Needless to say, price volatility is not desirable in a medium of exchange.
To be extra clear: I'm not suggesting this should be implemented on Nano. It's too late for Nano. It would have to be a new cryptocurrency using block-lattice architecture and most of Nano's design could be kept (so it's still fast, feeless and efficient to transfer). The major difference:
- A new block type that includes a much harder PoW, creating new units of currency (the user can scale the PoW difficulty to the number of coins they want to generate). In other words, everyone can 'mine' their own block/account chain. But let's use Cuckoo Cycle or similar memory intensive proof of work. New coins can be minted indefinitely.
- No genesis block - it's not needed anymore. Accounts can be opened with newly minted coins.
Analysis of the economic consequences of this change:
- Early adoptors and late adoptors are on a level playing field.
- HODLing is not encouraged. This currency is not going to the moon - it's staying on earth.
- Market cap grows with use not investment.
- Money supply grows only with demand, and as fast as necessary.
- Very difficult to pump, as there would be a bunch of people who have figured out how much it costs to make more, and have huge sell orders just above that price.
- Without the pumps, there would be less dumps too. This is a currency for users not speculators.
- Inflation wouldn't be a constant. When the price is low enough, people will stop making lots of new coins. And coins will gradually disappear from circulation as keys are lost. So the system will tend towards equilibrium.
- The answer to "is it a good investment" will always be "no". It is a very unexciting coin. But it might be very good for payments.
- Users could have much more confidence that the price isn't in a bubble that's about to burst.
Slogan: Like Nano, but not going to the moon.
Can someone skillfully shoot this idea down for me? Has anything like it been done or proposed before?