Topic: Freicoin: bitcoin with demurrage - page 6. (Read 31339 times)

OK, so the profitability goes up and down as people go in and out. But what is the average profitability once you smoothe out the swings?

The original point made was that the average profit will tend toward zero.

If the average profit is above zero it must mean someone else is bearing the costs, like, your network provider.

Until costs exceed returns, then some people will get out of the game, difficulty goes back down, and it's once again more profitable. Are we talking past each other?

if the profit is the same, as you imply, then people will try to get in on the game - competition - which forces prices down.

That transaction fees do not converge toward zero.

which changes what exactly?

Except as mining becomes less profitable, less people will want to do it, which will lower the difficulty, which will make it more profitable.

Absolutely correct, IMO. Classic externalization of costs.

I understand that you don't believe people would use it. Let me put it this way.
If you have both currencies, what of the two would you spend first?
Obviously you should spend the one that loses value first.
But why did you accept the money with demurrage in the first place?
Maybe your client can't offer (or doesn't want) you the one without it.
But why he did accept it?
Fiat money can be accepted for various reasons. A government can force you to pay taxes with it and to accept it for clearing debts.
An agreement within a community can be enough like in LETS. You can even trust money "printed" by your friends with Ripple.
But the agreement doesn't have to be based on the commons. You can accept it because is good for YOU.
Bitcoin is accepted because it has qualities that make it better than national currencies.
I claim that a bitcoin-like currency with demurrage has qualities that make it better than bitcoin.
Not for the owner, but FOR THE USER.
Here Gesell can tell you the advantages of free-money (money with demurrage) for different types of money users:

http://wikilivres.info/wiki/The_Natural_Economic_Order#Part_IV._Free-Money.2C_or_Money_As_It_Should_Be

Note that it includes the saver.
I recommend you reading the full text.
Unlike him, I don't want the free-money to be issued by any government. Not after reading David D. Friedman's "The Machinery of Freedom". Unlike Friedman, I don't want metals to be money.
Like many of you, I buy bitcoins with fiat national currency.
Like probably some of you, I buy silver with fiat national currency too.
I'm not advocating to save in a currency that loses nominal value. I just want to use it as a medium of exchange. You can always buy deflationary bitcoins or Precious metals if you want to save.

Because I'm hungry.


Time preference.


It neither encourages nor discourages, in any significant way.

As far as I can tell there's nothing "hard" being proposed to force people to use demurrage? Perhaps that's why it's worked with local currencies - social pressures can enforce compliance in a small community where in a large one - let alone one where identity is as ephemeral as it is here - they no longer function quite so well. I just don't think it will work at this scale. You'll have to develop a practical implementation to convince me it can compete with a currency not encumbered with demurrage.

I don't think it would be higher, even once the mining has stopped. Deflation is caused by money loss or destruction, so with reasonable wallet security, I doubt much would be lost per year, except through rounding errors.

And the point is, everything is a decision on preferences. Human beings are rather impulsive, by nature, so if you see a candy bar at the checkout, you're not too likely to think, "If I wait, I'll get a few extra satoshis back when I buy that." No, I'd say it would be more along the lines of:

 "Ooh! candy bar!" *tosses candy bar on counter*

It's called prostitution .

Ok, sex is priceless  too
That's not the point neither.

No, human beings don't like to just "survive". They like to thrive, have sex, etc.

None of us would stop paying for food, clothes, housing, internet...
But you won't die if you don't buy a car, a tv, a new GPU...
Yes survival is priceless. That's not the point.


0.0001*365 = 0.0365% anual deflation
I think we could live with that. It is very very low.

 

Human beings, with few exceptions, are not monks. We like sex, romantic partners, games, gambling and all sort of stuff.

You see, we don't horde money for the sake of hording money and getting rich, we horde them for the good stuff in life.

Would it make sense to wait for 50 years before purchasing sex, games, and gambling? Heck no. We like them, now, all things being equal.

If I can get a 3DHDTV next year, why buy the standard HD now?

Because I want one.

Every decision is an economic choice between two options. You simply have to decide what you want more, the TV, or the extra .0001 BTC by keeping for a few days.

Well, of course you would expend the necessary to survive, but nothing else.


I'll tell you why the worgl experiment was successful during the great depression until the currency was prohibited by the central bank.
Of course sellers did prefer the traditional currency over the one with demurrage.
But no one wanted to buy anything to them for traditional money. Was their choice to sell in exchange for the currency with demurrage or not to sell. They choose to trade.
There are examples of currencies with demurrage being used today.
Here's one:

http://en.wikipedia.org/wiki/Chiemgauer

And here are some more:

http://en.wikipedia.org/wiki/Demurrage_(currency)#Current_examples
  
I think there has too be more, today and through the history.
They don't appear in the media.

Even assuming you are willing to put off buying food til later, eventually your hunger will outweigh the pressure to save. Or you'll die, and unless you've provided for them in a will, your bitcoins get lost, improving the value of our bitcoins. We thank you for your sacrifice.