You can apply this same argument against fixed supply. And it’s correct. Supply (fixed or decreasing) alone doesn’t dictate value. It reinforces it. Something else has to drive value and demand first.
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no, credibility of monetary policy is the #1 driver of value in BTC. “something else” is not needed. That is a common misconception in monetary econ. E.g. Gold is chosen for its stock-to-flow superiority not because of jewelry use case.
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Replying to @MustStopMurad @panekkkk and
The monetary policy isn't credible though unless you can prove rigorously that fixed supply is the optimal schedule **for security of a blockchain**.
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Replying to @cyounessi1 @panekkkk and
you start fixed supply and do your best to make it work with fixed supply. if all 100s of avenues have been exhausted and are unable to make it work you move to fixed reward (still disinflationary). due to very multivariable nature it can’t be “proven” until we reach that point.
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Replying to @MustStopMurad @cyounessi1 and
panek Retweeted panek
We're talking about different concepts. "Fixed supply" can be taken to mean either: i) strictly the final supply count, or ii) the entire monetary policy I'm referring to the former. You're referring to the latter. I've written a thread on this:https://twitter.com/panekkkk/status/1017088333032378373 …
panek added,
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Replying to @panekkkk @MustStopMurad and
Value of cryptocurrencies IMO is driven mostly by the fact that they provide a secure, self-sovereign, immutable, permission-less, censorship-resistant ledger for communicating value. The credibility of the monetary policy adds/reinforces this value but the above are more impt.
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1) Absolute number obviously doesn’t matter, what matters is how hard it is to create new units. 2) I agree all factors you listed add value, but I strongly believe the disinflation is *by far* the #1 value driver. Even more so than self-sovereignty, though the latter helps too.
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