The main economic issue, as I see it is how to create value for our coin. Value of a new coin can arise from two major sources:
- Reserve / fractional reserve of another valuable cryptocurrency used to buy back the G$. (e.g. Gold standard, Foreign Currency Reserve).
- A utility from using G$ as a medium of exchange and a store of value.
If we use tool No. 1, a fractional reserve, how can we prevent a run on the bank? why people wouldn’t just take the money, exchange it and exit until we would have no reserve left. Possible solutions may be - Model of Exchange rate pricing of rising price with diminishing reserve. But that may lead to an unstable price which is a disadvantage for the coin as a medium of exchange. Maybe a model of limiting access to the exchange. Stable but less attractive.
What about tool No. 2. A utility from G$ as a medium of exchange. That can arise when It’s easier/safer/better/cheaper to buy with G$ or if there are things that can only be bought with G$. Can Gooddollar become the ultimate payment method? We as a community should have things that can be bought or done only with G$. Ideas? (Market places, barter).
Use G$ as a complementary currency wherever there is unemployment caused by low demand & cash scarcity. And best of all a mixture of all the above.
I would like to read your Ideas of how to create value for the GoodDollar coin.
Economic lead for GoodDollar