It seems Cryptocurrency ( cryptoeconomics) brings in it’s own definition of what “inflation means”. The whole mechanics of it are so much different from fiat currency. Especially for a PoW coin.
I feel like we need to better define all these terms so that everyone is on the same page.
I know some won’t like this, so please correct me:
Monetary inflation= An increase in the money supply Monetary inflation rate = The percentage change of new coins added to the money supply over time Emission rate = The rate at which new coins are added to the money supply Price inflation = A decrease in purchasing power
(A decrease in purchasing power= The price of a coin goes down in value)
Many in the Crypto space have been conditioned by Bitcoin and assume that value comes from a fixed supply and that a decrease to the Monetary inflation/ Emission rate is always a good thing that will cause a coin to go up in value. So when these people look at Grin’s monetary policy they assume Inflation = Price inflation and that the price of Grin will always go down in value.
If most of a coin’s value comes from its security, then a decrease in a coins Monetary inflation/ Emission ratemight weaken it’s network security, which might lead to Price inflation. The complete opposite of what many would expect.
Can you help me understand the claim that value can come from security? There’s certainly a minimum security requirement necessary for a coin to be valuable, but it’s a relatively binary property. As long as a coin is secure enough to prevent double spends, I can’t see how increasing the security will increase the coin value. That, to me, is like claiming US dollars get their value from security ribbons and watermarks.
Tks for responses. Who knew economics could be so interesting?! Kinda sorry now that I steered clear of it in school…had to choose between that and chemistry…
idk 600k grin is more than a whale… thats like a house in LA.
I dont know any one who has a house in any crypto currency…
i used to have 17k link but i bought most of it when it was 20 cents.
a btc whale is some one with more than 8000 btc iirc…
so even buy those standards a Grin Week is not even close to that even in the lowest of the low markets of BTC
If you are talking about a Grin whale then I think you have to quantify it relative to the available supply of Grin. I think that is ca. 26m currently, and 600k is a sizeable tranche of that. I think it qualifies as cetacean. (I think I may be a Grin mackerel.)
604,800 = GRiN whale; (604,800 / 26,096,340) = 2.317%
2.317% of the existing BTC supply = 418,218.50 BTC
2.317% of the existing ETH supply = 2,515,237.89 ETH
2.317% of the existing XRP supply = 2,317,566,371 XRP
2.317% of the existing GRiN supply in the year 5190 = 2,317,566,371 GRiN
Security(currently) comes from inflation. If you keep reducing the monetary inflation rate( without proportionality growing the fee market) then you end up in a death spiral and eventually get to an inflection point where there’s not enough security to protect against a 51% reorg/ someone trying to censor the chain for political reasons/ or just for shits and giggles. So, without enough security a PoW chain could become effectively worthless I.e has no value because no tx is safe. So your forced to rely more on trust.
If there’s not enough inflation to pay for security then miners move to a different chain (this is a much bigger issue with a GPU PoW), or where you’re not the majority hashrate for your respective algo. BCH could be a good example of this after their next halving…
If BCH hashrate drops enough it increases the likelihood of reorg. So, for big TXs you’ll need to start waiting on more blocks before your funds are safe ( ppl already talk about this for whale Bitcoin TX’s). If hashrate drops significantly then at some point you would need to start waiting on a silly amount of blocks (hours/ days) before you could be confident your funds were safe. So, eventually merchants would be less willing to accept BCH as payment, because, the risk of a double spend is too great- The whole value proposition of BCH would come into question. It could end up in a double ended death spiral, where price then starts dropping so hashrate starts dropping more.
I don’t believe the claim that value can come from security is controversial at all. But it would be controversial to claim that in all cases a decrease in security(hashrate) = a decrease in value
If we want to distinguish smaller and bigger whales, we could talk about day-whales and month-whales, but I think a week-whale makes for a happy medium.
There are too many hours to deserve the name whale, and I hope there will never be such a thing as a year-whale.
Not sure how they have calculated these numbers? They seem very misleading.
Eg a 1070 at commercial electric rates( 5c/kw) nets around 0.30 USD per day. These GPUs still retail new for circa $300 USD. So @ 0.30USD per day it could take almost 3 years to ROI. So to say the cost to mine 1x Grin on a 1070 is only $0.39, seems like a joke.
Thus, Grin has the title of being the only crypto currency that can be referred to as decentralized crypto currency.
Grin is not the first coin with infinite supply. Monero and dogecoin both have tail emissions resulting in infinite supply. The difference with Grin is that the tail reward is only on the order of 1% of initial reward.
Note that it’s possible to have both halvings and infinite supply, by making the halvings rarer over time.
In short, Grin is not an altcoin.
It is by the accepted definition that an altcoin is any alternative to bitcoin.
When you consider this year as the 2011 Bitcoin for Grin, and considering that 1 Bitcoin is $19,000 in 8 years, it would be profitable to be patient.
I would avoid using the same rhetoric that’s used to push many shitcoins. There is no expectation of profit in buying Grin.
