I'm surprised that there isn't a cryptocurrency that uses much more complex rules to determine the number of coins mined in each subsequent block.
It seems like the blockchain could be used to evaluate the health of currency's ecosystem in a way similar to taking a look at the system monitor or result or cat/proc/loadavg on your desktop. Heck, the blockchain could even be used to store 'extra' system state information with every block, like current exchange rates with other currencies, which would then be used to determine the reward for the next block.
I guess all I'm saying is that I'm surprised there's not a version of bitcoin with an algorithmic 'central bank' type of function, rather than a very straightforward 'inflationary' or 'deflationary' algorithm.
Milton Friedman was a monetarist, who believed that the ideal monetary policy was for the currency base to grow in time with real economic growth since this would result in neither inflation nor deflation of prices. If you could deduce economic growth from the blockchain you could make a Friedman coin.
Bitcoin/Dogecoin is basically a public ledger. Couldn't the system be set up so that this system of rules did destroy coins during a recession by reducing everybody's balance?
It could probably be gamed very easily by speculators going in and out of the cryptocurrency, but there shouldn't be a technical reason why it can't be done. This is in sharp contrast to traditional currencies: You can't send in the police to confiscate 5% of everyone's dollar bills.
If you reduce everyone's balance at once, it doesn't really have any effect on the money supply, all you're really doing is changing the numbers people use.
I've been thinking a lot about this, but the problem you run up against is that it's difficult to distinguish real economic activity from one person shuffling money around, and similarly, it's easy to hide activity by keeping a private ledger. That said, it's possible the inertia of the real market would stop anyone manipulating inflation in this way. I'd really like to see an experiment on these lines.
It seems like the blockchain could be used to evaluate the health of currency's ecosystem in a way similar to taking a look at the system monitor or result or cat/proc/loadavg on your desktop. Heck, the blockchain could even be used to store 'extra' system state information with every block, like current exchange rates with other currencies, which would then be used to determine the reward for the next block.
I guess all I'm saying is that I'm surprised there's not a version of bitcoin with an algorithmic 'central bank' type of function, rather than a very straightforward 'inflationary' or 'deflationary' algorithm.