This is reference to an earlier topic here (the link takes you to @dirvine’s answer because it’s one of most interesting, but the entire topic is interesting):
One of the questions seems to be what should “lead” - the exchange price or the resource price (or perhaps self-adjust the latter so that it effects a stable exchange rate of Safecoin on various exchanges).
I find that question extremely interesting.
I’ve just started thinking about this, but my initial thinking is that the resource price (supply/demand) should lead and self-adjust purely based on supply and demand (I wouldn’t even use averaging).
- Supply/demand data should be available raw (I’d be happy with something like system load average - current, X min, Y min)).
- Whenever deliberate data/price manipulation (price management, price control) is introduced, it invariably results in unforeseen problems and reduces the transparency.
Safecoin should be traded like a commodity (which it is) where the current price is how much you’d actually have to pay for SAFEnet resources right now and exchange prices would self-adjust.
- It’s pointless to have a stable price (“tuned” Safecoin exchange rate) denominated in a bunch of unstable cryptocurrencies. I
- (gold bug alert) Think the gold standard from 100 years ago (where the exchange price “leads”) vs. free gold (natural price of gold as determined by supply and demand)
I could probably come up with 3-4 additional arguments, but it’s late…
One “downside” that I predict would be raised if I don’t don’t mention it now: some may claim my preferred approach would create ample space for “speculators”, “middlemen” and “profiters” and is therefore bad.
That would be a false argument (please visit www.mises.org for details).
I’m sure there are other downsides to my idea… I hope to hear different views and counterarguments from others.