Radix Economics

Discussion in 'General' started by Pizza, Jun 1, 2017.

  1. Pizza

    Pizza I liket the pizza nomnom

    didnt see a thread so I thought I'd make one, probably buried somewhere.

    Given the stable constant supply how will price appreciation work against other currencies digital or not?

    Bitcoin, others go up because of scarcity and limited supply.

    How will our currency appreciate in value? Say $1/coin to $1000/coin?

    Strictly based on supply/demand? Basically simple example. 10Trillion USD supply vs 10 Million emunie.

    The problem I see with trying to have a constant limitless supply is if there are wild supply demand swings you might have the same issue with wild price swings.

    Say demand sky rockets and the system creates 10 Trillion coins basically at parity with the USD. You might have severe loss of purchasing power compared to your base currency.

    You basically destroyed people's investment By hyperinflating it away vs other currencies.

    Or should people be relying on the annual % to for appreciation? What happens if real world inflation is 20% and you only get 8% returns, you are basically becoming poorer.

    Which leads to something like the POS coins with limited supplies, with a set limit supply you are guaranteeing that people's wealth grows.

    Also if your goal is a nobel one to help the average 99er%, wouldn't a limited supply help much more? Basically everything inflated away against the coin, people's earnings and savings maintain their value.

    Given that inflation is a tool for the rich to make the general populace poor by inflating their savings income away, unless they are Savy or connected enough to earn a much higher return than inflation.

    Anyway share your thoughts on how the system will work, can't remember all the specifics from the last few years.

    Sorry for the rant, I guess a first basic question to start off is can Radix emunie reach $10/coin, $50/coin, $1000/coin, with the current economic system in place?
     
  2. Rickard

    Rickard Beta Testers

    There is no guarantee that the growth in bitcoin and similar coins will be high in the future. The bigger it gets, the less % growth there will be. So this can happen with bitcoin too, or any other currencies.

    A limited supply does not guarantee that people's wealth grows. It will only grow in value if it’s popularity (demand) goes up.
     
  3. CryptoScalper

    CryptoScalper Beta Testers

    The whole purpose of Radix Economics is for the price to stay as close as possible to $1. So, $10/coin, $50/coin, $1000/coin would mean that the system broke. Think 10x, 50x, 1000x more coins in your wallet priced at $1 - God willing! :)

    Now we need to see the actual equations.
     
    Last edited: Jun 1, 2017
  4. jonas452

    jonas452 Beta Testers

    Not exactly true( i think...). Price fluctuation is still possible with Radix as far as i understand it. The increase in supply is to keep the price stable but the price won't stay stable if the demand is constantly higher than the supply.

    Even though the supply is created on basis of demand it isn't a 1 on 1 story. Atleast that's my understanding of it.

    Can anyone confirm this? mine or crypto's way of thinking?
     
  5. Anima

    Anima Founders Staff Member

    Price fluctuations are suppressed, but not eliminated. If the long term trend is higher price, the price is allowed to increase, but not by 10-50% a day like other coins in these bullish days.
     
  6. CryptoScalper

    CryptoScalper Beta Testers

    As I said, we need the actual equations to see what range the system allows. It all depends on what you tweak it for.

    By the way, I'm only talking about the DEX. Can't really control what happens on 3rd-party exchanges. But, assuming successful arbitrage efforts, it should eventually reach the system's rate.
     
    Last edited: Jun 1, 2017
  7. trescuernos

    trescuernos Beta Testers

    From my point of view, the goal is the mass market and not the vipers market of speculation; is to buy/sell goods and services, not only to hold. The sucess will be related to the speed of the usage and not in fast ROI. Stable currency allows safe use for the merchants from zero day. I dont think Dan has spent 4 years of his life in fireworks. This is done to last. I am sure we will have benefits in the medium large term.
     
    Lloyd likes this.
  8. Fuserleer

    Fuserleer Radix Founder Staff Member

    Do NOT make the assumption that our tokens are pegged to the $USD...they are not. They are parity for the first instant of launch and that is all.

    If the USD crashes, then token price in USD will go UP...if the USD booms then token price in USD will go DOWN.

    The supply management is very accurate as we saw in the BTC stabilization tests we did. Surprisingly the supply curve was almost identical to the BTC price curve, which shows that it's doing what it's intended to do...that is swapping the variables around....price becomes "fixed" and supply flexible.

    Should someone come along with $10 Trillion and want to buy up all the supply, the system doesn't just create 10T extra tokens on a whim, there are rules to follow, which also adds an element of scarcity.

    It's ultimately just tried and tested supply economics which has been in use for 100s of years...more demand, create more stuff, less demand, create less.

    The cool stuff is how it manages the supply and suppresses the wild price swings.

    If we set the pump/dump suppression too much it can impede general performance and liquidity.

    I did quite a few tests with different parameters when we stabilized "bitcoin" and 3-6% allowed deviation per annum seems to be the sweet spot.

    That means the price is allowed to move +/- 3-6% per year overall, but its a actually applied in a relativistic way.

    JFYI a 3% yearly allowed deviation translates to about 0.01% per day, any more than that and the system steps in to buy, sell, or create currency.
     
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  9. CryptoScalper

    CryptoScalper Beta Testers

    Crash in relation to what? And where will the system be getting the rate from?
     
  10. Fuserleer

    Fuserleer Radix Founder Staff Member

    The system doesn't need to get the rate, the rate is provided to us by proxy via the market itself. The market becomes our oracle.

    For example, if the value of the USD is crashing, say its dropped 50%. If the price of a token was $1 yesterday and since then USD has crashed 50%, the sellers of tokens aren't going to accept $1 anymore are they...they are going to want $2.

    Knowing that, we can track the value of USD also without relying on some singular external source.
     
    Lloyd and lovely89 like this.
  11. CryptoScalper

    CryptoScalper Beta Testers

    What is USD crashing against? Like what currency pair are we talking about here?
     
  12. Fuserleer

    Fuserleer Radix Founder Staff Member

    If the USD is crashing then its crashing against everything....its value is dropping....maybe because the US doesn't pay its bills or some other event.
     
    Last edited: Jun 1, 2017
  13. CryptoScalper

    CryptoScalper Beta Testers

    Say what? o_O

    The +/- 3-6% per year overall thing is straightforward. I'd rather stick to the equations and wait to see the numbers as they come (in reality).
     
    Last edited: Jun 1, 2017
  14. CryptoScalper

    CryptoScalper Beta Testers

    Will the system attempt to take it back to 0.00% or back to the maximum allowed deviation? Just curious.
     
  15. Peachy

    Peachy Founders Staff Member

    Inflation is fair to all ONLY if everyone is inflated equally. Which is exactly what Radix does.

    If there are 10 people in the country and 4 have 100 tokens and 6 have 50 tokens then isn't it the same as if 4 having 200 and 6 having 100? Still the same ratio across everyone, but there was 100% inflation.

    Inflation is acceptable if the rising tide (inflation) lifts ALL boats equally.

    In the current fiat-world this doesn't happen due to bad actors having access to information before the rest of us as well as due to delays of information cascading down through the currency supply chain. With an autonomously independent system (Radix) the inflation happens instantly, automatically and (most important) fairly across all accounts.
     
    danisapfirov, Collett, junsha and 4 others like this.
  16. Pizza

    Pizza I liket the pizza nomnom

    yeah I guess if you release the equation someone can understand it better. Because for example the USD scenario would mean $0 price appreciation maybe a loss, but that might be made up my having more tokens issued.
     
  17. Anima

    Anima Founders Staff Member

    Its just because we are so used to ROI coming in the form of price increases, not by balance increases of a given good. Radix will have its appreciation/ROI in more holdings, rather than purely by price.
     
  18. Pizza

    Pizza I liket the pizza nomnom

    Yeah that's understood but you would still convert it to some sort of numerical value measurement to know your rate of return.

    But we'll see I'll dump a good chunk of fiat into it, see what happens only expect amazing things given this puts bitcoin to shame.
     
  19. Alfred Duler

    Alfred Duler Beta Testers

    It will not be a stable constant supply ... it will depend on the capital new entries bring with them and the frequency of these new entries.
     
    Last edited: Jun 15, 2017
  20. Lloyd

    Lloyd Founders Staff Member

    There can be new supply created without new capital being injected into the network. The creation of any Asset token other than RAD requires the burning of RAD tokens. Thus a demand is created that generates new supply that is distributed to the account HODL and service providers.
     
    Alfred Duler likes this.

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