...by Daniel Szego
"On a long enough timeline we will all become Satoshi Nakamoto.."
Daniel Szego

Tuesday, December 5, 2017

Notes on decentralized and automatic monetary politics

Bitcoin and other cryptocurrencies function at the moment relative badly as a currency, simply because the price volatility is too high. It is certainly caused by some different phenomena that might be improved in the future, like the market is too small, most of the material things are denominated in cryptocurrencies but actually in dollar, there is a huge interest of the cryptocurrencies that causing fast price changes. The real open question is if there is possible to create a cryptocurrency that can behave stable in changing price comparing to another another currency. There are some experimental ideas in this direction, like SchellingDollar or Seignorage Shares. In all realization is however the major point is to automatically adjust the monetary basis in a decentralized way. As it is pretty easy to increase the monetary basis with mining new coins as an example via a mining process, it is much more difficult to make the monetary basis smaller.