Vertcoin Elasticity

A few people commented that the issue of the subsidy reduction should precede any efforts of PR/Marketing – we do not disagree.

In fact, the roadmap is more of a list of items we are working on in parallel. On that note, we have reached a final decision on the subsidy change discussion. Vertcoin will not be changing the mining subsidy. Before the half of you that were in favor of a reduction lose your cool, read on.

We are most pleased to announce that Vertcoin will be moving to an elastic distribution model. This is absolutely revolutionary in the cryptocurrency world and will bring incredible stability to Vertcoin. This will undoubtedly bring the investors AND users of the coin that we so desperately need. So, what is elasticity? Cryptocurrencies traditionally operate on an inelastic distribution model whereby the supply of coins is fixed or runs on a schedule (halving). Many prominent economists have commented that the biggest thing holding Bitcoin back from ubiquity is their inelastic distribution model. The problem is one of market volatility – supply does not ever adjust to demand and thus you get massive swings in price (bubbles and crashes). With an elastic distribution model, the supply of spendable coins reacts to the market demand. So, why have cryptocurrencies opted not to include an elastic supply? Our guess is that no one has come up with a way to do it in a decentralized fashion. Traditionally, an economy of elasticity requires a central governing body to adjust the supply based on demand (think of the Federal Reserve or IMF). Vertcoin will solve this problem.

People often conjecture about what will increase the price of Vertcoin; the truth is, many of the suggestions are right. Inflation is high, usage is low and demand is low. The only reason Bitcoin has not suffered more as a result of their inelastic distribution model is because they were first to the scene. However, we believe eventually Vertcoin will out reach Bitcoin because of elasticity.

Imagine purchasing VTC without having to fear its value will degrade. That would make a lot of us much more likely to buy VTC to actually use it because we know it will be roughly worth the same as when we bought it. Likewise, the elastic model will prevent dangerous price bubbles. Finally, a cryptocurrency meant to be used rather than pumped and dumped.

There are many many details that go into making this a reality and it will take time for us to develop it, however, we have had some robust discussions and believe we have the solution – it is now a matter of implementation. Those details are intentionally omitted from this post so as to protect our work until we are ready to release it at which point it will be open source. However, what I can say is that the system will account for inflation by reducing the supply of coins in circulation, and conversely it will increase the supply of coins in reaction to deflation. All of this while maintaining a secure, decentralized network.

source: https://vertcoin.org/wp/ann-vertcoin-elasticity/

Vertcoin Elasticity