One question.
Lets imagine there is a coin where each year each wallet lose 1% of all coins. There are 100 coins and each coin value is 99 dollars, so the market cap is 9900 dollars.
At the end of the year everyone will lose 1%, the means the amount of coins will go to 100 to 99, and the market cap will continue the same 9900, this means the value of each coin is now 100 dollars.
If you had 10 coins worth 99 dollars, you had 990 dollars worth of coins, at the end of year if you didnt spend the money you will have 9.9 coins * 100 dollars = 990 dollars too.
As you see at the example the guy didnt lost any wealth by not speinding his coins, so the question is: how someone lose wealth from demurrage?
The only ones that would lose wealth are the ones that lose coins by rounding down during the demurrage process.
The money supply does not go down in Freicoin. What is taken as the demurrage fee is currently all paid to the miners.
Thanks for explanation skaro.
Yes I understand that but what the previous poster was referring to is the fact his net worth id depreciated through the demurrage process and this is the point which stands.If you buy and hold freicoin you lose through a form of taxation on your balance.Its no better than inflation and deincentivises any speculation in freicoin hence the price will never go anywhere.Traders will always steer clear of this one.
If you think inflation and demurrage sucks, then you will hate demurrage even more.
With monetary inflation (printing more money), because of the way economy works the paper money or digital will be worth less and people will ask for more money when trying to exchange something for this money.
At the end of all this you will have the same amount of money but the things will cost more money than before because of inflation, so you actually lost money.
With demurrage is even worse.
People will lose actual paper notes or digital coins because of demurrage. But not only that, because of the fact that companies are also losing papernotes and digital coins, they will need to increase the price of their products because demurrage will be basically a new tax that the companies have to pay.
So not only you will have less money but the products will cost more than before.
But at least with demurrage, most of the value lost by people (the one lost by losing coins) is seen by them, people (state economists) talk about making people losing value (inflation or demurrage) is good because it make them spend, with inflation many guys dont even know of such inflation and think its natural thing (I assumed as a kid and teenager price increase was a natural thing). So inflation will not make them spend (assuming this is what is wanted and not just some excuse to have state style inflation), because they dont even know they need to because inflation WILL, WITH 100% CERTAINTY, HAPPEN.
Freicoin is even worse because it has both inflation (until all coins are distributed by mining) and demurrage.
Obviously, you are not forced to use freicoin (I hate demurrage and inflation) and so I wont use it. But I find the coin interesting that a least is not just another coin with ALL those 3 features 1-Pow Mining. 2-Coin is not premined (XRP style primine dont count as premine), and the market cap will only be reached at far future. 3-Coin dont have an extreme amount of unique coins (marketcap /minimum amount of coins you can have)
Can the devs explain exactly how many coins are currently in circulation, what’s the max supply and what happens to all the coins that were lost due to demurrage?
Thanks.
As skaro explained, arent lost due to demurrage, they go back to be mined like the mining fees.
Also this avoid the problem of lost wallet because they will eventually lose all their money to demurrage, sending the coins back to be mined. But the problem wont be solved if a wallet with the minimum amount of freicoin you can have keeps rounding demurage tax down to 0 coins. If that happens you will eventually have tons of lost wallets with the minimum amount of freicoin possible that wont lose this coin due to demurage.
