On Tuesday, December 25, 2001, at 01:50 PM, Adam Shostack wrote:
Many posts have talked about a both a 'fixed level' of money, and a commission. I find this odd, especially as there will be no way to add funds to the system. If you have a commission on every exchange, the money essentially deflates (there will be less of it tomorow than there is today, making it more scarce, and thus more valuable.) Thus it makes sense to hold onto it, making it illiquid, which is a bad thing for a currency. Since this is magic money, why not issue more of it now and again?
For all intents and purposes, the total supply of gold has been relatively constant for decades. A fraction of the total is mined and brought to market each year, but only a small fraction of the total. And yet the assay and marking cost (several percent) has not crippled gold. Further, the fee for assaying and marking (melting, minting, stamping gold bars, etc.) is a fee for a service, and goes back into circulation. I expect the operators of a money changing operation would similarly aggregate their 1% or whatever and use the aggregated fee as their compensation for providing a service. Even if the money deflates, so? If it encourages people to hang on to their money, so? (I made most of my money by _not_ spending what I earned.) In any case, let's see how the experiment turns out. Let anyone try any approach they wish, ranging from "the total amount of money is 1" to "I generate 30% more money in the system every year." As I said, I expect multiple tries, multiple experiments. Right now we are more limited by the notion that Some Big Startup has to Get it Right the First Time. --Tim May ""Guard with jealous attention the public liberty. Suspect everyone who approaches that jewel. Unfortunately, nothing will preserve it but downright force. Whenever you give up that force, you are ruined." --Patrick Henry