Post
Topic
Board Altcoin Discussion
Re: StableCoin
by
don giovanni
on 20/04/2013, 23:08:25 UTC
Ultimately the issue you will run into with free handouts or enforced penalties is that neither provides an incentive to do anything in particular, that is people will continue to do whatever it is they want. Its specious to say that because we have X system that this will produce Y behavior in its users.

There are some known variables of behavior that we can rely on:

It costs $ to make Coin
Miners have to remain liquid despite desire to hold
Miners wont dump coin for less than it cost them unless the whole market is on a downward spiral
Users dont care about price of coin, they just want to use it.
Speculators will do anything to destabilize the market to profit from the difference. 

Now if you give spenders free money to spend, then its going to enter the economy unvalidated, that means not only will you lower the price of coin (if that is your goal), but you will also lower the confidence in the value of the coin, this could have severe repercussions in the long run.

The issue here is the effect speculators have on the market, and without a central bank there is only one way to handle them, by increasing the monetary supply in concert with demand, in a controlled validated manner, that is by bitcoins very design solely through its miners.