Hugo I am curious what do you think of my post below. Current Bitcoin PoW situation with Bitmain’s ASICs actuallly has some PoS characteristics and it makes PoW even more robust in a way. https://firstname.lastname@example.org/skin-in-the-game-of-centralised-mining-bca1f42d1710
In general I agree with your case, but having evidence from real world or macroeconomics, we see that people can change their spending habits completely — they may all start to spend less of their income on services and real GDP may fall and that is why I don’t believe utility is constant. People may become pesimistic about economy and they hoard…
Agree, you could also try to design monetary policy inside network that addresses such issues, but then we are back to central banking :) unless we can make an algorithm that ensures targeted token dynamics….
The thing that you are perhaps missing is that utility doesn’t necessarily stay constant — if more users switch to investors, it might fall. And velocity might fall even more. It really depends on how people who exchange goods perceive it and behave. So yes, I would say it is not about economics but more about behavioural economics.
Good question. In theory it should, but in practice that is not the case because such deflationary effect (more tokens held by investors and less by users) makes even more users hold onto their cash.
Thank you Omar. Velocity may be the hardest to find, but I think with blockchains we could estimate it, if someone would dig into it and perform a study. Aggregate value of transactions are transaction for actual demand, so when token is exchanged for utility consumed. Not between exchanges or for speculative use.
You nicely specified key variables that determine value of crypto assets, particularly velocity and impact of speculators vs. actual users that I wrote about last time: https://email@example.com/network-output-and-velocity-of-tokens-da7e800ca4c0