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May 19, 2013, 08:07:53 AM |
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I know nothing about making a crypto-currency, but all appear to be deflationary which encourages hoarding, not spending, as the value goes up over time. If this was such a good thing then most governments would have stopped creating extra money long ago. A coin needs to decrease in value (slowly and consistently) to encourage trading and keep the coins in circulation.
So, can someone (or better yet a group of coders + economists) get together and create a coin that addresses the shortcomings of previous 'get rich' coins. As I see it the main 2 issues are the coin's value (over time) and transaction/confirmation time.
I don't know enough about this to suggest how it gets done, but I assume that an increased block reward over time would do it. The devil is in the detail though, as the reward needs to scale with adoption. If it goes up too fast the coins will become worthless and if it goes up to slow the currency will be deflationary. I assume that inflation of ~2% pa, in line with most government targets would be acceptable, but I'm not an economist. Perhaps the block reward can scale with difficulty?
This also opens up another can of worms, since the increasing block reward will mean that there is no upper limit on the number of coins available - is this even possible?
Much discussion ensues...
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