Price of the market
One of the most important variables that determine the price of a cryptocurrency is its own reference market. Analogously to most canonical economic systems, even cryptocurrencies ones stimulate their potential users to spend their currency in their on circuits in order to provide them products and services of which they have a demand. These systems provide, thus, system which are parallel with existing ones, but supported by a different infrastructure, the blockchain. The types and the frequency the cryptocurrency use will determine its buying power exactly as classic currencies, but without the supervision of a central entity.
Speculative model
There is a particular point of interest in today’s world which determines the use of a cryptocurrency: speculation. The value of today’s cryptocurrencies esteemed on exchange is in part - if not totally - determined by the huge amount of money invested with the only purpose of a rapid return in cash, as happened for the phenomenon of the Bitcoin. On the wave of the first cryptocurrency more “clone” system have been launched, sometimes offering a very high interests determined by as much instabile fluctuations.
Towards real markets
By the passing of time, the blockchain has been revalued for its extraordinary potentialities, so it found new applications in different contexts: from selling cars to support scientific community, to find a person to hang out with or buying food. This has been possible even thanks to the help of the scientific research, which gave the chance to new infrastructures to grow and improve, which are more efficient in terms of security and validation, scalability and use by not expert users. This phenomenon had a significative bearing on the selling price of a cryptocurrency during the phase of selling the token. The price on launch of a cryptocurrency is defined by different parameters such as the efficiency of the system it moves on, the reference market and the maximum disposability of the token. This last one, according to today’s market laws, defines a part of its value, because a general good of limited disposability could be subjected to an increase of its price due an high demand, as it happens for natural diamonds. The Bitcoin, without considering its forks, has a maximum disposability of 21 million units compared to the 84 of the Litecoin or the 100 billion of the Ripple. An unique case is the Ethereum one, which doesn’t give a maximum amount for the tokens emitted, leaving an open question: how is it possible to limit the inflation problem?
Inflation problem
The answer to upper question doesn’t have a merely economic aspect because what emits ETH is not a central entity, but the community that has the necessary calculating capacity to grant the operating of the system through a function of proof-of-work. Practically, the amount of currency emitted is equal to the computational work implied. In fact, producing a currency without a cost - thus without any difficulty in producing it - doesn't give it value, producing, in fact, “scrap paper”. Knowing this, in order to create a token that has not a maximum amount of tokens and a minimum controlled inflation is necessary to define other limits that differ from the concept of capital. One of these limits could be the ensemble of human limits, such as the impossibility of being on two places at the same time or travel for hundreds of kilometers in few seconds.
Proof-of-locationas the new “proof-of-work”
Defining the place and the time of a meeting, taking in consideration possible hindrances, spending money in public means of transport to reach the location, prepare a well structured and interesting speech, consuming in the place you decided or finding some free time are only some of the “jobs” a person has to do to dedicate time to others, because is in the use of the time that we define the wage of a person. Hours of work spent on producing something can be quantified as hours spent on improving the community because both of them require a cost in time and energy. But rather than focusing on the chance of being employed in the supply of a product or a service, of which the total values are always more than the wage earned to create it, we want to offer a paying system that respects the same laws of the marked but simply requires a different job instead of exploiting the computational power of machines or using the time and energy of an employee who assembles on the assembly line.