@NiallW
Why not simply generate accounts so that whenever a transaction is made TO account, the overall supply increases by that many coins, and when coins are pulled FROM the account, the overall supply decreases by such an amount + the decay rate per account ?
I know that it is easier to say than to be done, but just hypothetically speaking.
The overall supply can be calculated by going trough a block-chain. The thing I am not certain about is how to make the supply be infinite and not finite like BTC (and at which point would the supply grow without a decay or burning?) - I have no idea.
not really sure I fully understand the example you've given there.
If you use economic theory, price is worked out using supply and demand so in theory, you can fix the market value of something by constantly adjusting the supply to always meet demand. You might be able to use formulae used for estimating velocity of money to create an algorithm for estimating exactly what the change in supply needs to be. Manipulating supply won't be perfect as you'd have to wait maybe a few weeks between the supply being adjusted and market forces reacting to it but it could give long term price stability.
You could also have the currency look up the sales value on exchanges and adjust the supply to push it's value towards the optimum but this relies on exchanges which means it can be indirectly manipulated by someone messing up the price on the exchange.
I think you'd have to have potentially infinite inflation when prices are too high and some mechanism that encourages saving when prices are too low, or a system that creates new coins when prices are too high and incentivizes users to destroy coins when prices are low, maybe something like have two currencies (coins and shares) where users can trade coins for shares but can't turn shares back into coins (so coins get taken out of circulation whenever shares are purchased = deflation) and then have a proof-of-stake system where users with the most shares can "win" and get paid in coins.
Thank you, I admit that I have no background in economics, that my claims might not be entirely correct, but I do understand that the human factor cannot be fully avoided and price adjustments may be slow. I also know that some things currently do not quite work the way I mention them, but it doesn't mean that it is impossible to accomplish.
I have given it some thought this morning, and the only way I can think of making the pumps and dumps not work with a coin is to do the following:
-There is no decay (that is, the supply does not become lower over the time), forget that I even mentioned it.
-When person buys 10 coins (lets say), they also increase the supply by 10.
-When person sells 10 coins (on some exchange to BTC lest say), they decrease the supply by 10.
-For each transfer of n coins from account A to account B, account A gets k coins removed and B gets k coins added, given that k is the amount added to a total supply (when A bought their coins). When A has zero coins, the k value is therefore a zero too.
-Miners can burn only a certain amount of accounts' coins (per day, overall) that they encounter, and accounts are chosen randomly. Burning the accounts' coins means that should a miner encounter some account B, the previously mentioned k amount becomes a zero, and supply gets the amount k subtracted (completely from an account). Therefore, when A transfers 10 coins to B, they transfer the k value as a zero. This also means that k is either a zero or the amount that is transfered or the minimum amount that A has.
-Since the mentioned burning is limited per time period, there will be a queue of accounts whose additional supply coins can be burned. Since there is a queue, we can easily analyze the block-chain to know the final supply after the whole queue is processed as well as the investments (we can also keep a history of this) and represent it as a valid market prediction. This way, media and politics cannot influence people's decisions, when they would know exactly what to expect.
I don't see a reason to introduce two or more currencies that work as one, we can just adjust the accounts and how they behave.
This way, the pumps as well as other investments can occur, however, since nobody will know when the pumps will occur, it will not be worth the risk, and therefore people will avoid such a behavior.
Anyway, I think that this could work algorithm-wise, but like you said, there is really no way to have a 100% accuracy in the real-world. Still, I think it is worth a try.
