Maintaining the Value of the Qbit

The QFed constantly monitors the Qbit supply and demand. It develops software that enables the system to always keep the supply of Qbits equal to the demand for Qbits. The system does this using the Qbit Value Formula.

The Qbit Value Formula

The Qbit system uses a specific formula to monitor the buying power of the Qbit at all times. This formula, called the Qbit Value Formula, assess the Qbit’s buying power by evaluating a collection or “basket” of commodities that are available worldwide. On a regular basis, the Qbit system compares the value of the basket to an index value. If the basket’s value rises, it circulates more Qbits. If the basket’s value falls, it decreases the supply of Qbits until it returns to the index value. This keeps the supply of Qbits evenly matched with the demand at all times. 

Basket Contents

The commodity basket that the Qbit Value formula uses are selected in such a way as to provide the QFed with an accurate picture of what the Qbit is doing at any given moment in the market. The basket of commodities is a collection of purchasable items that fulfill the following criteria.

Note: These criteria were proposed by Thomas H. Greco, Jr. in his work, Money and Debt Part 3

Regulating Qbit Supply

The Qbit system regulates the supply of Qbits in circulation using a special token that is built into the system. This token is the Qgerand. Only the Qbit system can produce Qgerands. Qgerands are non-transferrable. That is, once they have been sold, the only things the owner can do with them are to stake them or to sell them back to the Qbit system.

If there are too many Qbits circulating, the system is experiencing inflation. To counteract inflation, the Qbit system offers Qgerands for sale.

When the Qbit system sells Qgerands, it receives Qbits in exchange for them. The Qbit system puts these Qbits into escrow. This decreases the number of Qbits in circulation and restores the value of the Qbit.

According to its own rules, the Qbit system cannot use the Qbits in escrow for anything else. All monies received from the sale of Qgerands must go into escrow and stay there until the Qbit system determines that the market has become deflationary.

When the demand for Qbits increases to the point where too few Qbits are in circulation, prices start to drop. This is deflation. When deflation occurs, the Qbit system disburses some of the Qbits it holds in escrow to everyone who has Qgerands. This provides people with a fair and distributed way to receive money when the economy is experiencing deflation.

The mechanism for disbursing Qbits to everyone who holds Qgerands is built into the Qbit system. For example, the Qbit system can perform a transaction that sends 10 Qbits to the wallet of every Qgerand owner for each Qgerand that they own. Qgerand owners receive their Qbits automatically when they next connect to the Qbit system on the Internet. 

For users of Qbits, owning Qgerands is an investment. Qgerand owners can also stake their Qgerands and earn a return.

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