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General Discussion / Re: Dividends 2.0 - A Simplified Implementation of Dividends and Honest Blockchains
« on: December 03, 2013, 12:25:26 am »
Inflation in Bitcoin is not perceived because the real value of the currency in relation to goods and other currencies is increasing very fast on average. From a point of view of a today user, s/he only sees that his/her coins gain in value over time, perceiving that as a fake deflation.
Infation is only a problem when you reach certain stability in real market shares, or when the decline starts. For example, what is happening to the dollar right now.
In my opinion, the ideal currency is the one which is able to expand/shrink (inflate itself by increasing/decreasing money supply) in the same ratio as market/exchange adoption does happen. So if you have 1 dollar today and are able to buy 1kg of apples, the ideal is that 20 years from now you can also buy 1kg of apples with 1 dollar.
This stability has many advantages. The first one being able to take loans and pay in a predictable way.
Do you imagine taking a loan today in bitcoins at $1000, and having to pay it when it is at $100,000? You would fail to pay, and this happens because money supply (inflation) is just not enough to support the incredible demand.
But how to implement this in a virtual currency? It is a problem if we don't want centralization, and centralization is precisely the biggest problem we want to avoid, for political reasons.
Infation is only a problem when you reach certain stability in real market shares, or when the decline starts. For example, what is happening to the dollar right now.
In my opinion, the ideal currency is the one which is able to expand/shrink (inflate itself by increasing/decreasing money supply) in the same ratio as market/exchange adoption does happen. So if you have 1 dollar today and are able to buy 1kg of apples, the ideal is that 20 years from now you can also buy 1kg of apples with 1 dollar.
This stability has many advantages. The first one being able to take loans and pay in a predictable way.
Do you imagine taking a loan today in bitcoins at $1000, and having to pay it when it is at $100,000? You would fail to pay, and this happens because money supply (inflation) is just not enough to support the incredible demand.
But how to implement this in a virtual currency? It is a problem if we don't want centralization, and centralization is precisely the biggest problem we want to avoid, for political reasons.