Can we design a crypto-currency that promotes wealth equality and discourages speculation and hoarding? One that is able to adjust itself to demand, expanding and contracting to keep prices stable?
To prevent hoarding simply build in an expiration timer. If no transactions are occurring for some length of time, begin subtracting value or just delete it. In order to save, one would have to buy some other safe asset, and the currency itself would remain circulating and available for maximum economic activity.
2) Promote equality:
Transfer the above value to wallets with more activity. I think that this might generally have the effect of moving it to people who must spend it quickly, and so presumably have less to begin with.
3) Fraud Management:
It’s probable that then people would find ways to keep their wallets churning, perhaps transferring between several wallets. It should be possible to watch for such repeated transactions and counter them, however. What other scams might be possible?
4) Economy-wide side effects:
What would be the effect on government services if all national currencies were replaced by such an auto-leveling mechanism? Governments would have to tax it, the way states in the US do now. It’s not necessary to issue a currency in order to tax it. Government could also continue to issue bonds for safe savings instruments.
The transfer mechanism from richer to poorer could also reduce interference in government by the rich and promote democracy. Governments of course, typically can provide cheaper, more efficient services by cutting out profit and management overheads. With increased financial equality, and less policy manipulation by hoarders, services should be much better targeted to real needs.
What about international trade? What other side effects might this have?