Quantum Project – Deflation, QuantumProject
The emergence of Bitcoin ter 2007 caused a broad multitude of reactions among traditional financial sectors. The very first cryptocurrency wasgoed, and still often is, seen to be fundamentally flawed, owing to the fact that there is only a set amount of Bitcoin which can everzwijn be mined. However, this very fact about the nature of cryptocurrency is the same thing that its volgers voorkeur is its saving grace. With Bitcoin, coins are mined by solving an equation, the value of which is known, which then contributes to the blockchain. Bitcoin has a mounted provide cap of 21 million coins, meaning that it is likely the last Bitcoin will be mined around the year 2140. It is this cap which is often the subject of consternation and worry among traditional financial marketeers. But spil wij shall see, its inherent deflationary nature is not necessarily anything to worry about.
From the very embark, part of the entire idea behind Bitcoin wasgoed that hyperinflation is essentially unlikely. Spil there will not be any more than the set amount of Bitcoin everzwijn produced or released, it is not a market which can go through any rapid zuigeling of inflation. Te traditional markets, this would normally mean that the value of the currency would also never waver much. However, there is one big problem with this treatment to currency: such a system does not have much liquidity, meaning that it has a limited capability to buy or sell an asset without causing a drastic switch ter the asset’s inherent value. A yam-sized result of this poor liquidity is that big investors from other markets cannot lightly or reliably inject into the cryptocurrency market with any kleuter of sizeable investments. This, te turn, only contributes further to the deflation of the cryptocurrency. Not only that, but it also causes a thick amount of scepticism, which is something no market wants if it is to be spil strong spil possible.
Traditionally, deflation is seen spil being a sign of a poor or powerless system. Most monetary ecosystems will want to avoid deflation spil much spil humanly possible, spil it essentially means there is a lack of welvoeglijk growth. But cryptocurrencies are so fresh, unique and widely different to the traditional forex options that it is difficult to draw effortless comparisons inbetween them. At least, you cannot keuze that they are equal, and this itself leads to all sorts of problems. The primary concern with deflation, of course, is that it might well lead to a fall te costs. When you add that worry to the poor liquidity you see ter Bitcoin and other cryptocurrencies, you can see why traditional investors might begin panicking. But it is not all so ordinary.
When individuals are going through periods of recession or other monetary hardship, it might well mean that they flock to a more liquid market. When it comes to the likes of Bitcoin, this could well be a very good thing. Ter deflationary currencies such spil Bitcoin, deflation itself will most likely bring about a rise te price. Seen from this perspective, it is hard to say that deflation is a bad thing for any cryptocurrency te any sense.
If deflation will likely increase the value of the currency, you might argue that it is something that wij want to attempt and bring about. Albeit cryptocurrency is already very deflationary, being able to increase the rate at which the market deflates might well mean an even higher or swifter peak, and that is something that investors everywhere would want to get te on. But spil wij have seen, the lack of liquidity ter Bitcoin and other cryptocurrency markets means that larger investors are often effectively excluded from partaking te such investments. Is there a way to marry the fact that thesis investors might want to benefit from the coin’s rate of deflation, with the understanding that it is presently fairly difficult to do so?
Fortunately, it seems spil tho’ there might well be a solution to mitt. If you want larger investors to get involved, you need to be able to ensure that larger metselspecie flows can come and go without causing any unexpected or major shifts ter market price. At present, this is not the case with any cryptocurrencies. But it now seems that it might actually be possible to make this toebijten. All you need is a professional treatment to bringing about more and more liquidity ter the marketplace. This will inherently mean a swifter growth for all – and a more stable one. So how might this be achieved?
One way is to create a liquidity pool of funds, and then permit the cryptocurrency marketplace to increase the depth of various order books. The concern that is instantaneously thrown up at this point is how you could possibly fund such a liquidity pool. That’s where Quantum tokens come te. Using Quantum tokens, wij could reasonably expect to provide ge and lasting liquidity for cryptocurrency markets for the future. Where it gets interesting is te the way that the liquidity pool will function. Any income generated from the liquidity pool will be used to then buy back Quantum tokens at the best price, and then subsequently ruined permanently. This process of buying back and demolishing will decrease the number of tokens te existence and therefore increase the value of the remaining tokens. Effectively, liquidity will have bot created. With also keeping back around two thirds of the issued tokens, the liquidity pool can be enhanced even more ter future, providing Quantum tokens a real chance for long-term sustainable growth.
While cryptocurrency is inherently deflationary, this can be lightly used to one’s advantage. The Quantum token (QAU) is a good example of how it might be possible to increase deflation and so raise the value of an existing coin. Spil it turns out, deflation might not prove to be such a bad thing after all – and there might be an chance for large investors to make good use of cryptocurrency yet.