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Comment by zby | Hacker News Reader

The problem with decentralized money is that there is no way to manage the supply - you can only commit to a given supply curve, but you cannot adjust it according to the state of the economy.

Money is a collective action problem, a public good - it requires a solution that bounds everyone - just like defence.

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Some people think this is a problem. Others, a feature. At least now we have the ability to see what happens.

You can have decentralized money without crypto - just use gold parity - but somehow no country uses it now. Maybe they are all corrupt - but maybe it is just not good way to manage the economy.

> just use gold parity - but somehow no country uses it now.

Thats fine. If you don't like deflationary currencies, then feel free to not use them.

Other people disagree, though, and are preferring deflationary currencies.

Everyone can get what they want.

It's worth noting that because of the power the U.S. has over global finance it's hard for other countries not to follow its lead. So when Nixon went the route he went, the rest of the world was to a large extent forced to follow suit.

And maybe it's not, and the government is taking advantage of it's position of power?

Competing tethered currencies aren't gone because they're a bad idea, they're gone because they've been made illegal.

Crypto gives the power to operate such a currency back to the people in a way that can't be stopped.

> you can only commit to a given supply curve, but you cannot adjust it according to the state of the economy.

Why do you think this? Ethereum has changed its inflation schedule a few times recently.

It seems you are basing this on the hard capped supply model of bitcoin which is not the same as every cryptocurrency.

Then it’s not decentralized?

that's a feature to combat hyperinflation. to whoch country's economy would it be adjusted to if its a global financial instrument? individual currencies will be adjusted for sure. Bitcoin can act like a global Gold reserve

Why can’t you do that?

The fundamental problem is probably with the possibility of fork - if it is decentralized then everyone can fork it if he disagrees with the way it works.

But maybe there are some good in-between solutions, less dogmatic, more pragmatic.

Forking is not a problem. It's users voting with their feet.

The possibility of forking is a necessary deterrent in cryptonetwork governance.

If the maintainers of a network become compromised or get coopted by special interests, the collective owners of the network(the holders of the cryptocurrency) have the right to exit.

The right to exit is a necessary part of governance.

You cannot have an binding agreement between everybody if anybody can get out at any time. My thesis is that managing money supply requires such an agreement. Of course you can have unmanaged money - historically we always had that - with gold standard and shells. But it is probably less efficient - because it means you cannot adjust money supply to the state of economy.

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