The lucrative privilege of seigniorage is moving from bankers to technologists.
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Replying to @naval
I’ve been pondering what the cryptocurrencies equivalent of fractional reserves and lending will be. Don’t have an answer yet, seems pivotal
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Fractional reserves will not work with a capped money supply. Full reserve lending will not work with a capped money supply either.
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Both rely on an uncapped money supply that is increasing at an exponential rate. If the rate of increase slows, deflation ensues. QE^∞
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If lending at interest is introduced to cryptocurrencies, caps will eventually be lifted or removed all together.
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Maybe bitcoin becomes store of value, actual cryptocurrency has some expansion algorithm built in to blockchain so humans can't change it
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Due to the unknown nature of the future, static expansion algorithms will eventually fail.
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Obvious downside of being adjustable is there's always an emperor who debases the coins. A middle ground with limited ability to adjust?
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I'm working on a solution to this. If you are interested, I will keep you posted once I have something up and working.
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Please do, a major problem still to be solved. Perhaps a spectrum of different crypto value stores that ballast each other?
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