Post
Topic
Board Announcements (Altcoins)
Re: ★★DigiByte|极特币★★[DGB]✔$250k Investment, DigiByte Gaming, #DigiByteTip, DigiSpeed
by
EPLDCC
on 25/02/2016, 00:56:57 UTC

I think that we don't have a problem with the current reward schedule.  So I suppose I think we shouldn't rush to change it.  But, here are just a few comments about the block reward discussion.  I could write long posts for each of the points below.  But, instead, I just put these here as 5 related comments.

1. I understand the logic when people suggest that reducing the block rewards would increase value for existing coins.  It's a supply and demand thing.  If you reduce supply, there will be greater pressure on the demand curve, which will move the exchange equilibrium up (at least theoretically).  But, I believe that would be a short term increase and would eventually decrease the total value of DGB.

2. I know for sure that not all mining rewards are ending up on the open market.  Mine don't.  I'm equally sure that a good amount of them do end up on the open market.  Just for the sake of argument, let's assume all the mining rewards ended up on Poloniex every day (which they don't), it would still be less than 15% of our average daily volume just on that exchange.  So, any increase in exchange price probably wouldn't be too dramatic.  I personally wouldn't be worried about the mining rewards until that percentage gets much higher (something like sustained averages above 35% of the sum daily volume from all exchanges).

3. DGB is not an inflationary coin.  Technically, like BTC and other POW coins, it's deflationary.  There is a 1% decrease in mining rewards each month.  When people write that it's inflationary, what they seem to mean is that we have more new coins produced from mining than other digital currencies that they are exchanging, and they want to leverage the existing DGB they have saved for a greater short-term exchange value.  To me that seems self-serving and short-sighted.  Instead of working to leverage the short term value of our existing positions, I would suggest that we encourage new markets to increase consumption and liquidity.  Go back to number 1.  Basically, I think instead of trying to reduce supply, we should all be working to increase demand and use value.  Increasing demand would have a sustained impact on the exchange value.

4. If we want to see the exchange value increase year-over-year, we want to encourage exchange and liquidity in the markets.  The current markets (with exchanges) are largely closed loop systems.  But, I believe that will begin to change in the coming 24 months.

5. There is an advantage to continuing our current level of mining rewards because it creates continued upward pressure on total-exchange-value (what most people call market cap) for DGB.  As we approach investors and companies for partnerships, sponsorship for gaming, etc., it looks good that we have demonstrable yearly growth in total exchange value and total exchange volume.

I'm sure there are some possible avenues and vehicles that we could use to address the concerns about supply that have been posted recently (and in the past).