Comments on E-Currency .
My comment;
Bit-coins are like credits on your purchase of goods and services of the same company. The purpose is to create more demand for the sellers of goods and service of a company, but, is not universally accepted, only for purchase of goods and services of the same company. Almost same thing with credit cards but credit cards can be used internationally.
If they (shopping credit) were universally accepted it would have done the same thing credit cards do, increase demand, but at the cost of more spending. It is like; you will have to work hard in case you want anything more, e.g, money. It is not free you have to sacrifice some thing. Moreover, the credit you get is against a value like foreign exchange. Suppose you spend Rs 100 and you get Rs 10 as credit, its an exchange and the exchange rate is 1:10 (here). It is a strong exchange rate and you have to spend more and more in order to gain more credits and it depends upon prices. Higher the prices the more the credit you should get. Same thing with money, prices go high and the value of money or bit-coins dwarfs unless you increase it.
But bit-coins like money can
create trouble for the debtor. Suppose the creditors do not spend their
credits and accumulate if for long and everybody start to redeem the
same day. The company will broke because it can not satisfy such a high
demand. Prices of the products will go up and demand will go down and,
again, the prices will start plunging. To avoid this situation the
company should distribute credits with an expiry-date and will not
burden the company too much by increasing the expectations and
irrational exuberance. You can simply call it a bubble that will go down
some day…
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