If you have not read the basic concept the ‘RAR Tokens theory of stability for crypto-currency (The basic)’, please follow the link
http://rartokens.com/blog/f/rar-tokens-theory-of-stability-for-crypto-currency We are not talking about Sophia like here, but of a feedback mechanism by coins to traders and alike. The concept of token/coin expresses its current price level as an anomaly and not conforming to the value ratio is a form of a feedback that would be helpful for a trader to substantiate his/her decision get involved in the token/coin or not.
This feedback is based on value ratio. Any price increase that does not conform to value ratio can be flag as an irregularity. The more tokes/coins involved would be helpful in confirming the validity of the price increase. For example, on a three-coin-system implementation of this theory, if a coinA is equivalent to two coinB, and coinB is equivalent to two coinC, then coinA is equivalent to four coinC. The ratios would be:
(1 coinA) = (2 coinB) = (4 coinC)
At this level, the value ratios are established and all coins are in the equilibrium state. If coinC is priced at 1 USD, then it would lead the price of coinB to be 2 USD each and coinA would be priced at 4 USD each.
(1 coinA x 4 USD) = (2 coinB x 2 USD) = (4 coinC x 1 USD)
4 USD = 4 USD = 4 USD
The three coins are in balance with 4 USD value price each even though they have three different price levels.
If coinA suddenly increased its price to 8 USD and while the value of (2 coinB) and (4 coinC) are still on 4 USD, it clearly says the 8 USD price increased is not supported by the two other coins. It will create pressure for coinA to lower the price back to 4 USD to maintain the correct value ratios in all the coins. This
feedback in price irregularity and expectation are essential to transform chaotic traders to become informed traders.
This intelligent feedback by the coins to the traders strengthen the RAR Tokens theory of stability for crypto-currency.
Prev Article: 'In Ratio we trust – the basis of stability for crypto-currency', please follow the link
http://rartokens.com/blog/f/in-ratio-we-trust-the-basis-of-stability-for-crypto-currency/by:
http://rartokens.com/
