I have been doing some amateur calculations and am wondering about the potential drawbacks on AUR supply limits of 16 million coins. (21 million - 5 millions burned from the drop).
The reason I am thinking this is the size of the icelandic economy and the transactions that are used in the system.
Lets say that one day that we reach the milestone where one uAUR (micro-AUR, 1/1.000.000 AUR) equals one krona. Even at this rate, a monthly salary of 500.000 icelandic Krona (isk) would be 0.5 aur. My apartment would be worth 40 AUR. The national primary treasury revenues for 2016 would be 696.000 AUR.
This is of course based on the fiction that 1 AUR equals one million Icelandic Kronas...
That is why I am wondering if the initial amount was too low. While 1 AUR equals 10 ISK, a market cap of 7 million AUR is a very low volume. I would need 4 million AUR today to buy my apartment! (remember, my bank cannot lend me AUR they do not have... no FIAT!)
Even when (not if ) we get to the situation where 1 aur equals 10.000 ISK, the volume would not allow for the state to use AUR for the national Treasury Revenues (fjárlög) even though I know that it is a rolling ation..
But... can we go lower? does the system scale downwards? would that need a code change? Can we go to Pico? Femmto? even Atto? That could solve some problems, but only when we get the exchange rate down to that level. Until then, serious monetary trading amounts are quite limited.
Or am I completely on the wrong track? please chip in, educate me