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Old 11th January 2020, 06:06 PM   #447

Join Date: Apr 2015
Posts: 1,697
Originally Posted by psionl0 View Post
There was a thread about demurrage a few years back ( It is indeed a form of negative interest rate on bank accounts (not necessarily all of them). In the case of notes, holders have to buy stamps and affix them at regular intervals in order to keep them valid.

The main difference between demurrage and inflation is that with demurrage, you don't have the endless price/wage cycles and loans don't lose their value to inflation so excessive interest rates are not necessary.

Cryptos can easily be designed to implement demurrage on a continuous basis. In fact, one was actually designed - freicoin. It hasn't really taken off in the public imagination even though demurrage replaces transaction fees.

Thanks. That's very interesting!

I guess it's kind of ... not unlikely, that some economist, some time, would have tried to think up some 'ideal' currency.

Crypto does seem to offer a way. Not bitcoin, but perhaps one of the others, perhaps one yet to be put out there, that, in theory, and if people took to it, might actually work as some kind of global currency that doesn't have the glaring shortcomings of the USD or gold or such other.

As for demurrage, surely in such a scenario, the mattress would be the rational place to park one's savings? If, that is, there were no inflation? Although I guess you'd still incur a cost in terms of physical risk, or of physical security to mitigate that risk.

But I haven't yet read that thread you've linked. I look forward to doing that, later on. No doubt these basics would've been addressed there.
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