In the 1900s Silvio Gesell came up with concept of 'stamped money.' We are taking his great idea, improving upon it and implementing it on top of the bitcoin blockchain.
Natural money has a carrying cost, of Decay Fee. This is a type of controlled inflation. We add this to our money because real things in the world have a decay fee. If our money is going to be 'real' and follow the laws of nature, we need it to decay as well. It has a number of cool effects like:
- Increasing the Flow of Money. While you hold natural money, you are responsible for paying the decay fee. As a result people tend to use it more quickly than when they can hold onto it forever.
- Driving Interest Rates to 0 or below. Because people don't want to be the one's to pay the decay fee, they find something to do with their money quickly. One of the things they can do is loan it out. When many people are trying to make loans, the rate gets driven down lower and lower.
- Controlling Inflation. Since our money decays at a variable rate, we can adjust the rate to take more money out of the economy. When money comes out of the economy, we can reduce inflation.
How it works
- When you spend your money, the system will calculate how long you've held that money. This will produce a fee that you have to pay to complete the transaction. This will show up for you on your receipt like sales tax does today.
- The fee goes into a central account where it is divided up and paid a dividend to everyone that owns 'prefs' in your account. These are all the people that have ever put money in your account.
- We can also tax these decay fees. This will help us get rid of things like the income tax. It will also help other municipalities more easily raise taxes.
Watch more about Gesell: