The SolidCoin Economy
SolidCoin is a decentralized currency, this means anyone with a computer can create SolidCoins and it isn't controlled by a central bank.
There are positives and negatives to having currency creation decentralized, some of the positives are :-
- Fairness. Puts money creation into everyones hands rather than a select few
- Transparency. The amount of money created is clearly documented
However there are also downsides :-
- If startup costs are too high to create SolidCoins then it's not as fair as it could be
- If the rate at which SolidCoins are generated isn't based on anything real then the economy can fluctuate wildly
- Rich people can buy a lot of hardware to create SolidCoins and outproduce the less fortunate if there are no real costs in currency production.
SolidCoin tries its best to overcome the negative aspects. Each SolidCoin costs $1 to make in electricity when given the following:-
- Electricity costs 8c per KiloWatt Hour (KWh)
- The hardware used to generate the coin gets 3000 hashes per watt second
By having a known amount of cost per coin everyone can determine when it is right to create the currency for them given their hardware and electrical costs.
SolidCoin also factors in the cost of electricity price increases (10% per year) and mining hardware becoming more efficient at generating coins (50% per year). This ensures that new hardware advances are taken into account, as well as the estimated increases in electricity prices. This means cost of production is going to remain stable, as is what currency creators value the coins at.
SolidCoin's rate of coin generation is therefore heavily tied into the amount of electricity generating coins and ensures that new users who begin creating SolidCoins are given as many privileges as people who started mining months or years ago. The end result is increased fairness, and more stable value, allowing SolidCoins to be the real solution to the global online currency problem.