Topic: Creating a New Alt-Coin (Read 551 times)

Groan, not another altcoin

You assume population will keep growing. We are at peak energy. We are looking at a deflationary future.
See: http://www.youtube.com/watch?v=6w6gf3tSGTg


New coins will be generated until 2140. We'll be long dead by then, and the coins will likely continue to fractionate beyond 8 decimal places which will create more supply as required by inflation/defaltion. It will regulate itself based on the cost of electricity.

I'm not saying the currency will not be divisible enough for it to be viable, I'm saying that a currency that does not have a small increase in quantity every year (at least 1%) will necessarily increase in value and this is not ideal.  That's what your other quote was referring to.  Mises mentions several times in Chapter 2 of his Essay Economic Calculation in the Socialist Commonwealth that the ideal monetary unit would be a measure of value, however he goes on to say that measuring value is impossible and beyond the capacity of the human mind, but the market will choose as money that good which best approximates the Ideal monetary unit, which is a measure of value with no transaction costs.  Bitcoin has already significantly lowered transaction costs from commodity money, eliminated the threat of inflation of fiat money, however in the long run (decades from now) it will have a steadily increasing value and this is its flaw. 

It's not the quantity of Bitcoins that is the problem, it is the ratio of new coins created per year and the only way to fix this is by creating a new crypto-currency. 

I'm not saying don't invest in Bitcoin I currently am putting every dollar I save into Bitcoin, I'm just saying watch the market carefully, because Bitcoin can be improved upon.

Do you realize there are 100,000,000 Satoshi per bitcoin? That's 2.1 Quadrillion currency units?


Or that the currency is an energy credit, because you cannot get a transaction below the cost of electricity to process it?

Well I don't want to write a book, but if you want to read a bit about it I suggest Ludwig Von Mises's Economic Calculation in the Socialistic Commonwealth, it's not specifically about this subject, but in Chapter 2 he mentions several times that the ideal money would be a measure of value, although measuring value is impossible so you can only approximate the ideal.  This means the ideal money will retain approximately stable value, and if you look at the U.S. from the late 1700s to 1913, which is the period during which the world was basically a large free-market, the value of the dollar (which was pegged to gold) was stable over the long-term.  So this means the ideal money has stable value and the market chose a money that retained stable long-term value so this isn't just theorizing in a vaccuum, it has empirical evidence to support the theory.  However, the total quantity of Bitcoins will remain stable at approximately 21 million and because the economy will grow every year the only way for Bitcoins to account for this growth after there is a stable supply of Bitcoins is by an increase in the price of Bitcoins themselves.  This means that there will be significant misallocations of resources (equal to the rate of economic growth) in an economy using Bitcoin as money, and therefore it will be able to be outcompeted by a crypto-currency that retains a more stable value.  Granted, I think Bitcoin might be the best money ever created, even better than gold due to its elimination of the middleman, however, it can be improved upon and that is why I said it is not viable in the long-run.  It would be viable if there were no new crypto-coins created, but eventually a better one will emerge that will retain a more stable value and push Bitcoin out of the market.  I may be wrong, but I think Von Mises knows his stuff on the topic of money so I'm not sure that he is  .

What makes you say that?

So I'm waiting for my 5 hour time limit to pass so I can post, I have an idea for a new alt-coin based off Ludwig Von Mises's Economic Calculation in the Socialist Commonwealth.  Anyways if you are a member who creates alt-coins I will pay for you to create my coin, but I can't really contact anyone until the 5 hours and five posts are completed so maybe someone will see this before then but I doubt it.  Basically the idea for the coin is to have the ideal ratio of new coins created in relation to coins already in existence,.  It's obvious if the total quantity of a coin increased 1 million fold per year it would not be ideal.  Bitcoin's eventual stable value is not ideal either so it is not a viable long term money, it might work for a few decades, but will slowly die off after that.  It's impossible to find exactly what ratio is the best, but I think I know the general range it should be found in.  Basically, if I'm right the future of crypto-currency will be a wave of new alt-coins all trying to guess the ideal ratio and the market choosing the coin that best approximates the ideal.