Topic: 2012-06-27 newscientist.com - Freicoin: Occupy's online currency for the 99 per (Read 2473 times)

This is a very good point. It's one more thing that does differentiate cryptocurrencies from regular money.

My point is that the "flow speed" should not be set by the monetary system but by the will of the people deciding freely whether they want to spend or save their money.

Consumerism, encouraged by demurrage, is unfair to the next generation because it goes against sustainable development.

Exchanging one decentralized digital currency for another is inherently cheaper than with physical/centralized currencies, and with a lower barrier of entry to service providers. What's more, there are protocol features that could allow atomic exchanges without any middleman. I don't see a problem with multiple decentralized digital currencies being employed for different purposes.

For the ASIC/PoW/PoS discussion I can only say that it's completely evident that at least the first round of ASIC's are going to be distributed in an extremely decentralized way. BFL has chosen a strategy in both distribution and pricing which is on the verge of giving rebirth to the whole mining boom. I know literally *so many* people who have ordered BFL hardware recently, even I ordered some even though I've basically quit mining. So much for quitting.

It makes little sense for ASIC manufacturers to do any different. Bitcoin users wouldn't react well to someone having the direct power to disrupt the network. Selling and distributing the chips to a wide audience is a good way to go. With ASIC entering the market we're basically leaving behind the era where botnets can do something to Bitcoin. That's soon history. Bitcoin is about to become safer than ever.

My personal preference is strongly on the PoW camp. I would not consider PoS based solutions unless it's proven that a PoW cryptocurrency is simply not viable. So far it seems very viable. It's the most fair system I can imagine. It's not an impossible nut to crack, but it is an expensive nut to crack and the expense scales up fairly well with the market cap / usage of the currency.

There is a challenge in the future which is keeping mining profitable enough to secure the network with low or insignificant block rewards. Transaction fees have to come into play more seriously. I believe that this approach will work and I believe the fees will be very competitive to any other currency systems even if the fees are increased in the future.

Also it's important to take into account that there is actually not that much tx activity yet besides SatoshiDice, it's still very marginal. Even with a 0.0005 tx fee the miners would get a good amount of reward if we actually had a significant amount of transactions. Right now, with the tx amounts we have, and the block reward we have, tx fees don't play a significant part. But that will change.

Freicoin seems like a horrible concept. While reading Schlichters book Paper Money Collapse, I'm actually becoming more confident that Bitcoin might just succeed in what basically no other currency has succeeded in modern times, it has a chance (how big of a chance, we can argue) to become a universal currency. Freicoin has no chance in hell because such currencies are generally not valued in a free market, with the exception of widely accepted state enforced currencies.

Currency competition, I realized, is actually bad. A system of multiple currencies is always suboptimal, it's a situation where we simply can't agree on an universal currency and we must exchange between different currencies. What all the exchanging is in the end is a business, a middle man that is not needed. Bitcoin has a shot at becoming a universal currency because it has strong features as a medium of exchange and strong features as a store of value.

If we unleash a free market of currencies there will of course be competition at first. More competition than we have now. But throughout history it's evident that societies will eventually use basically just one currency because it's better for money to be as universal as possible. I also argue that it's better for money to be as inflexible as it possible can, although flexibility in terms of being able to split it into smaller pieces is important.

I'm just putting this out there: Bitcoin is not only crushing these alternatives like flies, within 10 years it might be crushing the big brother alternatives like flies as well.

This is what I love about Bitcoin.  It benefits the rich & poor. 

And what is worse, Freicoin doesn't even benefit the poor.  In a system like this, the smartest idea would be to spread your wealth into as many accounts as possible.  If that is done, you will never lose a dime because you will be given back what has been taken.  But if you don't do that, you will lose out on a percentage of wealth that was taken from you.  Therefore the smartest will be the richest (which I would argue is already the case) & the dumbest will get poorer & poorer until they have nothing left.

No matter how you dice it or try to redistribute the wealth, the most intelligent will be the richest.  Bitcoin is the only currency that treats both equally giving the poor a better chance than all other currency.

"We" are all quite different. You might want BTC as a store of value which Freicoin just isn't. I would love to have an anonymous fast flowing digital cash as I don't like the concept of storing value for generations to come. That's inherently unfair. Demurrage would increase the flow speed.

I guess the makers of Freicoin would prefer to have more demurrage (30%) but their problem is what I described above: In an anonymous currency, demurrage can only be realized via the miners. I'm sure they would prefer to give the demurrage to the state or better to every human being on earth (basic income).

Maybe so, but they have an interest in the well-being of Bitcoin. This is true now with the supposed concentration in early adopters, and will remain true in the future - the only ones with a limited ability to mess up a PoS system are those with the least incentive to do so.

We don't know anything about miners other than their Bitcoin address and maybe IP address (which can be concealed with a proxy).

And, whatever you can know in a pure PoW system, you can know in a PoS system. In cunicula's method stakeholders are also miners, and they broadcast blocks just like in PoW. In my method, miners and stakeholders are separate, but stakeholders broadcast signatures just like miners broadcast blocks.

How well did you study the particular PoS proposals that you are criticizing?


If there is a move to PoS (or a different hash function for that matter), it will be gradual so as to not antagonize hashholders.

Freicoin would probably work if it was the only medium of exchange and representation of value.
In this condition large hoarders would be forced to mine instead of just sitting on their capital.
I don't know if more miners is good or bad, depends on who controls the mining HW market.

But since it's not the only currency out there people would be more inclined to convert freicoins into something more stable.
Of course if somehow conversion or exchange of freicoins is made hard or cumbersome then it might develop into economy of its own.

I'm not sure that 51% of the current BTC are not already in the control of just a few people. There is no way to know. At least in a PoW if there is a 51% attack, you'll know which miners are sending altered block chains and they can be isolated.

This isn't the first time we hear about Freicoin, of course. It can be traced as early as Feb 2011, though I haven't heard about it until April that year.

I don't believe in PoS either, or at least, not in that thing which you call PoS and has all these awful problems. Since getting 51% of all bitcoins is harder than getting 51% of all hashrate, it will be harder to perform an attack in any of the proposed PoS systems than in a pure PoW system. Not to mention they have some resilience even for 51% of bitcoins by one party.

"NASA Engineers", if the definition = an app developer with no degree listed under education, another app developer with a 2009 Society of Jesus physics degree  + two years as an app developer.

If only they could pay for more developers developers developers!?

Anyway,
As soon as it goes online, Im gonna mine the shit out of it, so I CAN BE THE KING OF COIN
MUAHAHAHAHAHAARRRR!

Also discussed here, OP by the Freicoin creator: https://bitcointalksearch.org/topic/ann-freicoin-demurrage-crypto-currency-from-the-occupy-movement-crowdfund-89843

I love they call it "frei" = "free", when it's less free than bitcoin.

People are always enslaved using such nice words.

Demurrage is a naive way to create artificial velocity by twisting the arm of the unfortunate freicoin holders..

Artificial monetary velocity serves only consumerism. It's as if freicoin advocates would like to hang on forever to the suboptimal elastic money concept.

Arm twisting and arbitrary constraints (why 4.4% demurrage rate why not 10% or 5% ?) are precisely what we are trying to get rid of thanks to bitcoin.

I wouldn't worry too much about that. If 51% of all BTC are in the hands of some asshole, I wouldn't want to hold BTC anyway. Why not swap them for Namecoin or whatever fork there is.
No matter how much money you have, it will be hard to buy 51% as there are no 51% for sale.
There are examples how it is cheaper to buy hardware for a 51% attack than BTC. With BFL pushing the speed by magnitudes right now it is even cheaper than last year, which is a dramatic draw back in my eyes. We can only hope that the massive orders they got were not from some evil institution.

Here we go again. Demurrage is basically printing bail out money for the miners who will be like the big banks under this model. PoS will ensure that a 51% monopoly will form to conspire to block transactions from people they don't like. You might as well call this the King's Coin.

Oh, don't be that sure. For me, PoS is a pretty logic thing to do and apart from people that invested a lot of money in mining hardware (BFL for example), the average user of bitcoin would profit a lot from PoS. Demurrage would be 100% contrary to why many of the people use bitcoin in the first place and would worsen the problems PoS would fix (too much money burned in mining).

Did this guy talks to only yes-men when he started his project?