Post
Topic
Board Altcoin Discussion
Re: A question about crypto-currencies from a 12 year old
by
MasterOfDisguise
on 02/08/2014, 23:32:11 UTC
I've heard of a crypto-currency which provides a basic income for everyone but why does it have to be basic? Why can't it provide a good income for everyone? Also, will prices rise if everyone was earning a good amount of money? I am only 12 and have no knowledge of the economy but I am interested in learning about crypto-currencies.

Hi, the problem with that idea is that, although it sounds nice, money isn't actually wealth... it only represents wealth. If a currency was made to give enough money to everyone for a good lifestyle, it would be devalued over time. That's actually why prices in dollars go up over time: As the government gradually prints more money, each dollar becomes worth less. If they were to just print dollars for everyone *all* dollars would lose value and eventually become worthless. This happened to Germany during World War I. This picture picture shows kids playing with German money after the government printed so much that it because worthless. Although it would be nice to provide an income for all, to do so you either have to tax or print money (this goes for cryptocurrencies as well as fiat), both strategies do some serious harm to the economy.

I am *not* saying that we shouldn't take care of the poor. I believe we should, but we have to be very careful to avoid unintended consequences.

How would you go about achieving this then?