

I don't disagree that you need incentive.

So, tell me then, what is it about the US Dollar's price and "investability" that makes people build, create, and innovate products that are denominated in USD?

That is all true but- To lure in the community of builders, creators and innovators you need incentive- and that -maybe sadly- is based very much on price and "investability" of the coin. Bitcoin would not be anywhere close to where it is if the spectulators didnt push the price up to where it made it visible on the radar.

You overstate this a bit. A bit of tail emission to incentivize mining won't prevent great fortunes to be made in XMR. Greed as a bootstrapping mechanism was part of bitcoin's genius. I hope you agree that in the end, it will be people's willingness to hold Monero rather than their willingness to use it as a payment system that will keep Monero alive. And if people don't think it will be worth more in the future (i.e. a good investment), then they won't hold XMR. If all merchants end up using the Bitpay-equivalent of Monero to immediately receive USD and consumers use it temporarily to buy what they need anonymously because no one wants to hold it, then it becomes a game of Hot Potato.

To add to what I said earlier, I'd like to point to this excellent comment from junkit33 I just discovered on Reddit -


I say: let Monero be priced on our actual usefulness and not merely on speculation.

With Monero we have opted not to repeat that process, and instead of simply running with a deflationary currency and hoping for some form of profit, we have instead aimed to aggressively move in the opposite direction and make it slightly inflationary.

Speculators have owned the market since very early days.

The easiest way to think about it is what would be the price of bitcoin if zero people were buying for investment purposes? It would probably be a lot closer to a $1 than $300. Well, that smaller amount is about the order of power that consumer sentiment has on the price of bitcoin.

Consumer sentiment won't have any impact on the price until either a) the actual consumer userbase grows significantly, or b) the price of bitcoin continues to drop significantly.

What is the new emission rate?

With T=2^64-1 unit in total and the (T-A)/N emission per block, when the total reach T in a few years, can you still use a small inflation to increase the total number of units? Or you have to change T = 2^128-1, for example?

To the excellent piece by fluffypony, may I add:

CK the Game is growing at a tremendous speed (%-wise). It is played solely with XMR and the value of the world is already 141,000 XMR. Since it was only 82,000 XMR 22 days ago, the growth rate is 2.5% daily at present. Let the wise draw their conclusions

What is the new emission rate?

We've said this before, and it bears repeating: Monero is not an "investment". In fact, we are actively working against the price "naturally" rising merely as a result of us fudging some numbers. You see, Bitcoin's price rose because of an artificial scarcity created by a fixed number of coins and a diminishing block reward. Now that's all well and good, but the sudden creation of quite a bit of wealth for some early adopters has had several interesting consequences. The most interesting of them is the Coattail Riding Effect. You see, the vast majority of altcoins that are released nowadays, and this is especially true for proof-of-stake coins, exist solely to try and ride Bitcoin's coattails, making the group of early adopters in that altcoin tremendously wealthy.

With Monero we have opted not to repeat that process, and instead of simply running with a deflationary currency and hoping for some form of profit, we have instead aimed to aggressively move in the opposite direction and make it slightly inflationary. This means that Monero is NEVER going to become incredibly valuable overnight, and it's not going to make insta-millionaires out of anyone. It means that its value is going to come entirely from utility and usefulness, and that hoarding it for 6 months or a year or maybe even 2 years is not going to make you rich.