Quote from: Impaler on May 23, 2013, 09:09:13 AM

Your describing how deflation reduces the incentive to invest. The systemic effect of reduced investment is that #5 growing future goods in fact do not grow. But this leads to a catch-22, once their is no growth the conditions fro growth exist again, and once their is growth it's very existence is self defeating. The result is a fluctuation stop-start serious of growth spurts and growth stoppages or outright contractions which we call the 'business cycle'.

Freicoin developers are well aware of this shortcoming in BTC and have implemented a solution thought up over a hundred years ago by German/Argentine monetary theorist Silvio Gesell. Coins simply lose face value at a modest rate of 5% a year. This changes the math of #1 to I - Demurrage < R which cascades to allow a real growth rate equal to demurrage rates.

I recently came across Freicoin and demurrage. Extremely interesting concepts. Couple of question though;

1. Why would any reasonable merchant/seller/firm accept currency for their goods and services if it is common knowledge? Wouldn't they rather have currency that stays the same in face value or even goes up in face value?

2. Is the supply of Freicoin limited as well? Can't seem to find this on the wiki/site.