THE ECONOMY

Clinamenic

Clinamenic

Binary & Tweed
For example I don't think ETH has a max supply like BTC does, but ETH implements token "burning" in ways that may have a similar effect. Don't understand it well enough though, plus the codes are constantly being upgraded, differentiating even further.
 
Clinamenic

Clinamenic

Binary & Tweed
Here is the issuance for CityCoins, which so far includes MiamiCoin and as of last week NYCCoin

Screen Shot 2021-11-14 at 4.41.30 AM.png
But this isn't its own blockchain. Rather it is built upon the Stacks blockchain, which has its own novel structure I am still getting acquainted with.

But in the case of CityCoins, the issuance tapers off without reaching a max supply, unlike BTC.
 
Clinamenic

Clinamenic

Binary & Tweed
Once the macroeconomic academic status quo becomes post-blockchain, we could have some seriously interesting economies.
 
IdleRich

IdleRich

IdleRich
Clinamenic said:
I could just have an incorrect understanding of inflation, but I think the price of bitcoin going up would be deflation, i.e. value of a unit of currency increasing, no?[/BITCOIN]
Yes if bitcoin increases in value then that is the opposite of inflation. Well sort of... inflation is the decrease in value of a currency but I don't think you say "bitcoin went down by 1 percent today so it is inflating" - I think that if you say that a currency is inflating or deflating you are saying more than just that the latest movement was down/up, I think it implies a general trend in that direction and probably requires some other indicators too.

Unless there is a distinction between a currency and a speculative asset/security in this regard, with inflation/deflation pertaining to the former and depreciation/appreciation pertaining to the later.
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I don't know anything about this at all. My guess is that there is no real difference between a currency and an asset here except how you're thinking about it at the time.

And yeah, the max supply of BTC is ~21,000,000 because the rate at which new BTC is minted tapers off until then. But that doesn't mean there is 0% chance that the supply cap changes. If the majority of nodes in the bitcoin network, i.e. computers running bitcoin's code, switch to a different code with a different supply cap, then the economics of Bitcoin changes accordingly.
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But suppose the cap stayed the same but some other thing happened which somehow tended to decrease the value of Bitcoin over time. I don't what such a thing could be, but it's not inconceivable and, if it did happen, then bitcoin would inflate right?
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IdleRich

IdleRich

IdleRich
Clinamenic said:
The differences are radical. Completely, structurally different economics in some cases.
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So why did you say "Yeah I'm not sure where to stand about whether crypto in general should be considered a hedge against inflation"?
If they are so radically different then how can you generalise like this?
 
Clinamenic

Clinamenic

Binary & Tweed
IdleRich said:
So why did you say "Yeah I'm not sure where to stand about whether crypto in general should be considered a hedge against inflation"?
If they are so radically different then how can you generalise like this?
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I'm not sure any of the distinct crypto models can be said to be a hedge against inflation, largely because I;m not sure what a hedge against inflation consists of. People say gold is a hedge against inflation, which is reasonable, as it is less subject to inflation than the dollar, i.e. new gold being mined. In that case, I might say BTC is a better hedge than gold, insofar as the code stays the same.
 
Clinamenic

Clinamenic

Binary & Tweed
I'm just not sure how USD inflation would effect the valuation of BTC, or any crypto asset for that matter, or if there will be enough of a BTC-commerce-friendly system in place, should USD become inviable as a store of value.
 
Clinamenic

Clinamenic

Binary & Tweed
If any of the crypto assets I'm aware of could be considered a hedge against inflation, it would probably be BTC.
 
Clinamenic

Clinamenic

Binary & Tweed
Especially since newer/future generations will naturally have more trust in the internet than the current financial incumbents do, i.e. more confidence in a digital-native asset like BTC.
 
IdleRich

IdleRich

IdleRich
Clinamenic said:
I'm not sure any of the distinct crypto models can be said to be a hedge against inflation, largely because I;m not sure what a hedge against inflation consists of. People say gold is a hedge against inflation, which is reasonable, as it is less subject to inflation than the dollar, i.e. new gold being mined. In that case, I might say BTC is a better hedge than gold, insofar as the code stays the same.
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Ah ok, I misunderstood. My basic point is that Bitcoin is designed to have a built-in scarcity and thus be anti-inflationary, so if it's all working as it should then bitcoin is a very good but, I reckon, not perfect, hedge against inflation. Other crypto currencies would need to be considered individually on their merits to know if they were hedges against inflation.
 
Clinamenic

Clinamenic

Binary & Tweed
Yeah if/when BTC stabilizes, it may ultimately beat out gold as a hedge against inflation.

But every ”halving” (every time the minting rate of BTC is cut in half, every 210,000 blocks) would seem to boost the value of BTC in people’s minds, even though such events are obvious in foresight. Anyway the volatility of events like this may detract from BTCs position as prime hedge against inflation.
 
Clinamenic

Clinamenic

Binary & Tweed
And to my knowledge there aren’t any stablecoins built upon Bitcoin, or any that are strictly collateralized by Bitcoin in some respect. Something like that may allow Bitcoin to become a proper basis for commerce.
 
IdleRich

IdleRich

IdleRich
Clinamenic said:
Yeah if/when BTC stabilizes, it may ultimately beat out gold as a hedge against inflation.
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You would think so wouldn't you, in that there is no structural reason why gold should be a hedge against inflation, it's just traditionally been where people run to.... whereas bitcoin is fundamentally designed to be anti-inflationary.
 
IdleRich

IdleRich

IdleRich
Clinamenic said:
And to my knowledge there aren’t any stablecoins built upon Bitcoin, or any that are strictly collateralized by Bitcoin in some respect. Something like that may allow Bitcoin to become a proper basis for commerce.
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What's a stablecoin? I mean, I think I can guess, but is a recognised term or is it just a word you use or what?
 
Clinamenic

Clinamenic

Binary & Tweed
IdleRich said:
What's a stablecoin? I mean, I think I can guess, but is a recognised term or is it just a word you use or what?
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Apparently there are many different kinds, but in general a stablecoin is a crypto asset that is pegged to a fixed value, such as the dollar. This may involve having a reserve of dollars to back up a supply of stablecoins, which would be privately issued currencies. Circle, which issues USDC, and Tether, which issues USDT, are the leading stablecoins with dollar reserves, whereas DAI is an “algorithmic stablecoin” not backed up by a dollar supply, but instead by a vault of various crypto assets that users can deposit in order to mint DAI.

DAI is governed by MakerDAO, a horizontal organization, whereas Circle and Tether are more traditional companies, I believe.
People say Tether is shady and can’t back up their supply.

The head of the Securities and Exchange Commission insists that stablecoins are securities, which I disagree with personally. You don’t acquire stablecoins with the expectation that they will appreciate. You acquire them precisely because they are stable.
 
Clinamenic

Clinamenic

Binary & Tweed
Apparently there was just a report about stablecoins released by some of the major financial and economic organs of the US government, but I haven’t read it nor do I remember the name of it.
 
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