Topic: [ANN] Freicoin: demurrage crypto-currency from the Occupy movement (crowdfund) - page 16. (Read 67928 times)

You keep seeming to say that when you pass coins from one block to another you have to adjust them for demurrage.

I think that creates complications that are not needed. Demurrage can be done just in the client, the blockchain does not need to do anything about it except to grdually increase the number of coins minted per block just enough to make up for the demurrage so that once the equilibrium amount of money is in circulation the slowly increasing number of coins minted per block keeps that number in circulation.

You basically only have to change the input and output display of numbers so that the same number in the blockchain displays as a lower and lower number over time and the numbers people type in as the actual at that moment value they want to talk about refers to a larger and larger number of blockchain-representation (epochal) coins as time goes by.

Basically if at the epoch I tell a client to send you 100, the blockchain representation will be 100. A year later though if I still say to send 100, of that day's coins, then on the blockchain it will show something more like 105 or so (100 * 1/0.95).

Similarly, if the genesis block mints 50 coins as represented in blockchain-notation (epochal coins) then when someone displays that amount in ten years or so it will be displayed as some 25 or thereabouts of that day coins.

The whole complication of changing the quantities as they go from one block to another just makes it all harder by not changing the values until they move. Since the values actually change whether they move or not it is best to have the demurrage - the change of value - take place constantly simply by having it happen in the display routines. At any time anyone can thus select a date as of which to display the values and look at any transactions or balances in the blockchain in terms of the actual value they did have, do have or will have at the specified point in time.

-MarkM-

Blockchain values aren't changing.

What you propose would work, but it's more complicated. I'm sorry, but I really don't see the point.

One of us is probably misunderstanding the other.

I still don't see a need for the values used by the blackchain to change.

Only the disply and input interfaces need to adjust the numbers in accordance with whatever date+time is of interest. The blackchain can deal entirely with epochal coins. To keep the generation rate constant in terms of at moment block is made value, just apply the inverse of the demurrage rate to the number of coins generated.

That is, if the actual dcoin number/value of 50 epochal coins at some future block is 5 but that block is still meant to produce 50 that day coins, have it generate 500 epochal coins.

Eventually epochal coins will only be worth a that day satoshi each but that will be far in the future and the generation rate can still be climbing then.

For example if each block always generates 50 coins adjusted for demurrage to come out as 50 of that moment's coins in value, and coins fall in value 5% per year, eventually total quantity surviving will stabilise as the equilibrium between the minting and the demurrage. There should thus be no need to ever change how many (that day adjusted) coins are minted per block, but the number of epochal coins that many coins corresponds to will keep climbing as epoachl coins continue to fall in value.

-MarkM-

Super-big thanks to @jtimon, @galambo, and others who have replied while I was super-busy.


A demurrage currency results in lower interest rates, which benefits entrepreneurs and operators of stable businesses. Compared with other forms of currency it encourages investment in real capital and increases in productivity. It rewards sustainable enterprises and long-term thinking while punishing exploitative endeavors or shortsighted choices. With a demurrage currency cash flow, not immediate return, is king.


Thanks for the feedback; I will add a FAQ entry.

In the current implementation, all outstanding/unspent outputs decay in value slightly with each added block. For a transaction to be valid, it must include enough inputs to cover the specified outputs after accounting for decay. (Aside: this makes it possible for a transaction to ‘expire’ if it is not added to a block before its inputs have decayed to less than its outputs. We are investigating methods to transparently mitigate the consequences of this.)

If someone chose to hold the currency forever as a backing for another system, they would be free to do so. However the value of the coins they held would still decrease--even if that decrease never manifests in the block chain--because the loss would have to be realized should the coins ever be spent.

Gesell doesn't quite fit into either camp; he and his theories stand alone.

Remember: Freicoin is not a store of value. Bitcoin or gold (or whatever) can be used for that purpose. Since freicoins are only kept between transactions and in enough volume to have a cash flow buffer, the actual Freicoin market cap will be rather low. It will consist mainly of the liquid wealth that people use in day-to-day transactions, not savings.

So yes, something like 4% to 5% of the market cap per annum will go to securing the network. But the market cap will probably be orders of magnitude less than GDP of the Freicoin economy.

Currently there is a Bitcoin-like fixed subsidy that halves in value every four years, to which is added the total loss due to demurrage and transaction fees (if any). This means the generation curve looks exactly the same as Bitcoin, but the block-reward has an uniquely different profile. It'll grow exponentially until all coins are generated, although with the rate halving every four years with sharp discontinuities. Eventually it will reach an equilibrium at about 40% the original subsidy. value.

Hard to believe it takes $ 28,000 to create a few graphs based on a very bad idea. Regardless of how technically talented one might be.

What may be more interesting is that the entire community regards this as being impossible.

To those of you who are claiming what we are doing is easy or a cheap scam, think again.

Interesting.

I'm basically done with it. Here is the output of my bitcoin test client on the current block chain. This is a sum of the accumulation of all "errors" that the controller would try to remove from the current system. The vertical scale is roughly time between blocks(the units are unspecified due to filter overlap), and the horizontal scale is block number/72. This means the network would readjust once every 12 hours (72 blocks)



Positive slope means easier difficulty, negative slope means harder than current controller. Zero slope means the current controller is good. This is inverted from the graphs on sipa's website you've probably seen before.

Now I get it.

The charts were part of a design to a control system that will allow faster and more accurate adjustments of the difficulty.

So the charts were an answer to my "50000 blocks per year instead of 10 min per block"?

If bitcoin protocol is going to start tracking interest rates in terms of numbers of blocks mined its a bit more important that the network stays at a 10 minutes per block rate.

It could be positive. Remember that freicoin starts from zero.
Even if you count your gains in bitcoins...

If you buy 100 fcn at 0.01/6 btc (all of them) and sell them a year after for 95/6 btc (1/6 btc for each fcn)

the deal is nice. Why bitcoin can rise in usage (and therefore price) and freicoin can't?

Good old tried and true... what better way to promote your found interest in manipulative economics!

+1 

No, not at all. Here's how it will work:

• collect lots of $$$$$ from donations
• release the shitcoin and mine it for some time to collect lots of freicoins
• release promotional materials to create demand for freicoins
• dump freicoins and disappear

That's the wrong comparison. Freicoin value should be thought of as Bitcoin X USD (1 FC = (FC/BTC rate) X (BTC/USD rate)).
The reason for this should be obvious, but I can explain further if required (one word - psychology).

So, the right way to judge Freicoin speculation is "buy X Freicoin for Y BTC, and measure the value in BTC in a year". Is there any reason to believe that the ROI, when measured in BTC, won't be negative?

I'm curious. How this relates to freicoin or bitcoin?

Thank you.


If you buy 100 btc at 0.01$ (all of them) and sell them a year after for 100$ (1$ for each btc), you've gained a lot.
If you buy 100 fcn at 0.01$ (all of them) and sell them a year after for 95$ (1$ for each fcn), you've gained a lot too.

I don't see how the initial incentive is so much better for bitcoin.


You've probably read some other proposal on the freicoin forum.
No. Freicoin monetary supply is fixed after it has converged. In fact, more fixed than bitcoin's since it recycles lost coins through demurrage.
At convergence, the reward for the miners is equal to the total amount charged in concept of demurrage fees.

Again, freicoin is not designed to go down in value. The holder sees its funds decrease with time, but the unit itself doesn't. He just has less units.

Freicoin is just another scam to prey on stupid people. Remember that they ask for $28,000 to do a simple fork of bitcoin...