This is not how I understand it is proposed to work, but if so that raises more interesting questions. Vanishes, litrally, never to return - really? Or is recycled? Both options create more problems related to supply and demand that we could go into…
The rich are not evil - hoarders are - if you want to phrase it this way - evil for the given reasons.
You conflate value inflation with inflation of token supply. You can absolutely have deflation and inflation with fixed token supply.
yeah - i’m no economist - so i am probably not the brightest mind when it comes to this topic … in my head things are very simple: with the same amount of people/ressources and the same amount of money for these to trade the value of the coin should be stable - and i don’t see why that shouldn’t be true Oo …
@krnelson then maybe we first should find out how it is thought to work before we discuss for hours/days/months ignoring that maybe some clever community member knows the solution already =)
The proposal is outlined on the Safecoin Divisibility thread. My comments are just based on what the developers and @dirvine have stated so far. I have not seen the post backing the disappearing Safecoin idea you mentioned though. Also it is worth noting that the developers/designers are not really participating in these discussions. Probably just ignoring it all due to time constraints plus they have not hit the Safecoin design stage yet. That does not mean it is not worth thrashing out the pro’s and con’s of what has been proposed so far - busy developers and an overworked David do not have time to think of all angles and repercussions to their decisions. For example if the Red Flag I detailed above is not relevant/correct then I will be very happy to have it torn apart and shot down - that is why we the community discuss these things, so the best decisions that cover all the bases come out of it.
of course might be outdated info … but that is what i’m referring to
@krnelson Keith, I was confused reading your earlier response to my simply put “if the network does the exhange”, then no problem, post.
Reading your later explanations I think we’re talking about different things in that respect. The SC to milliSC exchange would not work like a traditional exchange or bank, and I think this is why we’re seeing things differently.
The way I envisage this built in network exchange is something like this:
- everyone starts with SC, no-one has mSC
- if I want mSC, I pay 1 SC to the network, which issues me 1000 mSC and puts the received SC in escrow for use when someone wants to exchange mSC for SC. This can happen many times.
- we now have SC and mSC in circulation, and the network has exactly enough SC available to exchange for anyone wanting SC for their mSC
If I want lots of mSC and there are only SC available, no problem. I obtain the SC and convert to mSC, which increases demand for SC. Or vice versa.
Now this may not be feasible technically, I don’t know, but with this scheme, there is no difference between 1 SC and 1000 mSC. So I’m not seeing how your scarcity problem can arise in one, and not the other.
This scheme could be added in at any stage, so that’s good too, so long as it is technically feasible. Same for further denominations. None of which cause inflation.
Hence my statement that demand for one denomination creates demand for the other. You said this was not so, but if you follow the above model for network exchange, I can’t see how you reach that conclusion. So I’m assuming you were imagining some other scheme?
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Thanks @happybeing that does make more sense if technically possible. Note sure how releasing the SC in escrow might work especially when there are several divisions, mSC, nSC etc and exchanging between any of them to reach the price point you require. Would not want the situation where there are more mSC/nSC in circulation than actual SC to cover them.
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2 posts were merged into an existing topic: Safecoin divisibility
Follow link for @dyamanaka’s excellent comments on technical feasibility
You don’t have to understand why to see that(!) it happens: Gold has an extremely low inflation and still the price skyrocketed and droppen again in the last years - had anyrhing to do with scarcity in general, but with scarcity on the markets. Values don’t exist in empty space. In essence the number of tokens is irrelevant, because there will always be alternative tokens, no matter how hard you try to keep yer currency scarce in terms of tokens.
And again: demurrage is not about punishing the rich and giving the poor - it is about punishing those who try to makr profit by letting others work for them.
Bitcoin proved that people are spending plenty regardless of the so called deflationary nature. To clear misconceptions, Bitcoin is not really deflationary. New ones are created every day and pumped into the market.
Despite what some people thought, many were actually spending Bitcoins. Of course, you could argue some of the spending is more rational in a deflationary environment. Why is it bad to have more rational spending instead of stupid reckless spending and going into debt?
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What’s the difference between a hoarder and someone trying to grow his savings?
All employers are trying to make profit by letting others work for them.
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Hoarders are not evil. Ones that hoard for the sake of hoarding are just stupid BUT they take money out of the market and not causing food inflation for example or inflation in other kinds of consumer goods.
The more hoarders hoard, the longer your money will last. You will be able to buy more goods for the same amount of money.
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Employers don’t just let work. Ideally they are investors who BUY work from their employees and managers who take care that their employees can work more efficiently than they could do on their own.
I don’t see any difference. In my opinion money is not there to allow people to make a fortune by just hiding it somewhere. As I elaborated, the real value of any currency derives from mutual acceptance and that is a cultural product, based on enduring interaction. The person who tries to make money out of money takes profit from those who actively propagate it as a medium of exchange. Money in general is primarily a tool to allow for exchange. If you want to grow your ressources sustainably, you need to invest in real values not in tokens that are meant to exchange these goods.
Yes, hoarders support market value, but only artificially and short term. Long term they create centers of instability. They can manipulate the market, thus the network and every crypto-currency’s history proves that they do it.
I don’t get the reference to food inflation. Coud you elaborate?
The central banks have successfully brainwashed the public to believe inflation and low interest rates are good and deflation is bad. It’s a myth. Central banks are deathly afraid of deflation because they’ve been playing the inflation game for decades. But they are the ones that created bubble-bust mess in the first place. They are given unconstitutional power to print money (i.e. cause inflation) at will because fiat currency is no longer backed by gold. It’s why safecoin should never be inflationary.
The definition of inflation is simply increasing the money supply. That’s all. Price inflation is a result of inflating the money supply (i.e. money printing). Without the backing of gold, money printing becomes legalized counterfeiting. The central banks have distorted the economy which keeps the wealthy rich and the poor and middle-class down.
When the economy is strong and growing, it’s good to borrow so business can expand and meet the demand. So the banks lend and give credit to support expansion. To make even more money, the banks leverage up by borrowing printed money from the central banks so they can lend even more. But when the economy contracts, instead of reigning in credit and collecting outstanding debt to keep the economy healthy; the central banks entice the banks to borrow even more printed money by lowering interest rates. This stimulates the economy by promoting risk taking because there is so much cheap money. When there is too much printed and borrowed money chasing too few goods/investments, asset prices like stocks, commodities, real estate, etc. skyrocket into bubbles. These bubbles burst then the central banks print even more money to bail out the gamblers and new bubbles form.
In the meantime, savers can’t save because of zero interest rates and the only way to preserve their purchasing power is to speculate as well. For those who don’t have enough money to speculate (i.e. the poor), their purchasing power plummets – they just don’t have as much legalized counterfeit as the rich who can invest in bubbles.
This is why central banks fear deflation because they fear the game will stop. Deflation helps the poor with reduced prices and hurts the rich when the value of their invested assets drop. Excessive inflation makes the rich richer and the poor poorer.
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Does that have alot to do with the whole “80 richest people have as much $$ as the bottom half of humanity” thing?
They said if that trend continues, then by 2016 it’ll be “top 1% has as much as bottom 99%!!”
SafeCoin becoming the world’s most used currency can really help this because of deflation right?
Grew up in Africa and know of many people who need this global shift… Can’t wait…
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Definitely. One can argue some like Zuckerberg from Facebook, Uber and Snapchat guys who made their riches from social media and peer-to-peer services (i.e. the newly minted billionaires) instead of inflation but it’s the hedge funds, venture capitalists, the Goldman Sachs, and the rich in general who have mounds of legalized counterfeit to run up the valuations of these companies to ridiculous levels; ludicrous really. And Uber and Snapchat aren’t even public. Their value comes solely from private investors, not from revenue or profits. Facebook figured out how to make money well after it went public.
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Strong statement WARNING!
Inflation is meant as a hidden tax on the poor.
The rich don’t feel its pinch because they are invested in the Facebooks,Googles and Monsantos of the world, which go up every time the money is devalued and every time the money is devalued by central banks cost of consumer goods like bread goes up, lowering the living standards by destroying the purchasing power.
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The vast majority (IIRC about 96%) of new fiat money is created through the issuance of loans by banks. In other words, the inflation target (of usually 2%) guarantees continuous growth of the banking sector.
Another thing @TungSvar missed in his analysis is that deflation increases the real value of debt. This is both a problem for banks and those with huge debts (states!), because this may make those debtors insolvent. If insolvent debtors default then banks have to write-off those debts, which they naturally do not want to do. Due to the fractional reserve banking system writing off debts can cause a huge chain reaction of defaults.
Deflation is the enemy of fractional reserve banking and deficit spending addict states.
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