It strikes me as being exactly the sort of thing you saw in industrial economies on strict gold standards before central banks. When you have an expanding pool of goods and services (either via industrial expansion, or the market for a type of money increasing) being chased by a money supply that is growing significantly slower, money deflates rapidly, and some people decide to hold onto their money rather than spend it as they think it will increase in value. This effectively shrinks the money pool, making the effect even stronger. Then the speculators come in, and it gets hairy and unpredictable. Eventually the money value collapses, and it starts being used for currency again.
You should EXPECT massive booms and crashes as a new currency with a fixed rate of expansion grows in use (or in speculation-attractiveness) faster than its supply does.
It strikes me as being exactly the sort of thing you saw in industrial economies on strict gold standards before central banks. When you have an expanding pool of goods and services (either via industrial expansion, or the market for a type of money increasing) being chased by a money supply that is growing significantly slower, money deflates rapidly, and some people decide to hold onto their money rather than spend it as they think it will increase in value. This effectively shrinks the money pool, making the effect even stronger. Then the speculators come in, and it gets hairy and unpredictable. Eventually the money value collapses, and it starts being used for currency again.
You should EXPECT massive booms and crashes as a new currency with a fixed rate of expansion grows in use (or in speculation-attractiveness) faster than its supply does.