Post
Topic
Board Altcoin Discussion
Re: Multicoin, Namecoin, Goldcoin, Silvercoin, OilCoin, 1971coin, backed by bitcoin!
by
dacoinminster
on 25/07/2011, 21:55:11 UTC
Stable prices are an unachievable mythical goal in the real world.

It stems from deficient mathematical understanding, economists need to do some research into stationary fixed points of dynamical systems, strange attractors and the like. A non-linear dynamic, multi-variable system like a money market is never going to produce stable prices. A vibrant system needs a kernel on instability to retain flexibility and robustness, as a resistance to stagnation, corruption and large external disturbances (shocks).

With a more modern mathematical basis "stable prices" would be recognised as unattainable and anyway not desirable, imho.

I agree that a perfectly stabilized currency is not possible. What is possible (in my opinion) is to let people choose who experiences the instability. The instability is there (risk), but with risk comes reward. I wish to give bitcoin users (at least) two additional choices beyond holding bitcoins: a low-risk low-reward extrapolation, and a high-risk high-reward extrapolation which takes on both the risk and reward from the people who chose low-risk low-reward.