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RE: Why the crypto can't be stable?

in #crypto6 years ago (edited)

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The main currency or mother currency is Bitcoin which has no central authority/Board to control its mining and supply and demand.
There are many reason like unstable demand and supply situation, no central bank to control supply and demand and varable mining diffculty.

You could have a central authority like the Federal Reserve monitor the price and act accordingly. But, that defeats one of the key tenets of cryptocurrency — decentralization. And, even if there were some central authority, how would that authority remove coins from circulation? Would it buy them? Where would it get the money? What if their available funds ran out?

It is also necessary (and somewhat problematic) to figure out exactly compared to what the currency is supposed to be stable . Stable compared to gold? Stable compared to a “basket” of fiat currencies? Stable compared to a “basket” of consumer commodities? And, even if you choose one of these, how is the software supposed to “know” what the current prices of any of these things?

As you can probably conclude this is very critical issue and has no easy solution.

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