Topic: Beware: Freicoin users taking over for pump & dump (Read 4564 times)

I tend to agree that the grant system makes some sense given the barriers they otherwise face in getting people to actually use the coins.  But the grant system kind of makes using bitcoin a strange choice.  The usability issues in bitcoin are largely due to requirements imposed by being decentralised (e.g. waiting for confirmations, when a centralised system can immediately confirm).  By having a large number of coins centrally controlled there's no way some of the main benefits of decentralisation can be achieved - everyone HAS to trust the body controlling those coins.  So that body may as well be an issuing authority as well.  But I guess miners etc aren't willing to pay fiat to buy coins from a central body - but will happily pay fiat for electricity and hardware to mine them for 'free' whilst a central body owns and controls a large chunk of extant coins without having 'paid' for them.

I do agree that we'll likely see thousands of different BTC-type block-chains for all manner of purposes.  Well - we may not actually SEE them - as a lot will be for specific purposes only of interest to a very small group of people who want to track some specific right/ownership/entitlement in a semi-anonymous way without a central point of failure.

You are 100% correct, they have a huge challenge in finding a use case.

Honestly this is one reason I'm defending their decision to distribute a large number of coins through a grant system. I can think of several uses like rewards-points that work if you have a large initial supply to give out promotionally, and if they are never used the value will slowly seep back in. One key to long term success will be to either have the project mine themselves, or cater in some way to the mining community to get the mining proceeds back into the non-mining community.

It's the same problem as coinage in England during the Industrial Revolution. Coins flowed to London and stayed there, and the country as a whole was suffering a lack of small change that resulted in private local currencies that pick up the slack. Currencies are mostly local in some way, I think FRC and other bitcoin forks are going to get drawn to a locality (either physical or online community type) or more and more localities will create their own cryptocurrancies. I don't think we are going to see a few BTC clones, I think we are going to see thousands of coins/notes/certificates/coupons/shares of every description.

What puzzles me is how freicoin is ever expected to take off and gain a wide user-base.

It's intentionally designed to discourage hoarding/saving.  But it's not as though there aren't other currencies which can be used to hoard/save.  So it won't discourage hoarding/saving - it'll just force people to use a different currency (e.g. BTC) to do their hoarding/saving in.

Of itself that's not a problem - except WHAT is meant to encourage people to then convert back to FC to actually trade?

Is it cheaper to use for trading?  Not very likely if you have to convert to and from it before and after trading.

Is it easier to use for trading?  Doesn't seem likely - as it's pretty much (correct me if I'm wrong) based on BTC, so isn't going to be offering any great usabaility benefits.  And it has an inherent disadvantage when it comes to ease of use - that if you want to buy something for 1000 FC you need to actually acquire slightly over 1000 FC.

Are there some really great things than can ONLY be bought with FC?  Not that I've noticed.

So it seems to be that for the majority of people there's just going to be no incentive to ever use FC for transacting - and a big disincentive to use it for saving.  What other use does it have?

It may be good for miners - until they find noone else uses it so they can't sell it.  And true-believers will obviously stick with it to the bitter end.  But that's likely not enough big enough base to build a thriving currency on long-term.

The only scenario in which I can see it doing well is if it manages to steadily gain in price vs BTC (through speculation(.  And at that point it's failed as an experiment anyway - as it's turned into a good store of value and the whole demurrage experiment has failed to deliver its stated objective.

IF FC were the ONLY viable crypto-currency then maybe it could work - but with non-demurrage alternatives available it just hasn't got any way to make people spend rather than save.  All it can do is force people not to use it (save in BTC or whatever) - and condemn itself to a slow death.  If the only people with FC are ones who want to spend their FC (the ones who don't want to spend not using it) then there's noone buying them.  If there weren't alternatives then some people would have to accept the price of demurrage to save - but as there ARE alternatives those people will just use the alternatives, leaving noone who wants to accept FC as they have noone they can reliably pass it on to (or echange it to fiat/BTC with to pay bills that can't be paid in FC).

http://www.thefreedictionary.com/cronies

So they give them to friends, what's wrong with that? I've been assuming that you are attempting to hang the typical negative connotation on that word, but if I remove my preconception your description sounds pretty good.

Are you trying to get them to setup a "greenfield" social network of freicoin users instead of chasing a community with a common interest?

If they give all the coins to their friends, and then they pump/dump they are screwing their friends.

So which is it? Are they doing a pump/dump (where they should gather in as many non-cronies as possible to dupe) or are they conspiring to keep their marbles to themselves? If it really is the latter, why do you care?

Also, what do you think is the "right" way to distribute coins?

I'm not.

I'm saying that they are cronies and as such give em to other cronies.

I see, you are implying that the folks that get the FRC from the foundation will be holding the coins until they evaporate? You are getting too far ahead of reality, there is no sign that the foundation will be interested in giving coins to folks that just hold the coins as they evaporate, they could require 100% disbursement within a 1 year timeframe of granting and your "over a decade" would be dead wrong. There are a number of scenarios that allow the foundation to do it's job and close down (or revert to a booster club) in less than 5 years.

You don't know for sure how long the coins will be out there, and who will hold them. Even claiming that there will be an effect of "over a decade" is a bit specious given the desire for very high liquidity for the coinbase.

L8er H8er

Are you?
Three years is the amount of time the foundation subsidy gonna accumulate. The half-life of the accumulated amount is significantly longer than that.

Actually the only thing that really needs to be established beforehand is a percentage. The one necessary to form a ruling consensus.
I think I gonna go for the golden ratio of the total hashing power.  

WTF? 3 years!!!!! not "over a decade"

We covered this yesterday.

Are you purposefully spreading misinformation?

I only asked you not to be insulting, you can be as wrong as you like. I love a good spirited debate, but not a debate with someone who has had too many good spirits.

So your governance model is "let the community vote on every little thing?" That's nice for you, let me know how that goes. Hopefully it will only take a couple years to get a basic outline together, and another couple to build a consensus.

You have still managed to avoid most of my questions, one I really am interested in your answer on is "Why does money need to store value over the long term?"

I'm actually kind of amazed that you will abuse folks like this and then talk about community. At this rate, you are not going to have a lot of friends left by the time you get anything accomplished.

I'll check back in tomorrow to see if there is an interesting conversation in this thread, but I'm not holding my breath.

Happy New Year!

You seem to be under the impression that we do not understand exponential decay. Of course the currency will never go away. But that's also the reason why the freicoin foundation subsidy is such a bad idea.
They (or the people who were sponsored by them) would be in control of the majority of the currency for a long time (over a decade).

If FRC were implemented without any unnecessary centralization there wouldn't be that much opposition, and certainly not from me.

This is your opinion and you can vote with your feet (or coins) by staying away and not accepting FRC for transactions. Please be certain, I'm not calling your judgement on this into question, or your right to form your own opinion. I'm mostly in interested observer mode myself with a medium sized stake of early coins that will take a long time to evaporate.

Calling it a scam is a bit early I think, so far the actions of the developers have been above board, and I read maaku as a "True Believer" which means that we should see him crack before he breaks (IMHO, based personal experience with the type.) In fact we are likely to see him ride it into the ground and for a year or 2 after that if it fails.

The other thing to realize is that the coins don't go away. No outputs are ever removed from circulation. Instead the prorate demurrage is applied (at 4.89% per year) based on the blockheight of the current and last transaction. This means that if I hold FRC for a day I lose ~.01337% (FYI, I used continual compounding, I think the 1337 is a coincidence not by design) or 0.1337 FRC per 1000 FRC. Even after a year I've lost less than 50 FRC/1000. So not exactly a drastic threat if you hold some FRC for a bit.

What it all comes down to is the same phrase we use about Bitcoin all the time "it has no inherent value," it requires a user base to build the value based upon how the user base wants/needs to use the currency.

Simran you seem to be under the impression that monetary base will shrink and eventually disappear completely, this is incorrect.   Under Freicioin protocol monetary base is entirely stable after the initial issuance is complete (~3 years).  From that point on system wide demurrage will be exactly offset by newly mined coins resulting in no change in the total coin base.

But it sure beats a hardcoded amount.
You cannot tell if it is optimal until it is tried out. The system I envision has a solution to that too, and if you pay attention to my posts you would already know what it is.

And I already pointed out too you on our forums that having Miners vote on demurrage would not work because the equilibrium reached would not be a reflection to the liquidity premium, all it would show is the degree to which miners are able to sell their coins to other and then fleece them back again with an excessive demurrage rate.  Sure you reach some kind of Nash Equilibrium when ever two opposing motivations compete but that doesn't mean its the socially optimum, and as your empowering only one group to vote it's naively obvious that the non-miners get shafted.

I've thought about this extensively and the solution is not remotely simple, I never found a solution that satisfied me but I believe markets may be part of it, but only if they are structured to actually find the liquidity premium which involves solving the Fisher equation.  I advised you to read our extensive discussion about demurrage which show our thought processes, we categorically rejected any centralized system of macro-economic management equivalent to a FED reserve board.

You do not seem to have done the requested reading or even responded to my rebuttal on our forums.

The only thing that has to be agreed upon is to work together. If you do not understand that it's really better you put me on ignore.
Please do, again you are not "invited" anyway.

Ignoring does nothing, their post is still there, and it shows if you actually have the balls to prove the other person wrong.

You are either willfully ignoring, or missing my point completely.

You are creating a set of terms and conditions for any coin that you create.

You may use a mechanism to create those terms that includes community feedback and voting, but that in ITSELF is an arbitrary decision setting the terms of making other decisions.

Either you have very little experience with project governance, are putting me on, or are just trolling. Either way I'm about done putting up with it, please stop insulting me if you want to have a discussion, but please do keep it up if you want to be ignored by yet another member of the forum.

There will always be terms, but to be frank, your terms on FRC is just ridiculous. Can't wait to see it die as it's not gonna last anything since coins will expire. It's a coin with no value, so sellers will end up losing money and leaving buyers on the winning side. This is just a scam. What it really is a scam bomb ticking and ticking and will explode once all the coins expire.

It's possible but I wouldn't do that here, I want to stay as far away from idiots like you as conveniently possible. I intend to be self-sufficient even before you know of it's existence.

That's why satoshi released bitcoin in such an obscure location, and it almost worked out...