> It would have much less fear of missing out, much less hoarding and speculation, and demand would mostly be from people actually wanting to transact.
I wouldn't be so sure about this. I'd assume FOMO is rather induced by people observing steep price surges which show them that they could have earned X % in a short time, had they bought a little earlier, than the mere supply function over time.
Had the price remained mostly flat in the way it did until September 2020, there'd have been little FOMO.
I read your text. While I agree that in the long term the difference in inflation rate is almost negligible (after 200 years Grin would have 0.5 % inflation whereas Bitcoin's inflation would be practically zero) it appears pretty obvious to me that in the early years, the difference is huge.
A huge difference in the beginning is crucial for systems that are subjected to the network effect. If early on a system doesn't gain enough traction and users, there's a big probability it will just fade away. So any p2p digital currency system should attract enough users in the beginning or it will be too slow to catch on and be outrun by its competitors.
Sure, Grin would work as store of value practically the same way as Bitcoin would in 200 years. But people don't live that long, so their time horizon for a system to work as store of value will rather be like 30-40 years. If you look at Grin's inflation over the first 30-40 years, it is no store of value, it looses value quicker than regular currencies did in the last couple of decades.
Grin vs Bitcoin Inflation, had they both started in 2009:
2013 - 25.0 % - 12.5 %
2017 - 12.5 % - 4.2 %
2021 - 8.3 % - 1.8 %
2025 - 6.3 % - 0.8 %
Sure, many people became interested in Bitcoin (second wave) because of price spikes. But I still assume the early adopters were only early adopters because of rapidly decreasing and eventually fixed supply.
Unlike a top down governmental currency which is just issued and everybody uses it, a bottom up currency (that has to grow via the network effect) needs a sufficient level of early adopter reward, or it will never become wide spread.
Also, the pure blockchain doesn't really appear to scale well enough to enable everyday payments for billions of people, which might indicate that its purpose might be more in the store of value (as foundation of currency systems) domain rather than in being used for day to day payments.
I wouldn't be so sure about this. I'd assume FOMO is rather induced by people observing steep price surges which show them that they could have earned X % in a short time, had they bought a little earlier, than the mere supply function over time.
Had the price remained mostly flat in the way it did until September 2020, there'd have been little FOMO.
I read your text. While I agree that in the long term the difference in inflation rate is almost negligible (after 200 years Grin would have 0.5 % inflation whereas Bitcoin's inflation would be practically zero) it appears pretty obvious to me that in the early years, the difference is huge.
A huge difference in the beginning is crucial for systems that are subjected to the network effect. If early on a system doesn't gain enough traction and users, there's a big probability it will just fade away. So any p2p digital currency system should attract enough users in the beginning or it will be too slow to catch on and be outrun by its competitors.
Sure, Grin would work as store of value practically the same way as Bitcoin would in 200 years. But people don't live that long, so their time horizon for a system to work as store of value will rather be like 30-40 years. If you look at Grin's inflation over the first 30-40 years, it is no store of value, it looses value quicker than regular currencies did in the last couple of decades.
Grin vs Bitcoin Inflation, had they both started in 2009:
2013 - 25.0 % - 12.5 %
2017 - 12.5 % - 4.2 %
2021 - 8.3 % - 1.8 %
2025 - 6.3 % - 0.8 %
Sure, many people became interested in Bitcoin (second wave) because of price spikes. But I still assume the early adopters were only early adopters because of rapidly decreasing and eventually fixed supply.
Unlike a top down governmental currency which is just issued and everybody uses it, a bottom up currency (that has to grow via the network effect) needs a sufficient level of early adopter reward, or it will never become wide spread.
Also, the pure blockchain doesn't really appear to scale well enough to enable everyday payments for billions of people, which might indicate that its purpose might be more in the store of value (as foundation of currency systems) domain rather than in being used for day to day payments.