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The original was posted on /r/monero by /u/Domojestic on 2025-02-13 04:12:27+00:00.
Why are you posting this question specifically in the Monero subreddit? Why not someplace like r/CryptoCurrency? Fair question! I couldn’t find anything about general crypto-discussion questions being disallowed in the guidelines, so I hope I’m not breaking any rules. Other crypto-related subs seem to be very market-oriented, whereas Monero seems to really be about having decentralized, private, secure transactions; my question has to do with this use case for cryptocurrency.
To be perfectly forthright, I’m not sure if I’m a fan of the idea of using crypto as the primary way to complete transactions. The idea of having something totally private and secure is super appealing, but it runs into one issue I can’t seem to rectify, and that’s the total and unretrievable loss of assets in the total pool of Monero that exists. As a parallel, imagine someone really, really rich in a country with a centralized currency dies, and all of their money is hidden somewhere impossible to find. All of a sudden, the total available money in the economy drops, causing things like a drop in GDP, an increase in real debt, etc. Problems, to put it lightly. But, over time, the central currency provider - whoever is in control of the money supply - slowly creates more to offset the difference. So, eventually, all is well. Maybe the rich person’s stash is found, there’s a surge in the money supply, so we get inflation, and over time, the money supply isn’t added to as much, so we equalize yet again.
This kind of protection against massive dips in the money supply seems like an unsolveable problem for Monero, and crypto at large (but especially for something as private as Monero). As far as I understand it, all cryptos have a market cap where, once a certain number of coins have been introduced into the money supply, that’s just it. There will be no more. So, if someone were to amass a significant amount of Monero and then just drop off the face of the earth, the money supply is irreperably dropped, because those funds are completely unreachable. Doesn’t this mean that something like Monero is inherently unstable/unreliable? Heck, in a more “normal” example, a super rich person could have a bunch of money and then die, but not have hidden it; the money is distributed in some way, and eventually gets reintroduced into the market. For crypto, it seems like it’s just… lost forever.
I’m no economist, nor crypto expert, and I fully accept that some of these confusions could be the result of a misunderstanding on my part. I’m a huge advocate for privacy, open source, transparency in institutions, etc. etc., and crypto seems to be like such an obvious part of that, but for as much as I can agree with the philosophy behind it, this practical problem seems way too big to ignore. I’d love if someone more experienced in this than me could explain how this would work!