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December 05, 2013, 06:31:06 PM |
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I've been looking online and through this thread for a fixed-value digital currency, but cannot seem to find one.
In theory, any currency should maintain its exact value over time (a day, a month, a year, a decade) in order to serve as both a medium of exchange and a storer of value. National banks around the world promise not to print money when inflation gets out of control, but the human factors of politics and personalities get in the way. Milton Friedman suggested replacing the Federal Reserve System with a computer that automatically kept inflation between 0-2%. A digital crypto-currency should be the ideal for this, since the servers and exchanges can read various public indicators (prices of precious metals, CPI, PPI, GDP of various countries, price of oil, iron, natural gas, AMS, M2, etc) and adjust the price accordingly but adjusting the growth in the block chain.
That is to say, that a national bank should only emit currency when demand for the currency is growing--not during times of inflation. When inflation starts to set in, the block chain stops increasing until demand catches back up. When demand for the fixed rate currency starts increasing again, the block chain (or "Reward Chain") grows again. Supply is made to match demand. Discouraging speculators, the remainder of the Reward Chain (after proof of stake has been paid out), those who've held these fixed rate coins over time can claim one share per coin if they've held them for over a month, and two shares per coin if they've held them for over one year. If market capitalization grows from $1 million to $1.2 million, then $200,000 worth of block chain is generated over that time frame, and the holders of these fixed-rate coins can claim their share of Reward Coins, downloading a few extra coins to their wallet. Like interest bearing securities, that variable interest provides incentive for investors and savers to buy and hold the digital coins in their wallet over time.
Perhaps it should be done first more as an economics experiment, rather than an opportunity to make money. If successful, this would provide a real alternative to Bitcoin (and bitcoin clones), whose value is in constant flux. There is a market for both, but there's a larger market for for fixed coins for those who are more risk averse.
Ideas?
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