Please disregard the thoughts behind this post. Charles Hoskinson explained to me why the number of coins and market capitalization aren’t effected by what I had proposed. I am a zealous believer in the Project and like so many others I want the world to be improved by its full deployment. Thanks to all!
I would like to address every member of the Cardano Project from Charles Hoskinson out to every member of the team and those interested in the Project’s success.
A reasonable argument for a buyback and policy of ADA token for the sake of the Project.
The Cardano Project is an incredibly ambitious attempt to take current models and technologies and to make exponential improvements upon them in so many different fields, all while inventing completely new techs and systems. It is a veritable technological revolution. Unfortunately, we are not truly considering how ‘real world’ economics is affecting the ‘price’ of the token. It seems that the resulting underfunding of the Project, will produce needless retardation on the level of the research and development, and slow the timeline for the eventual deployment of the whole platform.
Let me confess upfront, I’ve already invested in ADA. And I sold, making a healthy profit. Now, my investments, purely for profit, are in ‘blue chip’ coins. Today, the ADA I own come after the epiphany that Cardano can truly make the world a better place. The entire conceptual idea of the Project can revolutionize the world, and not just the cryptocurrency ecosystem. But its affects will reach down to the micro-economic level; it can make the lives of people in underdeveloped countries far, far better. I am a stakeholder, now, as many people are because if the Project’s ideas and theories (even half or a quarter of them) can be created and deployed, the face of world economics can be pushed towards a more democratic place for every person on the planet.
I hold less than a thousand Cardano ADA tokens. In the last week, as of the writing of this piece, the market of the project has dropped from above $16 billion US to just over 14 and back to its starting point. Personally, I don’t care if the worth of my stake goes to zero; I am in this for the ideals of the Project itself. But, the world is not peopled mainly by idealists. There are far more pragmatists or those who are simply driven by fiscal concerns. It seems that a buyback/burn program would offer greater financial incentive to back more vigorous R & D, and a shorter period before deployment. $16 billion US is far too small a sum for such an ambitious project, and then to fund a ‘treasury’ to keep Cardano healthy and productive going into the future.
The BitIndia team announced 2 days ago that it had burned 94.39% of its tokens. The result is that instead of 170 million tokens in circulation, it will only be 10 million. This seems to be the economic reality of having too many units in circulation.
The comparison that I would offer, within the Project, is that the funding of the treasury has been left as an open consideration. Should we not also consider the economic fuel that drives the entire engine? If we are truly operating under a constitutional model, it appears that rethinking the financial basis of the Project, presently, would serve the greater good. The simple economics seems to be that if we implement a buyback/burn plan, over a certain period, we would create a far greater demand based upon a more finite supply of our currency.
I would imagine that the average investor is thinking, “how will I receive just compensation for contributing to work that others will profit from?”
The arbitrary choice of up to 45 billion ADA in circulation was thoughtful, but is proving fiscally impractical. The entire Project is democratic, which is why I am making this proposal for amending our current policy. If a well thought out buyback and burn program were implemented, I believe that enormous funds would pour in. A case in point is Ethereum. I saw the value of that model at $18 US (March 2017), less than 9 months later, it was $1,000. Even though we can all see its shortcomings in scalability and even as a simple store of value, hence the need for the Cardano Project, it has a market capitalization of nearly $95 billion US (with less than 100 million units in circulation).
My question is plain. If anyone has taken just the time to watch Charles Hoskinson’s whiteboard explanation of the Project, one would recognize that Cardano is revolutionary. And what couldn’t the Project do with nearly a $100 billion as our market capitalization?
Without some mechanism for buyback and burn, we may have idealistic visions of what Cardano can do, but if we are not adequately funded, those ideas will come about at a far slower pace. Hence, we are slowing the growth of our potential and progress. Let’s say that Microsoft had not had proper funding while developing Windows. Software which allowed for widespread adoption of graphical user interface may have been released years behind its potential. Like MS or not, that’s not important, what is important is the entire structure of the internet would most likely have been in arrested development. I believe that maybe we are at a similar place now on the Cardano Project, potentially harmful underfunding. Personally, I want to see the Cardano Platform in place yesterday. I don’t want to return to the past with a dial-up modem; I want to see Cardano’s implementation as soon as we can make it happen.
Taking an objective point of view, I propose that the importance of the Platform, and its necessary components, will play a definitive part in the general belief and acceptance of digital currency as a means of exchange and store of value. I apologize if I am overstating the case, but it appears to me that the superstructure of the future of the entire cryptocurrency ecosystem will be built upon the Platform of the Project. As a layman, an historian, the necessity and worth of the fruits of this Project, at least to the world of digital currency, appear to me to be akin the necessity and worth of Edison’s incandescent light bulb.
The point of the MS analogy is that they had to and must ‘pay’ to hire and keep the best talent. Altruism is a noble concept, one which I support. But at the end of the day, teams need to get a paycheck, and someone must pay the bills. With a thriving economic basis, the Project would, metaphorically, have the ropes holding the ship to the dock released and the ship would bolt out to sea.
It seems like the number of tokens (in circulation and projected) and their potential values, seems to have been overlooked as an incentive to basically ‘crowd fund’ one of the greatest projects of its kind! Imagine this Project funded at maximum levels? The R & D could be done at light speed, with more individuals and teams brought on board, devoted to the cause.
The Cardano team refer to our ecosystem as a democracy. Well the funding of the Treasury has been left as an open question, with good cause. If we are still in the process of creating our ‘constitution,’ why don’t we, while the matter is still fresh, revisit the idea of the monetary valuation of ADA vs. the potential to immensely increase funding of the Project in its entirety? One of the special aspects wisely brought to the Project from Ethereum (and other sources) was the basic logic, at its inception, was that for Cardano and the entire digital currency space to survive and thrive it had to eventually interface with the legacy financial markets in an integral manner.
Even the purest idealist must realize that for the new world which we are all pioneering to be viable we would eventually have to put our feet on the ground. The entire market cap of digital currencies reached over $800 billion US. We can all see that virtually no government is going to ignore a market that will soon be over a trillion dollars (about one-twentieth of the entire US government’s annual budget). The days of the idea of complete personal anonymity in our ecosystem are over. That is how forward thinking the Project is, we are allowing transparency (sunshine) into every corner of the Project. KYC and AML regulations aren’t going anywhere. We should welcome this scrutiny. Consider this, in the US alone, the SEC, IRS and Congress are making vast inroads into our space. The Project can fill the vacuum that currently exists for a working ecosystem that acknowledges the current political climate for all digital currencies and how they will interface with the governmental and financial systems.
What would I say to anyone about our transparency, reality and people’s desire for anonymity? For the next 3 to 5 years, ‘every’ regulation and law that comes into our space gives it greater credibility, solidifies the value of every viable digital currency and demands (from the traditional financial markets and world governments) the recognition and respect for what we believe in. And rest assured, the entire world is paying attention to the developments in our space. Because our space will hold and increase in value, and I don’t mean simply monetarily but also the technological advancements that our entire ecosystem is delivering to humankind. I mean the blockchain is beginning to be implemented into general business systems…and it is just ‘one’ of a myriad of advances in so many technologies that we are bringing into existence.
The idealism and democracy of the Cardano Project are noble, to a fault! Why not fund it to the maximum? What harm can there be in bringing in more investment, more people, and letting the world see this new “experiment” as soon human minds can bring it into being?
In closing, let me put a human face to the idea of changing our constitution by implementing a reasonable buyback and burn policy for ADA, so that it may be developed and implemented as soon as possible. Forget profits for a moment…as the Cardano Project becomes operational, profits will take care of themselves…think real-life and real people. I can imagine an unemployed young woman in an underdeveloped country finding a job because profits from a more decentralized world economy create the need for filling a new position. For me, that is a victory for all people! To all, thank you for taking your valuable time to read these thoughts!
I’m not feeling it bro. If I have 1000 coins worth $1 each, it’s the same value as having 1 coin worth $1000. It’s jus tthat having more coins with less value make me a little more prone to spend some coins. I would rather have 1000 coins worth $1.
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Way to early to start talking about this when project is less then year old. The team is doing well , has a great roadmap and will take time to implement it. This is all laying groundwork for a decade + long project. If you want high profits don’t expect the team to just burn 80% of Ada because a select few could say awesome now let me sell this. If you believe in project and where it’s going than don’t think that “ok if only they burned them I would have 5x or 10x” , instead buy 5x or 10x if you believe in cardano and hodl until the price matches when you want to get out. Whether it goes to 20 or .02 you can control the price you buy in for , the amount and when you want to sell for a profit or loss .
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Thanks for the reply Dan, very kind of you! I plan to purchase more Cardano ADA, with no desire to sell in under 10 to 20 years, retirement. I personally want to see the project thrive. The Project is revolutionary and will bring all digital currencies mainstream. I believe it will help people in underdeveloped countries in amazing ways. As Charles Hoskinson told me, the number in circulation in relation to demand is not correlated. I told Charles that I simply want the Cardano Project to have over-the-top funding because I am a believer in what the Project will eventually do to the entire financial vis technology and digital currencies. Cheers!