Demurrage required?
Should any demurrage be determined?
If you have a system with constant money creation (per person), then you would actually be constantly increasing the money supply and thus have a constant inflation. Because it is better to keep prices constant (which is good for consumer confidence) and it is also easy if prices remain constant, it is important that the money that is constantly being made decreases by a certain percentage.
If you do that at 7% per year, the money flow will become constant in about 100 years. A demurrage of 30% makes the money supply constant in about 30 years and at 40% it is already constant within 20 years. A demurrage in a coin-per-hour system is therefore very important.
So yes, a demurrage should be established.
Still Have Questions?
The 1CoinH / Ethical Money system is nothing like we have ever seen before. We can imagine you have plenty of questions left.
Please don’t hesitate to ask us. It also helps us to understand what we haven’t explained well enough.
