Quote from: Keyboard-Mash on May 13, 2014, 07:34:16 AM

I think the proposal is a good sign that he's recognized the need as valid.

What I also think is that both of your solutions don't really target the "non-arbitrary" direction that is persistent in CryptoNote.

Especially for something like an annual debasement -- is there any way to work the 2.8% proposed by a minimum of 1, or yours at 2% into something that is more adaptive?

What drives the need for inflation? Are these variables trackable in the protocol? Can they be applied in a fashion that would allow a variable rate of inflation based on some specific need for it -- more like a window from 1% to 3%. Would that be more ideal?

Clearly we can't have the value of these coins approaching infinity, so I can agree that there needs to be a debasement. But, to what extent does it need to be debased?

The idea of "smart" debasement is something that I've been thinking a lot about. Perhaps the block reward could increase or decrease depending on the transaction volume, with less movement requiring more debasement. However, could such a system be manipulated by miners to receive a larger block reward? Additionally, even if we perfected such an adaptive system, I'd guess it would be a tougher pill for the community to swallow than to simply say "3% fixed forever no matter what." If you're suggesting we somehow calculate the debasement on-the-fly to keep trade value steady, that would be an extremely tall order, and not necessary anyway. There are plenty of other vehicles where people can store value, a currency for spending shouldn't be one of them.

I'm not sure what the minimum effective dose would be, but debasement is also important for keeping the wealth distributed and the network decentralized. This is why I think closer to 5% (or maybe higher) might be appropriate. As long as the block reward is high enough for the miners to not rely on fees, then we can cap the tx fee to a small percentage of the block reward, and the payers won't have to enter a bidding war to get their transactions included.