Post
Topic
Board Altcoin Discussion
Re: Monero Economy
by
Johnny Mnemonic
on 14/05/2014, 19:57:44 UTC
I should clarify... what I meant to say is:

High volume trade is certainly possible with a long-term value storage vehicle, but very unlikely because the properties of such an entity actively discourage it. This is why bitcoin has such a small circulating supply relative to the total available coins... nobody wants to spend their bitcoins when they can just accumulate them and watch the price go up. This is why I don't think bitcoin will ever be a "spending currency" so to speak.

A great currency for trade is one that is both easy to get and easy to spend, and this quality is acheived by deteriorating its long-term value integrity. Bitcoins are neither easy to get nor easy to spend, as the PoW increasingly favors the privileged, and the coin's deflationary qualities force you to fight logic to spend it.

Gold certificates are actually a great example of deteriorating value to achieve volume. Goldsmiths learned very early that they could print many more certificates than they actually had gold to back up, because such few people ever bothered to redeem them. This kind of debasement was an early form of fractional reserve banking, and one of the first steps toward ultra-high volume trade.

Regarding anonymous value storage, I'm saying it's useless because all you really need is anonymous currency. You can use that currency to purchase bitcoins or anything you want with anonymity. "Unnecessary" is probably a much better choice of word.