Post
Topic
Board Bitcoin Discussion
Re: Bitcoin-like implementation of Ripple
by
dannyjpw
on 24/02/2011, 21:28:04 UTC

If the average dollar moves every 8 months, in 12 months the avarage velocity of the dollar is 1.5

So what? You mean to imply a metaphor between money and water when the comparison is specious. If you have a mostly immobile  sand dune and every so often a grain is picked up by wind and moves to a nearby dune that is a more appropriate metaphor for money.

Another metaphor is is two roads. The high road moves very fast, with a small number of cars, and many collisions. This is the hot money flow.

The low road moves very slowly, and is always gridlocked. This is the saving of ordinary people.

There is an on-ramp and off ramp to the high road. This is an appropriate model. And yields a totally different way of thinking, and highlights totally different problems and solutions, than the image of water moving in pipes.

Quote
With demurrage, that number would be considerably greater. Anyway, even if you don't believe in the effects of velocity and you think it all depends on the supply, demurrage can destroy money like your fee does.

A high (or low) 'velocity' is neither here nor there. A single coin with ultra high velocity is as good, you say, as many coins with low velocity. In fact they are equivalent according to the MV=PQ.

The force you term Velocity arises from the technology associated with money, cultural norms, and imbalances like interest rate differentials. It is therefore not something that can be forced, but an emergent property of all these things.