Topic: GEM - as a potential stable value currency - page 2. (Read 6299 times)

You said yourself that, just like bitcoin, there will be few nodes eventually. "The people" have to place implicit trust in the trusted nodes because there is simply no way they would be able to keep up. It doesn't matter if they know about it or not, because by the time something like this might happen (via huge popularity and government intervention), they won't have a choice anymore as Bitcoin/GEM visa has control of the network.


In Bitcoin, everyone is forced to accept transactions because the people are validating those transactions. It is unlikely that Bitcoin visa would ever be able to outclass the people in this respect. They could, however, start refusing blocks with undesirable transactions (or government-mandated illegal), forcing people to start blocking those undesirable transactions as well.


Publicly accused, privately continuing to take it in the ass because the people have no choice if they want to use the value that they own.


So is designing a system that asks for the government/banks to step in and control the network.


Where was encoin block chain based?


You are giving control, intentionally, to GEM visa. The people don't have a choice. Want to spend your GEMcoins? Do what I say or your coins are worthless. In Encoin, everyone who wishes to monitor the network can do so, AND they have a voice in the network. The goliath has no hope of outclassing the many davids. And even if the goliath did have a hope of outclassing the davids, each client will see which network is true and refuse to do business with the other automatically. No message board rant required. No public outcry necessary. No government or corporation can influence it. It is controlled by the people. The way I think it should be. The governments and corporations need to comply with OUR network or gtfo. If you leave it wide open to be regulated, it will be.


99%, lol. Ask 100 Americans who the US Secretary of the Treasury is. How many do you think will get it right? I'm quite sure it will be less than 99. So while you believe the 99% will be paying attention to the public outcry on a message board, the reality is it will be far less. If you think explaining bitcoin/GEM is difficult now, imagine explaining to them that they need to trust somebody else because the government/corporations is regulating bitcoin/GEM and it just isn't right! Then convince them to take your worthless money in trade that can't be used with big merchants or on the exchanges. I wonder how far that will get you.

Trusted nodes like any node, accept all valid transactions. I'm assuming you questioning what happens if a trusted node attempts to deny that a valid transaction happened? That was actually slated for a section I indexed but haven't written yet. But any node can easily spot nodes which are denying transactions. When it becomes a pattern, they simply cease to trust those nodes and broadcast the evidence. They can easily spot double spends as well and broadcast that evidence. Neither of those acts can be kept secret. Bitcoin chooses not to act on either of these actions. If I implement GEM it will.
 


In Bitcoin, everyone is forced to accept transactions because everyone else is accepting those transactions.
My process follows the same logic.
In bitcoin, a rogue client can run off accepting alternate block chains. No one else will care.
My process follows the same logic.



Certainly, but the function and process will be agreed upon in advance. Just like with Bitcoin.
The trusted parties will be non-anonymous and known to all. No one can be expected to trust anonymously.
Evidence of distrust will be published for all to see. Actions are not just denied. Known parties are publicly accused.



The major difference is, in Bitcoin, if any random anonymous individual shows up with a block chain that *NOBODY* has ever seen, but it has a greater proof-of-work. Then everyone *must* accept this as the new gospel truth even if it erases a month of valid confirmed transactions. That is just silly.



All of this holds for every block chain based crypto currency including EnCoin.

If the exchanges and the merchants all decide to do something you don't like. Well, sad for you.
Unless you happen to be among the 99% of the clients who decide not to follow them. In that case, they lose.

The 99% can take all their existing coins and trade amongst themselves on one fork.
And sell the 99% of coins they have on the other fork for goods. Never putting another dollar back into the exchange for merchants to use to cash out. Bye bye evil merchants. Bye bye evil exchanges. It's an OWS wet dream.

Trust me. The 1% has to follow the 99%, even if the 1% is all the merchants and all the exchanges.

There is no need to alter the client for trusted nodes to decide which transactions to accept. In bitcoin, everyone is forced to accept transactions because they are secured by proof-of-work. Yours are secured by trusted nodes and some yet-undisclosed function--"The function just serves to get everyone to the same starting place. If it turns out the fittest block was created by someone nobody trusts, they can choose the next fittest. Anyone can pick any block, announce their intentions and see who follows them. If nobody does, they can switch to choice most popular among the circle they trust. If nobody trusts their circle, that is no fault but their own. GEM can't make people like you!"


Doesn't seem like there's a whole lot keeping it together, either.


And if "they" get together and decide to change the protocol, you have no recourse. Except whining on a message board, of course.

I'm really not trying to be obtuse. If I have been personally successful trading with amazon.com and apple.com, then yes I know and trust those merchant addresses. If every node I trust is on the same the same branch as me, that is 100% consensus for me.

There should generally be no invisible branches. That is true of bitcoin also. The only time an extended branch might exist that I don't know about, is in cases of network partitioning. With my version, everyone gets immediate notice of network partitioning. No one gets a surprise 8 hours later when 80 blocks magically get reorged from a previously hidden malicious chain.


The same is true of any chain. If a government says, "You can't use this client or this chain!" Then you either follow the law or break the law. No system can make something illegal into something legal. And no system makes it impossible for altered clients to fork the chain.


Branch dying is purely pragmatic. It does not need to be enforced by code.

Say there are 7,500,000 BTC in existence. Now say the US government says the American users (10%) *must use* the US branch, but the 90% of the world decides they want to stay on the original branch. So now the US branch has 7.5 million BTC and the world branch also has 7.5 million coins. That means 15 million independently spendable coins if the two forks persist. This is an untenable state.

If the US branch continued, the 90% of the folks on the world branch would just spend or cash out their 6.75 million *free* coins on the US branch. That would crash the US exchanges and bankrupt the merchants. They simply cannot continue. They would have abandon the 10% branch or abandon the coin system entirely.

Exchanges and merchants simply can't trade on multiple forks of the same chain. They have to pick one and only one. If you want to trade with them, you have to go with their choice.

It's really not a hard problem to solve. You maintain and trade on the branch you can see. So does everyone else. Normally there is only one branch everyone sees at the same time. If people disappear, then re-appear on a different branch, then there was an honest network partitioning. You settle it according to pre-agreed upon rules. If a new branch nobody has seen comes out of the blue, everyone simply ignores it.

You personally know amazon.com or google.com? Don't compare your idea with mine, I am merely pointing out a problem. There is no 100% consensus with your system, there are merely trusted nodes that users are using to figure out if they are on the correct chain or not.


You are drawing a picture from something other than what I said. If the government forces these businesses to operate on your network in a certain way, they must do so or be operating illegally. Since most everyone will be using these trusted merchants as their source of trust, they will be forced to follow whatever path they take. If these trusted merchants refuse to use a fork that allows unregistered accounts, everyone will follow right behind. I'm just pointing out that the merchants can manipulate the system, whether or not it is of their own volition.


I see no provisions for a dying branch. I see that many branches could easily exist with your system of trusted nodes. There is no proof-of-work supersession, so whoever wants to trust whichever fork will remain on that fork. There is nothing that will cause that fork to die off unless every single user of that fork chooses to stop using it.

And the US and the rest of the world do NOT have a choice if major merchants are forced to do something by the US government. Your coins have little to no value if they cannot be used anywhere.

Exactly. Thank you! I should learn to be so concise.

I reordered this to put the important question at the top.


I really want to be open minded about this. Can you give me a single example of when, as a GEM owner and client, I should trust the anonymous opinions of unknown individuals over a 100% consensus of merchants that I personally know, trust and do business with?

Keep in mind, very little of my money goes to anonymous individuals like Guido the killer pimp or Silk Road merchants. Most everything I buy comes from horrible evil corporations like Taco Bell, McDonald's, Amazon, Apple, Safeway and Exxon. I could be biased by the fact that these evil corporations seem to have business models based upon *not* cheating me. I'm not quite as confident in the business models of random anonymous coin users.



If you are on the fork with 99% of people, you win. If you are on the 1% fork, you lose. The great mass of humans retain all the power.

If the US citizens and the rest of the world chose to follow what the US government decreed then they are the 99%. Should the US Government turn out to be the 1% or even 10%, their branch will die. Otherwise, we all have free coins on both branches and we all win. This is not GEM specific no coin chain can be forked and have both branches continue.

In bitcoin, if some anonymous party takes everyone down a malicious branch, you'd have to change code and issue new clients. In my model people just have to say "You are malicious! We are not going to trust you anymore. Bye bye!"



It is centralized accounting (there is only one valid block list). But with redundant copies and watchdogs. 1,000 redundant copies and watchdogs is probably sufficient. We don't need one billion copies and watchdogs.



See above.

I do too. I really can't get excited about coins when speculation is the real focus. I really want to buy things!


Thank you!

I'm going to work on some simplifications and then see how few bitcoin changes I really need to make to get this thing to work.

How is there nothing EvilCo can do to muscle them around if they can simply say "I don't accept your coins unless they're on my fork"? If, for example, the US government passed a law that said "all transactions to non-registered GEM accounts are illegal", all US businesses would switch to a fork that denies transactions to accounts that aren't registered with the US government or whatever. Anyone who wanted to use those sites would have to switch as well. It doesn't have to be an "evilco" per se.


*shrug* I think it's a flaw for a "decentralized" currency to become quite centralized.


No, the system is in the hands of the corporations which means, in turn, the hands of governments.


Detecting it is meaningless if you can't prevent it.

A bit of your reasoning goes over my head, but I'd mine it. I like the idea of a *coin being tied to something of worth (in this case, power).

I'm thinking about taking a current copy of Bitcoin and forking it into a stable currency model like GEM.

Is anyone interested? I actually have the programming background and skills, but I hate to waste the effort if it will only be interpreted as in attack on Bitcoin.

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I have to admit that originally the concept of burning 36,000,000 joules to create each GEM couldn't be a more stupidly wasteful idea. But after analyzing http://blockchain.info/ for a few days, it is clear that is what Bitcoin is already doing.

Well not exactly, but clearly Bitcoin is not creating coins more efficiently than that. Each Bitcoin created costs, in electricity, almost exactly what its dollar value is. Bitcoin seems to be unique in manufacturing, in that coin manufacturing costs increase and fall non-linearly to match sale price. This is precisely the opposite of most industries, with fixed costs an non-linear profits based on demand & price.

GEM won't be more electrically efficient per dollar, but it will be per GEM. It's manufacturing costs will remain constant per GEM, and will scale linearly with GEM demand. Originally, I expected to do much better than that in electrical consumption. However, I think the wasteful approach would be the more understandable to the initial target audience.

Bumping this because I just got asked the same question in two other forums.

5) Decide how to reconcile multi-interval chain forks

This seems like a hard problem but it really isn't. If two forks come from a common chain, and there was an unavoidable network partition, then none of the transactions should overlap. Even if there is partial over lap, once you remove duplicates all transactions should confirm in either order. So, given the two 4 block chain forks that share a common block X:

X, A, B, C
X, D, E, F

Dropping duplicate transactions means the two concatenations below are identical.

X, A, B, C, D, E, F
X, D, E, F, A, B, C

If there are two different transactions trying to consume the same out-points then you have an intentional double spend. This should be flagged for everyone to see and all the referenced out-points should be locked.

The only issue comes from what to do with mining transactions on long forks where transactions from both forks can't be honored. In that case you have to decide which is the major fork and which is the minor fork. The minor fork's transactions get concatenated to the major fork. Decisions like this have to be considered based on the intentions of each forked party. As such they should be human decisions.

However they can be easily automated by pre-negotiating and publishing consensus rules listing well known (non-anonymous) peers. Long forks result from a long term partitioning of the GEM network. The fork most "visible" to the pre-negotiated peers becomes the major fork.

This partitioning could have been accidental (benign) or deliberate (malicious). If it was an accidental partitioning, everyone on the minor fork would know about the partitioning as soon as they stopped receiving announcements. At that point they would know, under published rules, when their mining would be rejected. That allows them to stop appropriately and to begin again once connectivity is restored.

If the partitioning was deliberate, the perpetrators knew in advance their ploy would be rejected. Unless, they had the collaboration of a majority under the pre-negotiated rules. But in that case, the other fork would have noticed the collaborators leave. It would then know in advance it was the minor fork.

If collaborators appear on both branches, then there is clearly a malicious attack in progress. Otherwise, the network would never have appeared partitioned. It is in cases like these, that public disclosure, revoking of trust, and renegotiated rules become warranted.

Third Order (Social) Dynamics

Systemwide, Bitcoin and GEM have to do the same six things:

0) Broadcast/receive transactions to/from all peers
1) Calculate how many new coins to give out each 10 minute period
2) Decide who to give those new coins to
3) Validate transactions & build new transaction blocks
4) Reach block consensus among all peers on 10 minute intervals
5) Decide how to reconcile multi-interval chain forks

GEM does the (0) identically to Bitcoin, so I won't be discussing it. GEM does, however, reassign some of the latter five responsibilities.

Originally, Bitcoin did all five of these using a single transaction block proof-of-work process. However, pooled mining refactored (1, 2). Mining rewards are detached from transaction processing responsibilities. With pooled mining, the pool operator becomes the actual "Bitcoin "peer". It receives transactions, validates them and builds the blocks (3, 4, 5). The miners themselves avoid these responsibilities and concentrate on hashing (2). This makes pool miners peers among themselves, but not true peers of those who process and validate transactions.

GEM emulates pools in this regard. It treats mining (1, 2) as one problem, and transaction processing (3, 4, 5) as a separate problem.

Bitcoin relies on an algorithm to decide how many coins (1) per block. It then used the proof-of-work as a system wide weighted random number generator (2) to decide who gets them. The combined process is seen as a reward for providing transactional stability.

GEM solves those two problems behaviorally. It lets anyone mine when they see profit to do so. This solves (1 & 2). However, like pooled miners, GEM miners are not required to simultaneously mine and process transactions. Mining rewards answering the "how many new GEMs?" question. It does NOT reward securing transactions.

Securing transactions is assigned to those with a self-interest in secure transactions. This generally means merchants, exchanges, and GEM transaction service providers. These folks profit from GEM clients buying and selling actual goods worth real dollars. Their profit depends on their client's unwavering trust in the GEM system. Clients can go elsewhere. They are never required to trust anyone. Client trust has to be earned.

GEM miners, however, are in a different class than clients. Miners are *required* to trust the system. But, only for a very short period. GEM miners mine only when there is short term gain to be had. They must immediately trade their mined GEMs for someone else's (dollars/goods) before the stabilizing price evaporates their ROI. When there is no profit to be had, miners lose interest. These are not the people who should be trusted with transactional stability.

So who (3) validates transactions? Anyone who wants to be a "full peer" can receive all broadcast transactions, validate them, and build a transaction block every 10 minutes. This activity is NOT rewarded in GEMs. This is done deliberately to minimize the breath of transaction broadcasts. If you care about transactional security/stability you are welcome to join in. You just have to pay your own bandwidth bills.

How do you (4) reach consensus? Easy. You throw dice just like Bitcoin does. Every full peer creates their own block on 10 minute intervals. Then they broadcast the hash of their block and a randomness dependent "fitness function" to the other full peers. Everyone selects the block with the best "fitness", downloads it, revalidates it, then broadcasts an "announcement" transaction to the world.

WTF is a "fitness function". The best example is the bitcoin proof-of-work test condition. The block+nonce must hash to a value less than the target value. In the above example, the "fittest" block could be the one with the lowest value. Or it could be the one with the shorted Hamming distance to the previous block. It really doesn't matter what function you choose. As long as the block creator can't manipulate it trivially.

The function just serves to get everyone to the same starting place. If it turns out the fittest block was created by someone nobody trusts, they can choose the next fittest. Anyone can pick any block, announce their intentions and see who follows them. If nobody does, they can switch to choice most popular among the circle they trust. If nobody trusts their circle, that is no fault but their own. GEM can't make people like you!

The goal is for the block chain and announcements to notify every peer and client immediately if something is going wonkey. If 20 of your trusted peers announced in your previous block, and only 2 in your most recent, you are mining or transacting on a fork or stale branch. Full peers should know this within a few seconds of each 10 minute interval. Miners can be sure of the consensus by pinging a few of their trusted exchanges.

I don't think I am giving anyone outsized power. No one can force anyone to change to a particular new client. No one can force anyone to trust anyone else *blindly*. I think those are good principles. SolidCoin implemented a trust model where everyone is forced to trust one known guy, nine unknown guys, and anyone who might get rich. That seems silly.

In your example, say EvilCo bought off all the programmers and one or two exchanges. Now if they tried to do malicious things, all the evidence is public. The other non-malicious humans could just decide not to trust them and continue on. Trust always remains a human decision.

If that forks the chain, then presumably the malicious humans are on one fork and the non-malicious are on the other fork. How you feel about that is really a function of who comes with you to your fork. If you are on the fork with 99% of people, you win. If you are on the 1% fork, you lose. The great mass of humans retain all the power. There is simply nothing EvilCo can do to "muscle" them around. EvilCo has to "market" them around. EvilCo can't even divide the system 50/50 and have both forks continue. That's an unstable state. It's an all or nothing game.



I'm not attempting to hack anything on to bitcoin. Bitcoin is what it is. I'm just trying to use shared understanding to keep discussion of the interesting bits on track. So far, so good!

I'm not sure what your beef is with the monetary model. It's exactly the same as EnCoin's. I guess you are saying you don't like the in-points transaction out-point structure in the blocks and think balances would be better. That is not part of the discussion I'm trying to have.

Most of your logic about bitcoin not being able to scale is sound. However, it was never meant to scale in the way you say it can't. Peer to peer in bitcoin didn't mean that every client user must be a peer. Satoshi wrote from the beginning that competing transaction processing peers would evolve. Most people would just choose a peer and use bitcoin as a service.

I see that bitcoin is about halfway there now. Mining pools represent the first stage of transaction processing centralization. Eventually someone will re-factor the wallet file to remove the private keys and put them on people's cell phones. Then new transactions will be created and signed offline. Then they'll be sent to their favorite merchant or transaction processor directly. When you think about bitcoin this way, there will be no scaling problems at all.

If I could submit secure GEM transaction from my phone. I'd have no problem using the system without running a peer at all. As long as I know merchants (and others) have a vested self-interest in keeping EVERYONE honest. AND I know these folks won't be blindly trusting ANYONE to remain honest. Then the system is in safe hands.

There should never be a 51% trust problem. That is a silly problem to try and invent. Trust is a human concept that can't be automated. System validity is easier though. If any single human peer working alone can't detect 100% of system wonkiness then you have design issues.

Aren't you kind of giving the exchanges the power you seemed to worry about? Or at least assumed was inevitable. It seems as if the door is wide open under this system. What if a large conglomerate of businesses decide they want to change the protocol? Change to their system or your coins are worthless. Taking power away from the people and putting it right back into the hands of corporations.

And why work toward hacking this on to bitcoin when bitcoin can't scale? Without deflation, this system will scale even less well. Since the value of coins don't go up, people will continually use the same amount of coins, which means each transaction may have hundreds or thousands of threads to follow. So GEM visa will have to be created and now you have corporations controlling what does and does not get approved, if they so choose.

It's really easier than it seems. But it will take me longer to describe it than I have now. I'll write what I can now and clarify later.

The 51% problem is possible because bitcoin allows undetected alternative forks to be created in private. It then makes it possible for malicious parties to require everyone to switch to their "secret" fork because of a mathematical quirk in the rules.

You prevent this by deciding on transaction "confirmation" depth. Say three blocks deep. Then having each peer create a rolling block lock for those committed transactions. In this implementation, it is not possible to require any node to switch to any alternate fork if it requires changing a previously committed block.

What is missing from bitcoin is the ability for anyone to detect that a network partitioning (accidental fork) is currently in progress. What I want to add is the ability for peers on either fork to detect the absence of those transacting on an alternate fork. Making a personal decisions to stop mining or transacting on your current fork becomes much easier if you realize your "personally trusted" trading partners are absent from your current fork.

The block chain implementation is simple. Currently in bitcoin, only mining transactions are validated against the PREVIOUS block in the chain. Regular transactions can be copied and move from one fork to the other with zero knowledge of the account owner. This is what makes fork substitution difficult to detect, except for those who lost the mining transaction in the discarded blocks.

I propose that GEM validate every new transaction against a particular "currently known" block in the chain. That allows any merchant to create an announcement transaction that says, I'm currently trading on this fork. I does this by simply transferring 1 BTC from it's "well known address" to itself.

So if you are mining on a chain and you wish to sell you GEMs at Fred's exchange. But you don't see Fred's announcements in the previous three blocks of your chain. Well then, you are forked, and you should consider whether to continue or stop mining. Perhaps Fred is forked or perhaps totally offline. This is easy to detect if your chain has lots of announcements from other major know merchants. Certainly, it is a good time to check Fred's website or send an email. The point is, you are informed something funny is separating you from your other trusted peers.

More later

Well I have to admit I didn't really try scaling to 100 trillion GEMs. But I did plan on keeping the block chain. If the whole system can scale to handle the transactions a 100 trillion GEM economy needs, I can scale it to handle the additional mining.

Generation could either be implemented similarly to bitcoin but with variable interval blocks as you suggest. Or alternately, GEM mining could be encapsulated as individual transactions. Multiple mining transactions would be placed in each fixed interval block just as is done with other transactions. Both ways of course beg the question of how the system would deal with chain forking and reconciliation.

I'm proposing a dynamic mining economy. One where inflationary periods might bring most mining to a standstill. One where deflation will cause miners to come out of the woodwork. And one where in stable periods, the most efficient will tend to drive out the fastest miners.

In GEM The fork with the *most* hashing is not necessarily the preferred one. Therefore bitcoin fork reconciliation rules cannot apply. If they did, in inflationary periods, most any idle mining pool could collaborate to grab 75% CPU. They could then rewrite the chain and double spend at will.

I have a solution of course. I was saving that for the next section though. It uses rolling block locks and a trivialized version of EnCoin's TrustNet mechanism.

There is really no upward bound on how many blocks can be generated in a given period of time. You just have to add more miners.


Since they all mine non-competitively, 10% more miners (meaning 10% increase in MHash/s) per year would match your growth rate. However, since we already compensated for increasing (MHash/j) That would mean increasing electrical consumption 10% per year as well.


Wow, that is a vote of confidence! But still, it is just a matter of adding 10% more miners and 10% more electricity.

I'm not saying this concept isn't electrically STUPID! (In fact sometimes it is hard to type this stuff with a straight face.) It just seems like it could be plausible.

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But your statement points out a really important dynamic. I put in the non-linear "Deflation Spending Subsidy" to help in cases like this. I probably should have given this specific example more thought.

Let's consider two different transaction fee rates.

10%: At this rate, miners would have to mine 10% of the existing GEM economy just to keep up. As they mined more than that, it would be supplemented by the subsidy.

So in my hand wavy example, if they mined (transaction fee * 2) GEMs, it would result in 3 GEMs for the price of two. Distributed 2 to 1, between miners and spenders. So you wouldn't really need to mine a full 20% of the economy to get a 10% net increase of GEMs. If they mined (transaction fee * 3) GEMs, maybe it results 6 GEMs for the price of 3. (3 to miners and 3 to spenders.) [Waving Hands]

Reducing the transaction fee,

5%: At this rate, miners would only have to mine 5% of the existing GEM economy to break even. After that the subsidy kicks in. (transaction fee * 2) mining results in 10% GEM growth. So mining 10% of the economy would get you 10% growth.

So the non-linearity really depends on where we set the transaction fees. (2x at 10%) fee = (4x at 5%) fee with a much higher subsidy. (12 for 4)? [Waving Hand some more]

Anyway, I think I used the wrong non-linear subsidy function in the example. I want it to be able to grow fast, but be tied directly to mining effort. And something not too exponential so it doesn't blow sky high if miners over compensate while trying to make a fast buck.

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Do you think an appropriate function exists?

Etlase2 had suggested a fixed fee to exert downward pressure on the EnCoin supply. He used that to rationalize minters needing to mint continuously to replace fee coins. Basically GEM is a variant on his ideas. Since I began with the fixed fee and constant electricity mining. Fees and mined GEMs were the two easiest quantities to measure.

If (total mined/trading fees) = 1, then the total GEMs mined equals the total GEMs destroyed. So the number of GEMs in existence remains exactly the same. Since nothing really changes monetarily, I defined that as "just right" (stable).

Rationally speaking, if the number of GEMs in existence is exactly right for the external economy, there is no reason to mine or to take a transaction fee. Everyone should just be left alone to trade among themselves.

Originally, I proposed a different concept where in the stable state, all fees were refunded back to the original parties. In the stable state of that version, miners didn't have to mine, and weren't rewarded for mining. However, that represents a bigger deviation from bitcoin principles and I don't want to take needless tangents.



I think the ratio = 1 definition of stable is pretty sound conceptually. Defining the fee percentage is going to require some serious arbitrary rationalization!


Yes that is correct. At least in respect to the miners. They will always receive the same GEMs for each successful mining proof-of-work.

The non-linear "Deflation Spending Subsidy" however, tends to break all the rules. It is intended to encourage GEM spending and discourage GEM hoarding in moments of deflated values. This subsidy come out-of-thin-air as a result of mining. However, it is paid to those with spending transactions in the previous block, NOT to the miners.

This is the only time I break the 1 GEM = X Joules rule. But it seems fair, since the transaction fee destroys GEMs without refunding Joules at all. Etlase2 proposed banking all transaction fees into a sort of "Deflation Spending Subsidy" savings account. That holds everything to the 1 GEM = X Joules rule should ideological purity becomes a goal.