Friday, July 7, 2017

Chinese banking expert gets sandbox wrong

Chinese expert on digital currencies:
Sheng warned that the deflationary nature of digital currencies - unlike fiat money there is a hard limit on how much can be reated - would mean that they would not function well as a currency or medium of exchange in modern economies. Expanding on his criticism, Reuters quoted Sheng as stated that "Bitcoin would reach its ceiling of 21 million in 2140. If it is accepted as standard money, that will inevitably lead to deflation and constrain economic growth." 
Bitcoin has a limit on issuance.  But the sandbox, not block chain actually impose  the oimits, they are built into the miner rewards.

In the sandbox we have a variety of coin issuance, from gold, block chain, to S&L bit error.  We can make inflation, or deflation or hold a mean zero bit error.  We can accommodate central bankers turning knobs.  

Our expert defines the wrong problem, if central banking collapses it is because governments are being bailed out. 

What about  block chain?

It is useful an many use cases, some mentioned here and many more under construction.  These use cases use the database format and shared ledger, but not all of them use coins.  
We are running into mis-interpretation of the sandbox concept. It will be sorted out.

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