Grin Money Explained #4 — Exploring Grin’s Monetary Model

  1. Greater than Bitcoin? Myths around Mimblewimble and Grin Unlocked
  2. Money: origins, purpose and inflation
  3. Supply and Monetary Schedule of Grin

TL;DR version:

  1. Grin’s design can make it a sound form of money only if it is in high demand. A combination of high demand, circulation (use) and a steadily disinflating linear supply rate can make Grin a key new form of digital money.
  2. Grin’s predictable, linear rate supply function is a relevant aspect of fulfilling Grin’s vision of a decentralized, immutable, lightweight, privacy-oriented digital money because it complements Grin’s technical, privacy and network security properties.
  3. If Grin really is to become a used digital form of free speech money it will have to fulfill the 3 properties of money: medium of exchange, store of value, and unit of account.
  4. What is more important than the emissions curve is demand. Important factors that can help generate demand early on are speculation which brings in capital for builders/developers/startups, hype, and positive expectations about Grin’s future, community and properties. Besides expectations, starting the use of Grin in niche circles and communities focused on privacy (cypherpunks, privacy advocates, activists, covert use-cases) will be important.
  5. Grin’s emission over time in terms of volume is fairer than Bitcoin’s, though it’s a guess whether actual value distribution will be more fair.
  6. Inflation, despite being relatively higher and fiat-resembling in the first few decades, will be falling — disinflation is a good property of Grin.
  7. Grin has very strong store of value properties in the long-run, as it will probably be in scarcer supply than gold (if demand is strong for it) and given a high enough loss rate could actually see decreasing circulation of supply.
  8. Grin is an early-stage, high risk experiment. Just like Bitcoin is an experiment, and fiat currencies are too but over a much longer time horizon. The unit of account for most people in the world today is fiat, and USD is recognized and used the world over. Until that is the case for Bitcoin and Grin, they will not reach global unit of account functionality, and until that time we will see much speculation relative to ‘traditional’ fiat currencies.
  9. Check out the charts at the bottom of the article :)

Value of a linear money supply rate

  1. is minimizing monetary inflation over time until it becomes miniscule, while fiat is inflationary and manipulated
  2. is fully transparent and predictable
  3. supply will be so miniscule in the long-run that Grin will likely become a store of value

GRIN’s fair distribution = GReedy It’s Not

Inflation, expectations and soundness of money

Launch and speculation

Loss rate

  1. will we know Grin’s loss rate? Perhaps.
  2. even if we know it, is this knowledge distributed among currency users or just the focus of investors, traders and developers? Doubt it.
  3. even if this knowledge becomes distributed, will most ordinary users even care? No.

Other considerations

Comparing Grin’s monetary model to Bitcoin, US Dollar and Gold


XXXG-01D, ガンダム, privacy, money, freedom

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XXXG-01D, ガンダム, privacy, money, freedom

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