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August 07, 2016, 02:44:08 PM |
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TLDR Recently used cryptocurrencies capitalization is less than 0,001% of the global market worths, because the global market prefers Representative Money against Commodity Money. I scetch a possibility how a criptorurrency could be a kind of Representative Money.
Problem Most people who uses Representative Money / RM (such as USD or EUR) are not educated with advantages of cryptocurencies, but most of cryptocurrency-fans are also not educated what the disadvantages of cryptocurrencies compared to RM. RM provides much higher liquidity than Commodity Money / CM. Reaching higher liqudity requires that demand being parameter of supply. The demand of RM is parameter of its supply by credit-system, but all of these lacking in CM-s. If there is a suitable Monetary Policy / MP then there is nothing wrong with that demand is a parameter of supply - while due to the lack of suitable MP sometimes RM could create economic crises (such as economic crisis of 2007–09). Although CM-s do not cause economic crises, since their demand may not affect on supply (by credit-system) they cannot be competitive of RM-s. BTC and all of its altcoins are CM-s too, because their supply is determined by mining. Therefore recently used cryptocurrencies are not competitive with RM-s.
Solution Notwithstanding the decentralized technical conditions, RM and MP can be implemented in a cryptocurrency. That's my know-how! But at first case I need to determine how a suitable MP works in a Mathlab simulation. I know the functions, but I do not know the system of equations. If anybody can help just let me know.
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