Quote from: kora2 on November 06, 2014, 07:05:36 AM

Quote from: bee7 on November 06, 2014, 06:00:44 AM

Quote from: kora2 on November 06, 2014, 01:41:56 AM

value = price * quantity

This assumption is wrong, the correct representation is:

Quote

price = value() / quantity

where the value() is a function. The value is created only when any goods or services are produced.

I agree that,

Quote

price = value() / quantity

, is a better way to think in terms of what happens in the 'real' economy, I was thinking more from an accounting point of view almost. I probably should have used:

market cap = price * quantity

A currency has the ability to 'map' to something real, like the GDP of a country. If the currency supply is fixed, and 'real' GDP increases, prices MUST increase to compensate. Obviously price increases can be very disruptive (everyone spends effort trying to avoid getting 'caught out' by rising prices, and stop trying to do productive things).

IMO the crypto movement is dominated by trading culture that likes to see price increasing as the 'reward', but I think that hurts adoption in the future. Better for everyone if 'reward' is in more coins, not higher prices.

- Stable prices are good
- Increasing 'market cap' is good
In order to achieve both of those quantity increasing through controlled inflation is the optimum.

How money supply effects the actual creation of 'real' value is an economy/society is something crypto community will start to address more in the future. When that happens fixed supply cryptos will be seen more as commodities than currencies.

This actually raises a goos question. Is a high valued crypto is any good. From crypto owner's point of view, it is good. But from a new adopter's point of view, its expensive.

There is a reason why dollar needs to be strengthen and why yen and rmb needs to be weakenend every now and then. What sort of mechanism will be best to do this in terms of crypto? We are talking about replacing fiat, so we need to also talk about this.