Cryptospace is shit, but Grin is bliss (probably not)

I think the general consensus amongst economists is that it would not converge(Depending on what economic theory you sign up to). It would only converge to an equilibrium if all factors remain the same- But they never do because economic output is always changing. Also, if a central bank is trying to increase the money supply( by essentially giving banks more leverage/ the ability to lend more debt) It doesn’t impact the actual economy( money is not effectively created) until banks lend it out. Just like Grin’s emission doesn’t impact the market until miners elect to sell it.

I’d partly agree with that; I think most cryptocurrency investors don’t really care about privacy(yet). they’re just speculating/ trying to get rich( It’s also why I like to compare Grin to Litecoin or BCH instead of Monero). However, Grin discourages this kind of speculation, so we need to create demand from other means, i.e from actual usage. Even in decades’ time Grin still won’t be a good relative value proposition for speculators based on it’s monetary policy. There’s going to be far better options( lower inflation coins). The biggest demand for Grin will come when we give users the ability to spend it.

Why would miners necessarily need to buy coins to increase the price? Grin still attracts demand from speculators( hence why price is not at ATLs) and miners holding coins decreases the effective supply. When a coin starts going up it then attracts more demand from speculators(it’s like a domino effect) the more it goes up the less rational people become and the less they care about on-paper inflation. They’ll also start to justify Grin’s rise by other means, eg speculators who discover Grin years after launch might see value buying it because they haven’t missed the boat (so to speak) due to Grin’s slow emission and they aren’t as disadvantaged vs early adopters like they would be with pretty much all other coins.

What’s the point of having a non-capped emission then?

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Miners will continue to mine at the same rate, it is a function of price. If the price stays the same, The value of the coins produced every minute will be the same regardless of the circulating supply.

Security will decrease, but a lot slower than capped coins. Price will probably go up too.

How would you do that? In my mind grin would need to offer something unique and that’s memo in the proofs and an ability to reject incoming tx

It seems mathematically nice and more fair, i don’t see many other advantages.

In regards to the your economic points i can’t say anything since i have no knowledge about that. But i really doubt miners would not sell their coins, would love to hear their input

I think the buying power would be smaller, so it’s not the same

Dark markets are one example.

It might be mathematically nice and fairer, however, considering how Grin was created, Id’ bet it would have been designed with perpetual inflation, regardless. Bitcoin is betting on fees alone being enough to survive, however, there’s a genuine risk this won’t work out, it’s completely untested and it’s been a real concern raised among the Bitcoin crowd, it used to get talked about a lot more.

“Bitcoin should have had a 0.1% or 1% monetary inflation tax to pay for security,” Todd said, further arguing bitcoin “will die” if it doesn’t change the limit.

Grin is designed like a younger brother of Bitcoin (paraphrasing Igno), the constant emission/perpetual inflation is like a hedge against Bitcoin failing. How much inflation is enough? 1%, 0.1%? no one knows but I guess Grin’s slow emission gives us more time to find out.

Why would you really doubt that? It’s common practice for miners to hold a portion of their earnings, anyone who’s mined before can vouch for this. A lot of “hobbyist miners” will even hold everything they mine on the notion that it will be worth more in the future. Commercial farms are more profit-driven and could have significant OPEX/ CAPEX to think about it. In the case of Grin where the Hashrate is controlled by a few large farms running G1s that have already ROI’d, they could certainly decide to start holding x percent of coins they mine, knowing that in doing so they’re reducing the relative inflation rate by not letting them hit the market, thus reducing the demand required to push the price up, increasing the probability of being able to sell them for more in the future.

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Yes, but you can’t compare grin’s current inflation rate to any other coin, so i see no incentives to hold grin from miner’s perspective. I also don’t think a miner is interested in ROI breakpoint, all he cares about is his profit, so why would he decide to reduce it after his ROI went through? I understand that he could keep some proportion but i doubt major miners do that when there’s such a high inflation rate, too risky imo. I ignore smaller miners since they don’t really change anything whether they sell or hold

I once argued that we should have linear inflation with limit reaching 2% instead of zero (i picked 2 randomly), exactly because you reach the same problems

I never liked black markets and i hope grin’s main goal is not to be the main currency there

Grin’s inflation rate is the same as Bitcoin’s for it’s first 4 years. It seems like you think there are no speculators in Grin? and that all speculators care about is a coin’s inflation rate? If there were no speculators then the price would be zero already, if there were hardly any speculators then it would be much closer to zero- Who do you thinks holding the 71 million Grin in circulation? Sure, the Inflation rate is a factor in deterring speculators, but it certainly doesn’t eliminate them. I’m using ROI assuming that ROI would cover CAPEX, so new hardware can be purchased to stay in business. From an operational perspective, the biggest concern would first be covering OPEX & APEX, so the business can operate and keep running into the future. Cryptocurrency mining is one of the riskiest and speculative businesses you could operate, anyone who does it has a good appetite for risk.

Looking at Bitcoin exchange flow data you can argue that all miner selling doesn’t typically change anything. It only accounts for 5-10% of exchange inflows.

Yes, right. I totally agree. Make a simple comparison, for example, the prices of basic goods in Grin and USD. Grin must be linked to the purchasing power of goods, before you can have purchasing power.

The current cost of producing 1 Grin, let’s say that the price of Grin in the Spot Market is currently 0.76 USD or 11030 IDR

Example: End of April 2021
1 Chicken Egg in Grin 0.28 GRIN
1 Chicken Egg in Fiat (IDR) (USD) 3000 IDR 0.22 USD

The more eggs that are paid for using GRIN, the more demand and need for GRIN and the cheaper the price of chicken eggs will be in GRIN.

The effect of GRIN emission rate on prices cannot be properly assessed at this time because GRIN is not in the pockets of the world community and is not used for transactions.

Currently, GRIN has only moved from pocket to pocket by user. The supply when compared to Fiat was very limited.
I don’t understand the term circulating amount. The truth is that GRIN does not circulate, it just moves. So it is sufficient to say that it is assessed from just one metric, namely the current supply.

And I guess don’t forget that when Grin is produced by miners, they will save half or two thirds, and half or third will be spent, if this money can be spent directly to exchange whatever needs he wants.

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I was talking only about the big miners

I agree, but i don’t see why someone would change their financial plan (to change the effective inflation rate), mining is risky enough by itself, i wouldn’t risk even more. But sure, maybe some would

I meant to say that smaller miners don’t change the effective inflation rate

I think it is clear that people are willing to risk anything in order to get a steady income that can support their daily lives. Everyone is going to mine, if the cost to buy mining equipment is low (low barrier to entry), all tools have a limited hashrate, all you need to make sure is a guarantee that all miners get an amount that can still meet their daily needs month to month, year to year, and so on.

People will no longer think about return on investment from initial capital if they already have a fixed income, except for big miner big money only.

This revolution that must be created, if not, no matter how great Grin and its technology are, it will not change the problem of pure decentralization, namely power big money.

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With that said, grin is even far from being “bad”?