Re:Bitcoin: Update network descriptions to be more accurate
by wmf on Sunday December 31, 2017 @02:06AM
(#16039724)
The crypto money supply is predetermined
No, it isn't. People just have trouble imagining non-crackpot cryptocurrency because they've never seen one.
For a stable price you'd need a crypto that adjusts mining difficulty in response to changes in the amount of demand (or something like that?)
Right, you can adjust the block reward so that the rate of issuance of money tracks the rate of change of demand.
However, the USD-to-Crypto price is something outside of the blockchain, so as far as my understanding goes you can't really use that as an input
There are some projects that use "oracles" to publish price information on the blockchain, but then you get into a bunch of complexity about electing oracles and taking the median price of multiple oracles.
I guess you could try to use transaction volume as an input but that seems like a bad metric because it's a) gameable and 2) does not necessarily correlate with external demand for the crypto currency.
Right. You can also use difficulty as a metric (based on the theory that higher price makes mining more profitable which causes more miners to mine which causes difficulty to increase). https://blog.ethereum.org/2014/11/11/search-stable-cryptocur... Note that some of these techniques don't guarantee stable value, just less volatile value.
No, it isn't. People just have trouble imagining non-crackpot cryptocurrency because they've never seen one.
For a stable price you'd need a crypto that adjusts mining difficulty in response to changes in the amount of demand (or something like that?)
Right, you can adjust the block reward so that the rate of issuance of money tracks the rate of change of demand.
However, the USD-to-Crypto price is something outside of the blockchain, so as far as my understanding goes you can't really use that as an input
There are some projects that use "oracles" to publish price information on the blockchain, but then you get into a bunch of complexity about electing oracles and taking the median price of multiple oracles.
I guess you could try to use transaction volume as an input but that seems like a bad metric because it's a) gameable and 2) does not necessarily correlate with external demand for the crypto currency.
Right. You can also use difficulty as a metric (based on the theory that higher price makes mining more profitable which causes more miners to mine which causes difficulty to increase). https://blog.ethereum.org/2014/11/11/search-stable-cryptocur... Note that some of these techniques don't guarantee stable value, just less volatile value.