Another thread got me thinking about monetary velocity.
“The velocity of money (also called the velocity of circulation of money) refers to how fast money passes from one holder to the next. It can refer to the income velocity of money, which is the frequency at which the average unit of currency is used to purchase newly domestically-produced goods and services within a given time period. In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. Alternatively and less frequently, it can refer to the transactions velocity of money, which is the frequency with which the average unit of currency is used in any kind of transaction in which it changes possession—not only the purchase of newly produced goods, but also the purchase of financial assets and other items.”
I don’t know much about this, but it seems to me that the network scheme encourages a pretty high velocity of safecoin. It won’t be too hard to get some and there will be a lot of opportunity to spend it.
I think that, while it should definitely increase in value with time, its coupling to network resources will have a moderating effect on volatility. Therefore few will be hoarding it–except for crowdsale people in it for the long haul, maybe. But those amounts held by crowdsale participants are not going to have a choking effect because the safecoin ecosystem is, by definition, dynamic.
And this plays back to one of my favorite hobby horses: broad and continual granular creating of small amounts of safecoin to individuals all over the world.
That’s just some thoughts I had. I’d be really interested to get input on this angle from others who have more knowledge/experience with currency dynamics.