- https://www.exploring-economics.org/static/images/logo.png #### Did you know that when we created Serey, we thought long and hard about the philosophy and economics of Serey? If you'd like to read about the philosophy of Serey, please read [this](https://serey.io/philosophy/@daisysun/serey-philosophy) and [this](https://serey.io/philosophy/@daisysun/introduction-to-serey-co-founder-part-2-what-is-daisysun-s-philosophical-conscience-that-has-influenced-serey). #### #### In this post, I would like to discuss the basic economics of Serey and will answer the following questions: **1. Where do the SRY come from?** **2. How are the SRY distributed among the users?** **3. Why do early adopters receive more SRY than later adopters?** **4. What determines the value of SRY?** **5. When there are more users, will my posts become less valuable?** **6. Why does Serey not just create lots of SRY and give everyone lots of SRY rewards?** **7. Who benefits from money creation?** ## 1. Where do the new SRY come from? ## Initially, there are 100 million Serey coins created. The logic of the Serey blockchain dictates that every year there is 10% inflation. In other words, in the first year there will be 10 million new SRY created. - https://serey.io/imageproxy/0x0/http://i65.tinypic.com/35a6ono.png This 10 million new SRY are then distributed among: a. authors and curators (7.5 million) b. interest rate on Serey Power (1.5 million) c. witnesses (1 million) #### What are authors and curators? #### **Authors** are people who write new posts and comments. **Curators** are people who help upvote. Because your upvote determines which posts become more visible, it's therefore important to upvote posts you think are valuable. **Witnesses** are people who help maintain the Serey blockchain using their computer servers. ## 2. How are the SRY distributed among authors and curators? ## In the first year, 7.5 Million SRY are spread over all authors and curators. That means that every day, there are around **20,550 SRY** created and distributed. In principle there are 3 factors that determine the rewards to authors and curators: a. the people who upvote you. If you get upvotes from people with more Serey Power, you receive more SRY b. the number of upvotes you receive c. the amount of SRY already distributed to others. If 20,000 SRY is distributed to others, you cannot receive more than 550 SRY Every post reward is divided among the author and the curators (people that upvote the post). See the following example: -  - *Rewards are divided among authors and curators* ## 3. Why do early adopters receive more SRY than later adopters? ## At the start of Serey, there are few authors. The 20,550 SRY created every day are only spread among a limited number of users. Let's say there are only 100 Serey users. That means that the 20,550 SRY are distributed only among the 100 users. When Serey gets more users, like for example 100,000, then the 20,550 SRY will be distributed among the 100,000 users. That's why people will receive less SRY over time when there are more users. This is how Serey rewards the innovators and the early adopters. - https://serey.io/imageproxy/0x0/http://phdsoft.com/wp-content/uploads/2016/10/Diffusion-of-Innovation-model-845x321.jpg - *Innovators and early adopters earn more SRY, because 20,550 daily created SRY is shared among less people* ## 4. What determines the value of SRY? ## Although users receive less SRY when there are more users, it does **not** mean that the value of their posts go down. Value is determined by supply and demand on the exchange. When there is less supply and/or more demand, the price of SRY goes up. You can compare it to a local market where someone wants to sell durian. } When there are many durians on the market (high supply), the price of durian falls. } When there are many people who want to buy durian on the market (high demand), the price of durian rises. Serey works exactly the same. - http://www.imf.org/external/pubs/ft/fandd/basics/images/suppdem_cht.jpg - *Higher supply leads to lower prices. Higher demand leads to higher prices* ## 5. When there are more users, will my posts become less valuable? ## When there are many users, people will earn less SRY for their posts. However, with more users, the demand for SRY is high. This leads to higher SRY prices. In other words, although you will earn less SRY for your posts, your posts can still be more valuable due to the higher value of SRY. ## 6. Why does Serey not just create lots of SRY and give everyone lots of SRY rewards? ## If we create lots of SRY and give everyone lots of SRY rewards, the supply increases too much. That would mean that the price of 1 SRY becomes less worth or even worthless. We want Serey to succeed. Therefore, the logic of our blockchain creates scarcity in SRY so that the price of 1 SRY will go up. What would happen if the government decides to print 10 times more money? The value would become worthless right? The difference between Serey and the government is that our blockchain is transparent whereas the government is very secretive. Everyone can look into our code and see the inflation rate. We cannot manipulate it. ## 7. Who benefits from money creation? ## There is another difference in how the Serey blockchain creates new SRY and how the government creates more money. When new SRY is created, it is immediately given to the users. Our users immediately benefit. However, our government's money is first created by the Central Bank and first loaned out to Banks and Governments. Banks and Governments can spend the money against the whole value. When the money is spent and comes into the hands of the normal people, much of the money has already lost value due to inflation. Banks and Governments actually benefit from printing money compared to us. It is an unfair system as it puts us, the normal people, at a disadvantage against Banks and Governments. In economics, the benefit for Banks and Governments from money printing is called "seigniorage". An example of money mismanagement is Zimbabwe where the government printed so much money that the Zimbabwe Dollar had become worthless. - http://3.bp.blogspot.com/_cvdgPlEKW9k/TI7vIvYMA7I/AAAAAAAABbU/zZB5RJQ2xYs/w1200-h630-p-k-no-nu/Starving_Billionaire.jpg - *In Zimbabwe, everyone is a billionaire. But billionaires are starving*