Topic: Freicoin ? (Read 2927 times)

And transaction fees are really the main protection against DoS attacks.
Although lower in freicoin than in bitcoin, miners should ask for tx fees to include transactions. Not necessarily in all of them, at least on the last one following a chain of dependent tx (Mike Hearn has talked several times about this last thing).

Indeed, I was thinking of that subject recently, we effectively need a way to 'merge' just as we have a 'fork' process.  When it comes to code this is simple but once you have a living decentralized block-chain it becomes very hard even if the communities around each chain wish to conduct a merger.

My thought is that because most wallet addresses are in the same format the existing members of one chain all get sent a sum proportional to their old-chain balances to their old-chain addresses in the new chain.  As they would all still have their private keys they would immediately be enfranchised en-mass in the new chain.  Though this dose nothing to actually retire the old chain it kind of maintains it economy.

What ever the technical answer is the far greater difficulty is social, their is a lot of hostility between BTC and the alt-coins.  Getting rid of these attitudes is really going to be the key to successfully ending coins without uncontrolled collapses.

Correct, although the provides only a minimum. There will still be transaction fees, same as bitcoin.

Good point. In a way, in freicoin the mining reward is much more predictable than in bitcoin. E.g. in freicoin the total amount of transaction cost per 100k FRC per year is 5k FRC, regardless of the times it got transacted (correct!?). Instead in bitcoin, the only thing we can measure is something like an average cost per transaction. Then the total cost of transaction per year should increase monotonically with the number of transactions. Thus money hubs, which have huge transaction volumes in and out per day, benefit by using freicoin.

However, I assume if velocity increases it is likely that the market capitalization decreases, and thus the mining rewards reflects less purchasing power. But the relationship between GDP, velocity and market capitalization may be non-trivial.

I agree. Currently POS should be considered highly experimental anyway. As indicated in another thread - there are still unsolved problems with POS mining (stake mining vulnerability).

+1

This reminds me that we still need good proposals for a controlled demolition of coins. Currently they are all PONZI-like. Last ones pay the bill if a coin gets abandoned.

Which goes up with velocity. The real take away here is that there isn't or we haven't found a simple metric by which these properties are related. We have good reason to believe that the monetary velocity, freicoin price, mining subsidy, etc. will all be stable under demurrage approximately equal to basic interest. But we don't have predictive models that will tell us exactly what the point of stability will be.

Sure ... on enough tx volume. 

http://blockchain.info/charts/cost-per-transaction-percent

Costs (fees + subsidies) are currently ~1.7% of tx volume.  Granted 1.7% is pretty high but it was roughly 7% per year.  If tx volume keeps growing it is certainly possible for the network to be much much larger (i.e. hundreds of Exahashes/s) and costs as a % of annual tx volume to be a very low %.

We've discussed this on the Freicoin forum and I see zero utility for PoS mining, which effectively makes the security of the system PoS -or- PoW, whereas other proof-of-stake proposals would have additive security.

In the future we plan to pursue (as a one-off test coin) a combination of Meni Rosenfeld's proof-of-stake proposal and a demurrage coin, which we believe would strangely enough result in a bicameral, parliamentary-like system proof-of-stake/proof-of-work voting on demurrage budgets. If the test works, this could be something integrated into Freicoin in a hard-fork.

However @Impaler's main point stands. In Wörgl the velocity of money was observed to be 50x higher than the rest of Austria, meaning that with unconstrained currency markets the Wörgl banknote would have traded at 0.02 the equivalent Austrian note. 5% of the monetary base sounds like a lot... but that could end up being 5% of a 50x smaller pie. Would Bitcoin mining be profitable if the subsidy were only 0.1%?

Note that 5% of monetary base may be a far smaller percentage of GDP if monetary velocity is >1, it is our hope that velocity will be substantially higher then 1 and as a result the cost of demurrage will in fact be around 1-2%.  Each coin only needs to be transacted (a real purchase not just a wallet shuffle) once every 73 days to give a 1% cost in terms of GDP.

We have discussed Proof of Stake and I've been an advocate of anything that can add additional layers of security to a coin, but only if its an additional layer and not a replacement for existing security as was the goal of PPC, also it can not follow their proportional-to-current-balance distribution model because this would be counteracting the demurrage, this was one of the key reasons Freicoin couldn't incorporate anything from PPC.

I don't think any of the coins in existence today are "THE ULTIMATE" coin, they are all experiments and alphas and betas to a degree, but all the coins that are coded and tried in good faith will ultimately contribute to said ultimate coin.

On a technical note, a feature (problem?) with freicoin seems to be that the mining is financially supported by the demurrage instead of voluntary fees. What that means is that the mining revenues won't fall below 5%/year of the total money supply per year and this sets a "minimum revenue bar" for miners. However, that also means that if the coin is successful and 5% is an inflated price mark and not necessary for network security, the economy will likely "pay too much" towards the mining industry.
However, since all industries strive towards slim profit margins, that means that there will be a real physical expense proportional to 5% of the market capitalization per year, and this has to do with the POW being the underlying security model.

That said, I like the concept that 100% of the fees go back into circulation. Also the demurrage effect means that any dead coin has a half-life and is slowly finding its way back into the economy. This makes the money supply much more predictive than e.g. in ppcoin or even bitcoin.

Overall the coin shows some improvements. I think a hybrid between freicoin and ppcoin would be the next logical step: One could employ an overall demurrage to support the POS mining, instead of destructive fees. Since this kind of earning is built into the money system itself, I don't see a problem with fairness, since all money holders have access towards POS earnings. However, before that, ppcoin has to show that a solid POS concept is possible.

I wouldn't say I'm a fanboy - just interested to see how it pans out

For one you would have to issue some sort of fungable unit that I can use to trade with others, locking my money away is not why I would be using FRC. You would also have to agree to cash out me, or any of my friends or their friends (etc) at a prorated amount at any time. This does not even get into the macro/micro issue, your scenario is an invalid comparison on the face of it, otherwise it would not be a reasonably good joke.

So how exactly is FRC different than this "experiment" you reference?

No, if you simply hold the coins that does not simulate demurrage. Not unless your coins were also subject to demurrage as well, and everybody else's too. The positive effects of demurrage are observed at the macroeconomic scale. One person providing negative-interest loans is a very different (and useless) experiment.

+1 LOL this.

Goes to show how flawed the concept of FRC is. I want in on this if you FRC fanboys truly believe in the concept of FRC.

I can simulate FRC for you.  Give me x BTC and in a year (or whenever you want) I will give you some of them back (95% back for period of 1 year, prorated for shorter periods).
Hell I won't even keep the 5%, I will just send it to the miners as a tx fee.

and developers eating that tax..

Unfortunately it differentiates itself by having a tax applied to it.

Everything around us was at some stage an idea that seemed ridiculous at first.

Personally, I'm fascinated to see how FRC goes (it certainly differentiates itself from the other coins).

Sounds like freak coin, but who am I to judge?

Correct. Pass on Federal Reserve Coin.