I have a desire to create local barter-style marketplaces (on-line and meetups) where good produced by individuals and small businesses can be traded using crypto as the medium of exchange in a permissioned blockchain (on Cardano, of course). A local open goods-for-goods type of economy, with its own medium of exchange. Getting in/out of this economy implies fiat transfer in/out is possible. Within, it is important that the currency has a stable value… perhaps.
As I think this out, it appears there is a need for a value stable currency. Charles has talked about this need to fulfill his vision for Cardano.
But what is a “value" stable currency? It could not be tied to any fiat, since they are not value stable. They are manipulated, inflated, printed at will, devalued purposely and continuously. What about a “basket” of fiat currencies. One pinch of leaven (yeast), leavens (rises) the entire lump.
What about gold, it is value stable? More than fiat, in theory. But is it? What can value be tied to? Your house? Your dog?
Fundamentally, what is “value stable”? Value is subjective and defined by the individual. His willingness to trade one thing for another thing that satisfies some need/want. Value in reality can’t be established or controlled by legislation. It is the outcome of market activity where entities interact and exchange goods. One loaf of bread is worth 18 eggs (to me). One loaf of bread is worth 20 egg, to my neighbor. Why? The value of the bread is subjective.
Establishing a “value” stable currency that is worldwide is very hard, perhaps impossible. You can’t peg value of something that is increasing in supply to something scarce, or vice versa. That does not make sense.
So, economic philosophers… How should the Cardano foundation create a value stable currency (or is it possible)? Should Cardano pursue this, or is ADA the fixed point that all things in the Cardano ecosystem should be relative to? Interested to hear any insight or thoughtful ideas the community may have.