Topic: [ANN] Freicoin: demurrage crypto-currency from the Occupy movement (crowdfund) - page 13. (Read 67963 times)

http://www.indiegogo.com/freicoin

OK, time is up, 1181$ collected. So what's next?

Will you still do it or bail out with you funders money? lol

Seriously, I would like to know what your plans are.

People saving doesn't imply people hoarding. Anyway, I was referring to monetary cycles. A sudden and destructive slow down on the velocity of money. My reasoning on this is on the deflation post.

Yes, sometimes they don't. Like when people want to save.

burrrrrrrrn

Is it bad because roads serve to move wares around and capital monies sometimes don't?

Money as a road... I think this metaphor may be worse than the internet as a series of tubes or a bunch of trucks.

Yes, that's the point. You give your wares and then you want other people's products in exchange. Freicoin is only the middle man: you don't want to deal with him for long periods. It's like going from city A to city B: you don't want to stop in the middle of the road. And you can harm other drivers by doing it.

The value sent / market Cap ratio will be much higher than in bitcoin. With higher velocity a currency can conduct more trade volume with less capitalization.

hot potato! hot potato!

One thing is for sure I would spend freicoin more readily than bitcoin. I think thats the point....

I think the idea is that you can pretty much mine it at the same time as bitcoin for pretty much zero cost, so you will at least have a lot of willing sellers, hence a reason for merchants to trade in it.

It is also useful to trade for other wares that unlike bitcoin or gold, perish like freicoin. Apples, fish, labor...
Others don't perish but incur in storage costs.


We advocates and other crazy people will be enough to give it a base price. After that price, merchants don't care about the absolute price, if they must put a lot of zeros with their prices denominated in fcn so be it. Think of bit-pay and bitcoin, for example. It makes possible for merchants that don't want to have any assets denominated in bitcoin to accept them.
A currency needs users, not necessarily hoarders.
Anyway, let's see what happens. This is not going to have governmental influence so we'll be able to know if your assertion is accurate.

isn't demurrage/inflation onlyuseful because people desire to "exchange" their depreciating money for something that does not depreciate as quickly (or at all, in bitcoin's case)?

I would think that a currency like this would be impossible to bootstrap without great influence (i.e. govermental influence), especially in bitcoin's digital arena.

@maaku
Sorry about going off-topic.


I wasn't thinking on those definitions, I was just citing Gesell translated to English:
"I have denied that paper-money as we know it (without direct, material compulsion to circulate) could ever be as closely adapted to supply as a regular exchange of wares, national and international, requires".
Note that we, unlike him don't aim an elastic supply. But also note how he criticizes the current Keynesian model.

Anyway, back to your question:

Otherwise it opens the possibility for the money holder to lock the medium of exchange, refusing to spend, invest or lend it. He can enjoy an economic rent in the financial market Gesell called "the basic interest". If he doesn't get it, he hoards. And that's what happens when iterest rates go "too low". Forget central banks manipulated interest rates, I'm talking about a problem that gold-money has.
Capital yields and interest rates are directly linked. By virtue of continued investment and capital accumulation capital yields drop (economic profits tend to zero in perfect competition). But there's an artificial lower bound (the natural would be zero), the basic interest. You prefer to hold the money yourself rather than lending it at 0.1% interest, even if is inflation and risk free.
Holding money represents an insurance against uncertainty. Instead of owning real wealth that perishes or suffers storage/maintenance costs, you own an everlasting wildcard. This free insurance the hoarder does not pay for constitutes an economic rent, and must be paid somewhere else. The terrible byproduct of capital-money is a rent protection for lenders and capital owners (because the investments stop below the basic interest).
When interest go below the basic interest hoarding increases, which causes price deflation which encourages more hoarding.
The financial market gets also severely damaged by the deflationary spiral, but if the governments don't interfere, unemployment, capital destruction and lack of new investments (a war can serve too) rapidly lead to a new price equilibrium where interest rates are well above the basic interest again. The monetary cycle has ended and starts again. Messing with the monetary supply first through fractional reserve banking and then with central banks has been proven to be unsuccessful I guess we can agree. It's about velocity not quantity.

In summary:

1) Because everlasting cash-money springs economic rents
2) Because everlasting cash-money causes monetary cycles.


Yes, I do. But we disagree on what causes it. You think time preference causes interest. I think interest causes time preference.
A simple proof is that different money designs produce different interest rates. Another thought exercise would be "Why the time preference is never negative, don't we ever prefer things in the future than in the present?". The austrian concept of time preference only applies to capital-money: you don't necessarily prefer 5000 fresh oranges today over a fresh new orange for the next 5000 days.
But the point you're making is that growth caused deflation isn't bad. I agree, that's why Freicoin has a fixed monetary base. More fixed than bitcoin's by the way.


Freicoin is not inflationary. If you mean that people would prefer a better yield than -4%...I say more, they will prefer 0% or more. But this medium of exchange is not for saving. If you want to save with it you must lend.
I don't see how the last adopter gets beenfited.

...it would be hard for freicoin to have much value if everyone who got some realized they could grow their freicoin wealth by selling, buying anything inflating at less than the freicoin rate, and just waiting. This scenario benefits the last adopter most.

It is most definitely a weakness. It makes perpetuating an attack on the security of the network trivial. It also means that if any one of the networks based off of bitcoin is attacked, they can all be.


While devising a new security system would be difficult (although I suggest you take a long look into the idea of a weighted block chain that I briefly talk about here: https://bitcointalksearch.org/topic/new-musings-for-a-stable-currency-64637), the account ledger really would not be that much effort. But if you'd rather not make any steps forward in crypto-currency technology, that is your unfortunate prerogative.

That is hardly a weakness--it is exactly where the security of bitcoin comes from!

But regardless, although this is an interesting and valuable discussion, it should be held in a separate thread; we have wandered significantly off-topic. Freicoin is and will always be a proposal within the framework of bitcoin-like systems.

Having a paper backup does not make your money less secure. Paper, electronic, and brain wallets all work together to provide the ultimate security. The only thing I don't like about paper wallets is the current single address. There isn't a good way to encrypt them to prevent theft. Paper wallets will greatly benefit from multisig.

You say it's not archaic, then go on to say this is the way it has been done for all history. 


I'm not saying it's bad because it uses energy, I'm saying it's bad because it's not secure (he who controls the hardware and/or money controls the money) and it only encourages wastefulness when it is not absolutely necessary. Every tx fee or every amount of demurrage is going to have to be paid for again and again and again. But getting around that is more complicated than switching to an account ledger, I think.

Thanks, Etiase

Using energy to secure the network isn't bitcoin's archaism. Using energy to secure the financial system is a condition that has existed for all of human history. The question: how much energy?

I think Bitcoin uses a lot less energy than any other possible solution. We're trying to trying our hardest to turn the economy from a horse and buggy to a Carnot cycle. Anybody with notions that the Bitcoin method of securing the blockchain is not "sustainable" or "green" has not considered how much energy is spent in just one day of a War. What are we not trying to do? We are NOT trying to create a perpetual motion machine.