Re: quote: seasoned Solana devs
The challenge with monetary systems is that money has different roles, one being a medium of exchange, and one being a store of value. Not all systems work well for both.
A store of value requires stability of value. Gold is excellent in this respect because it cannot be created easily (cost of gold created with a nuclear or particle accelerator would be more costly than the nominal value), nor can it be mined in huge volumes (AFAIK annual newly mined gold is <1% of total world stock of gold), and even if gold price doubles or triples, the miners can't suddenly increase their production hundredfold or tenfold.
Fiat currency is awful as a value store because the issuing government can inflate people's savings away by creating currency out of thin air at zero cost. The only thing stopping them is their own restraint. But when they want to create tons of money (2017 subprime crash or for covid) they just do. Current increase in cost of living is only partly due to Ukraine war and to supply chain issues, a large part of it is due to inflation* (governments printing money due to covid). Bitcoin is seen as an excellent store of value in this respect because it is limited in supply and difficult to create.
Fiat currency and the current banking system work pretty well as a medium of exchange (including allowing for the reversal of and insurance against incorrect or fraudulent transactions). Bitcoin is awful as a medium for exchange.
The trick is to devise a currency that can both work well as a medium of exchange, and stable (ie cannot be printed at will, but supply fluctuates to match increase / decrease in economic activity). Whether it is a traditional currency or a blockchain 'cryptocurrency', centralised or distributed etc is immaterial, what is important is the end characteristics.
* note that what is normally referred to as 'inflation' in newspapers and on TV is actually rise in the cost of living. This is only partly due to inflation, but is not inflation. The real meaning of inflation is an increase in the amount of money (value tokens) in the economic system without a corresponding increase in the total value in the economy.
Biting the hand that feeds IT
