I have written before about the need to stabilize the Monero price to promote wider usage. My idea is to create a service like i mentioned in that post where a product would be listed with a stable price for a week at a time and reserves would be kept to keep the price stable while the spot price is below the stable price. I will not hide that you may pay more for the product if spot price is higher, but you would also pay less if the spot price was lower (to a minimum reserve anyway).
Would you be interested in such a service?
As an example, at the time of writing a 12oz bag of gratuitas coffee is 147.54mXMR where this service would have it at 154.23mXMR (+4.51%) until Monday when the price would update again.
Edit: an extremely crude example can be found at feder8.me. It is not an SSL site but it has nothing private anyway.
Probably best way to have stable crypto is to have the crypto inherently provide some kind of service, something like filecoin. In that case value of crypto would be closely tied to memory/storage price.
@RealBot @mister_monster How about the “service” of being a trustless censorship-resistant privacy-respecting currency?
That seems like a usecase in itself that doesn’t require anything more.
But that only guarantees safe one way transaction. If that is all you want thats ok.
But for safer transaction you want something like smart contracts. So you can actualy know you are gonna get what you buy for example.
Without some kind of smart contracts you are actualy relying on exchanges (so in reality it isn’t really trustless).
Does monero have some kind of smart contract mechanism? In which case I am talking nonsense😂.
I dont understand what service you would give or get from that.
Something like filecoin, you can provide storage or buy storage without need for some external exchange. Because it is basically “baked in” the crypto (or should be, i am not completely sure it works that way).
@RealBot it’s called being currency
Just that
Nothing else
Ok yeah, sure.
But just being currency isn’t enough for currency to be stable. So i dont see how that should affect its stability. The major reason why regular currency is stable is because it is already widely used.
What’s the use case of dollars besides currency? Euros? Yuan?
They’re stable because they’re used. Are they really stable? Or do they appear stable because you get paid a set rate an hour in them? When prices are going up at the store, are they stable? When the price of computers goes down, are they stable? Is what stability they have a natural occurrence of their widespread use, or the result of central bank manipulation?
Sure, they are not perfectly stable, there is always inflation (sometimes more, sometimes less).
But its not as volatile as crypto. In last 24h difference between monero high an low is ~2% (which isnt terrible by itself but on a longer period its larger difference) and regular currency effectively has almost no volatility in 24h period.
Acording to google 1 year inflation was ~3.4% for dollar. (so probably diff hig low is just a bit higher) Difference between monero 1 year low an high was greater than 20%. So monero is something like 6 times more volatile. (and i am not talking about inflation, but volatility)
So its not exactly the same situation regarding stability.
OK but this 20% volatility is priced in dollars. This isn’t price, this is exchange rate between USD and XMR if you treat XMR as a currency. Which one is the unstable one? Well, we call the one that is less often used as unit of account unstable. But prices of goods in the unit of account, in this case dollars, is not stable. Do you understand what I’m trying to tell you? All currencies are free floating. There is no “stable” currency. Inflation is a rough aggregate measure of prices, it’s not uniform. Price of food goes up, price of computers go down, you do some math based on the size of those industries and some wonky tricks and you get a number that you call inflation.
You can’t get a currency without volatility. All you can do is have market depth to absorb price changes, like you said, USD is less volatile because it’s more widely used. Volatility is a measure of risk, and in fiat, the risk is priced in because it’s guaranteed to devalue, it’s no longer risky to hold dollars, you already know you’re going to lose capital. Also the risk that a central bank can devalue your currency without warning is understated and this creates market distortions. If the inevitable outcome of hyperinflation were taken into account there would be much more volatility. Most fiat currencies are more volatile than XMR.
Inflation is a type of volatility. Inflation is just volatility with guaranteed downtrend in value. I’ll take volatility to inflation any day.