JSECoin design, maybe a feature request.

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This topic contains 2 replies, has 1 voice, and was last updated by  glemiere 5 months, 3 weeks ago.

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  • #5143 Reply

    glemiere

    Hey!

    Let’s speak financial. Paper money has first been invented as a security measure for wealthy people not having to worry about carrying all their gold. Then the bankers realised they could give away papers to people even without having the correspondant amount of gold. That said, the actual money was born.

    This culture of debt allowed us to supply enough money for everybody (paper being an almost unlimited ressource), and allow an economic growth. The reason why I do not believe in bitcoin is because of the limited amount of coin available in the blockchain.
    If you take a 300K mortgage to buy a house, you create inflation by generating money who doesn’t exist. This inflation is making everybody’s mortgage easier to pay and the next people who will contract debts will make your mortgage easier to pay as well. No debt no inflation, no inflation no economical growth.

    The value of bitcoin is based only on the demand and the amount of coins available. The more coins are mined the more the value increase because it’s becoming rarest by design, which is also the reason why everybody will want to sale when the last bitcoin is mined which will massively burn people’s cash. That said bitcoin = no debt, so no inflation, so no economical growth.

    How are we creating JSECoin debt, inflation, growth ? Can we ask for 500JSE and mine them later ? Can we make it easier to mine with time ?
    Can we create the conditions to make it an economically viable currency ?

    What’s the plan here ?

    #5150 Reply

    James

    I think there is a definite argument for the benefits of an inflationary monetary policy. It’s worked for years and brought a level of prosperity to developed nations. The counter-argument is that bitcoin’s success lies mainly in its scarcity. A deflationary currency allows for real-price growth over time rather than a loss in purchasing power over time. Everyone has probably seen this meme a hundred times before but it illustrates the point quite well:

    bitcoin purchasing power

    So while thinking on a higher level a inflationary currency may be beneficial, crypto-investors are used to deflationary currencies and shout scam at anything else. There is a benefit and potentially higher reward to investors with a fixed cap currency. We will thrive/survive on investor sentiment so I think anything else other than a fixed cap cryptocurrency would be a very hard sell and negatively affect ICO investments and price on exchange etc.

    One other thing of note is that the futures contracts recently introduced in the US have allowed for the purchase/sale of bitcoin without holding the underlying asset. This is an interesting development as it doesn’t affect the amount of Bitcoins available but does affect the liquidity of the markets.

    How countries will deal with debt, inflation and growth in a cryptocurrency era is a big question and one I don’t have the answers to. I wonder if the governments have even given considerations to the implications of mainstream cryptocurrency adoption. Certainly the designers bare a social responsibility here and it’s something we should be discussing more as community.

    #5153 Reply

    glemiere

    I agree!
    Thank you for this fast answer, the crypto-world is quite new. Wait and see then 😉

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