I was only making a general comparison, of course, money is more complex than that. I understand that purchasing power and number of units are not always inextricably related. I was just illustrating the concept of inflation. Bitcoin has had inflation, of course, but it also has a ton of use, acceptance, speculation, adoption and difficulty in acquiring, which all make it more valuable than say Ron Paul coin.
You compared Ripple to Liquid to make a point that the amount of 'coins' in existence matters...
Yes, more time is necessary for distribution. As cryptocurrencies become more popular, alternative currencies will too. In a world of 7 billion people, the more time for these currencies to be mined/staked, the better. If all the currency is already mined, that means when crypto does become popular, the only way to acquire it is from current holders. I don't believe that is entirely fair for when the mainstream arrives.
I'm happy we agree on this issue! When it comes to distribution, I think slow and steady wins the race. Mainly, I believe these schemes where 90% of the total coins are distributed in the first year or two are absurd. I recognize though that this position is still theory. It will continue to be theory because there are a lot of other variables. In time, it might be determined that your distribution model isn't spread out enough. Will the coin be looking at another fork then?
Your right, the mission of scrypt-chacha, as well as the mission of crypto, is different for every individual. For me, the idea of fair distribution has always seemed incredibly important. More so for alternative currencies than for big coins like Bitcoin, however, it will be interesting to see what happens when 98% of Bitcoin is mined in just a few short years. Who would want to get into a coin where 90% of the currency has already been mined by a group of several thousand? There are already 3.5 million Bitcoin wallets in existence, of that, perhaps 1 or 2 million actual Bitcoin users? Surely this will grow exponentially, but it still took several years to take off. Alternative currencies need more time as well.
Yes! And unlike gold or silver, anyone can just take the code and replicate it to create a different coin with the same functions. I would rather do that than buy from a coin that, for example, is 90% owned by 10 people. Bitcoin does benefit from having such deep market penetration. I think good behavior from stakeholders is encouraged as cryptocoins should always be in competition. It's good to see that you think in terms of competing with Bitcoin. It is lofty, but one should NOT claim success at being the #10 or so cryptocoin!
I don't believe anyone is qualified to make macroeconomic decisions, and I would hate to think of myself as a central planner, however, all cryptocurrencies have a foundation that resembles a monetary policy. Bitcoin has a block reward schedule and a supply ceiling, all crypto has a certain structural framework to the way coins are distributed, and I believe it's mostly arbitrary. When I was in the meeting with DCgirl and Bumface discussing the percentage rate for proof of stake, they wanted 20%, I recommended 5.6% and we went with it. The reasoning behind it was to slow distribution and be fair to miners and small investors.
Your numbers are still arbitrary. Having a theory behind it doesn't negate that fact. Of course, there is an arbitrary element in choosing the distribution rate. That is why it shouldn't be changed... otherwise, what is to stop people from changing it continuously until getting the arbitrary 'right' results.
The dollar goes into periods of inflation and deflation, but historically the dollar has been an inflationary currency.
Right, but answer in terms of the context... stop confusing short-term 'inflation' with long-term. I think you are starting to understand better. Do you understand the equation of exchange or no? If I have a printing press in my room and print $1M dollars and just stick it in my mattress for eternity, the effects will not be felt by the economy at all. Also, the long-term inflation of Bitcoin and UTC is 0%, right?
You are right about that, as a coin is being adopted, business starts being conducted, people are buying more coins off the market to replenish their coffers and speculation further drives up prices (as well as other factors).
^^^This... what is this? You are assuming that if I spend UTC, I will trade more dollars in to 'replenish my coffers'? Speculation further drives up prices? Speculation can also drive prices down...
If Bitcoin suddenly was adopted by Wal-Mart today, I guarantee you the price will go up as soon as the news hits the headlines and more people are using Bitcoin to buy products at Wal-Mart.
No, you can't guarantee that. Did Bitcoin go up when Dell accepted it? How about when Microsoft did through the XBox?
(If the whole vertical supply chain began accepting Bitcoin, from the gathering of resources all the way to retail, that would be true acceptance, at that point I believe crypto has finally gone mainstream).
Yes!
I completely agree that velocity is crucially important in creating an accepted currency. The demand for Ultracoin would rise, meaning more people will be using Ultracoin economically which leads to more people accepting it, buying it off the open market, etc.
You need to reattack your way of thinking here...
http://cointelegraph.com/news/113987/bitpay-reveals-the-good-reason-why-bitcoin-price-is-downIf I spend Bitcoins to buy a computer from newegg, those Bitcoins are immediately SOLD! That means the price will decrease in relation to USD. It is the same when using CoinPayments. Your assumption that I will buy Bitcoin to 'replenish the coffers' is strange to say the least. I would have to buy the exact same amount right away just to meet my own supply and demand... why would I do that? If I think the price of Bitcoin is going to go up, I wouldn't buy anything with my Bitcoins, would I? I would only buy something when I think the price of Bitcoin will go down, and 'replenish my coffers' when the price drops to what I believe is a low point.
I would hate to say I am playing central planner. I don't believe anyone should be manipulating the currency and in fact I detest all central planning, but the truth is that these variables for block reward and interest percentage do matter.
If the proposed updates were put into place, I would never want make any further changes ever again, despite the outcome.
My man... that is what the people want to hear! Believing you is another thing...
Unfortunately, unlike gold & silver which are created in finite amounts by the Earth, cryptocurrencies must be programmed.
Gold and silver are created by the Earth? No, the Earth does not create gold and silver... :/
The vast majority of crypocurrency creators have technical backgrounds, nothing in economics. I propose changing some of the variables of this monetary policy for maximum benefit of the community and for the long term future of the coin. This would amount to a longer period of distribution so the maximum amount of people can fairly acquire Ultracoin, the secondary effect of this is a less intense inflationary period. The coin will be forked for the N-Factor 15 update regardless, thus this seemed like a good opportunity to make these changes. I just wish this was the foundation we had on day 1, but it was not. Changing the rules now might not seem like a good idea, but the truth is we are still very early in the game, and changing the rules later will be impossible. If we must have a monetary structure, let it be the best structure possible. I am open to hearing all of your thoughts on this discussion.
Some feedback for you: I personally question your background and your credentials. Most importantly however, I am scared as hell at your willingness to change the rules in the middle of the game, and I'm not sure how you have that authority. I think you are young with a lot to learn, but you crave exercising control--brutally honest.
With that said, for what it is worth, I am personally looking forward to the changes your propose for UTC. NFactor15 bodes well for my blockchain transaction processing hardware, which may otherwise become obsolete with higher NFactors. A part of me likes the idea of having friendly competition between YACoin and UltraCoin, but there are benefits of having a less crowded playing field for YACoin as well.
If you convince people that you won't propose any more mid-game changes, and if you become more active, I think UTC can perform well in the future!
