Quote from: Dorky on April 21, 2017, 05:29:24 AM

You have totally lost sight of the original purpose of money.
Money does not derive its value from its cost of production, or else it is not money but commodity.

That is not what I'm saying. Of course money doesn't DERIVE its value from its cost of production. It derives its value from the monetary belief system that it carries, the recursive belief that you can accept money against value, because others believe that they can accept money against value, because they believe that others believe that....

But if you want to avoid SEIGNIORAGE, there are only two solutions: use money that "always existed" (like gold) ; or make new money, and do that in such a way that the maker of it, needs to destroy/deliver the amount of value that it represents.

There are two ways of doing that:
1) the fiat system way: create money against a backing (like a mortgage).
2) destroying as much value of the money you create (PoW).

If you don't do that, you get seigniorage (direct seigniorage, or delayed seigniorage, that is to say, you can fabricate money and obtain directly more value than you needed to spend/back for it (counterfeiting for instance) ; or you can fabricate money now, and obtain more value than you needed to spend/back for it LATER --> bitcoin).

The reason why, in my earlier example, the coin wouldn't gain any value beyond the PoW needed to make it, is that obviously, nobody would provide more value to obtain it though exchange, than the value needed to sacrifice to make new coins. What I forgot to specify, however, and which may have (correctly) triggered your remark, is that most probably, that coin would simply be worthless.

But that is because there's no real demand for "internet money" apart from some niche applications like dark markets, and that crypto is mainly a greater-fool token, not a monetary token (it is, but to much lesser extend). As such a coin would of course not promise to get rich, nobody would "invest" in it.

If there were a demand for "internet money" then such a system would be near ideal money (in the Nash sense).