Quote from: maxsinner on June 10, 2014, 01:07:57 PM

Quote from: OmarGsPools on June 09, 2014, 02:54:47 AM

Get ready for walls of text and economic discussion.

Bad Deflation

This can happen when there is a sudden drop in demand for whatever reason. What happens in this situation is that prices start to drop to get people to buy more stuff, however people see this prices dropping and decide to hold out for the "bottom" before they spend money. This causes demand to fall further and prices fall further. Soon companies start to go bankrupt because they are not selling goods. Eventually as enough suppliers go out of business, supply will come down and prices will level. At this point however some serious damage is done. This scenario is exactly why you see governments do things like issue debt in recessions and why austerity is exactly the wrong policy for recovery.

Issuing debt in our case is continuing to produce coins at the same rate that led us to this state. It may not be a matter of ethics when talking about our current reward scheme or coin supply but rather an issue in our model.
While some extra generated interest would be enough to get us back to where we were price wise, continuing to pump out coins at a fixed rate would eventually require more and more buying interest to hold our current price. Our current model has us as an inflationary currency (just like the USD) with a halving in inflation at Block 840,000 and a continuation at half the inflation until we reach 672M HIRO. At that point we become a currency with fixed supply rate and HIRO become inherently scarce. The issue is if the damage has been done early on and prices drop, we'd be left with 672M HIRO worth nothing until there is becomes a use for them which someone could create and then abuse HIRO for a quick gain by purchasing large chunks of the total supply before creating the need. The coin must be distributed to as many hands as possible to prevent manipulation.

This is what we're dealing with currently and maybe a block reward that incorporates the current exchange rate and/or difficulty may be beneficial. My idea would be to slow down on the inflation rate (block reward) when difficulty is low to reduce the rate of coins being produced or "issued debt" when there is not enough demand. When times are well in our "HIRO Economy" we can have our block reward increase when difficulty is high (means our network is secure and has dedicated miners) and our exchange rate is climbing (means we have interest in owning our currency). The latter would also help prevent pumps as if someone decided to heavily pump HIRO we would have more HIRO coming into supply to accommodate for the new generated interest which also helps keeps our distribution decentralized.

These are just some things that have come to mind and I think an innovative distribution method like this could be really beneficial. Looks like I'm putting my economics degree here to use in the cryptoworld. Feel free to discuss this proposal and continue to share your ideas regarding this topic.

So you are basically suggesting the reversed model of what DarkCoin is doing and what has proven very successful? More net hashpower - higher block rewards, less hashpower -lower block rewards? Frankly speaking I cannot predict how that will turn out. My estimation is that it will result in big swings in net hashrate and not really help much with anything, although if on average there are less coins being produced overall, then it can't be worse than the current situation.

What I don't understand is why you are not willing to revise the total coin supply? If you take DRK for example it started as an 84 mil total supply coin which was adjusted significantly later on. People in crypto are accustomed to these kind of changes and pretty much consider them normal. If DRK can be successful with almost 2mil instamine, then I am sure that Hiro can be successful as well with some changes to the supply curve. Nobody will accuse you of scaming or not being fair or whatever, just make sure you give people enough time to still mine after you announce and before you make the changes and everyone will be happy and especially the people who held their Hirocoins and supported you through thick and thin.

Do not waste your energy, I proposed reduction of total coin supply 2 months ago and I was bashed by almost every single so-called Hiro developer. Well, with this price we can expect de-listing from exchanges to start very soon. Good thing I sold my coins. ALWAYS listen to your community cause if you do not, they go somewhere else.