Topic: Limited coins and hoarding - page 2. (Read 8887 times)

They may be but at least they existed and people learned from it, and at pennies would still have some value. 

Napster is gone but it lead to decentralized file sharing and then eventually bittorrent.

Because I can't, that was part of the proposal. I don't have any network programming experience. I could eventually learn, sure, but that would involve spending a lot more time than I already have before I could even begin. IF enough interest is generated, I'd probably be willing to pay to have someone help. As yet, no emails.


Drama queen again. I could program most of the complexity in a few hundred lines of pseudo-code if it wasn't a waste of time. It took satoshi what, 9 pages to describe only the block chain in his white paper. He didn't touch on anything about the network protocol, the coin distribution, potential economic effects, etc. whereas all this is included in my 20 page proposal. I could describe the transaction block chain and how it provides security in my proposal easily in 9 pages or less.


I predict that 5 years from now bitcoins will be worth pennies again. *shrug*

I like you proposal and it sounds good. Why not implement it already mate ? I feel you like to talk a lot but little coding or actual doing the coin

Any benefits for early adopters or did I get that wrong too ?

To the skeptics : nothing is ever 100% perfect. Not Satoshi. Not bitcoin. Nothing.

So you claim but it is unproven.  Why not make it rather than making grand claims.  I will believe a manipulation proof currency when I see one. 

One that actually exists.  One that is even plausible to exist.  I read you papers.  The amount of complexity is staggering.  How are you going to convince people to have faith in something 99% of planet won't understand.  CryptoCurrency is a leap upward in level of understanding required.  Your scheme is a couple magnitudes higher.

A currency nobody uses has no value.  Nobody uses enCoin.  It has no value.   I predict that 5 years from now you will still be railing on about the unequal distribution of early coins (which will be a smaller and smaller portion of monetary base) and enCoin still won't exist.


It exists.  It does a lot that enCoin doesn't.  If your claim is Bitcoin isn't perfect well nobody believes it is.  However the most "perfectly engineered currency" that is so massively complex it never gets off the ground created no value.

Do you understand what oscillate means? Honest question.


LOL @ bold. No, you haven't been helpful in pointing out how you think a currency needs to be manipulated for it to be successful. I disagree. Economists disagree, but they don't really have a better way than the status quo. Or if they do, they believe the current scheme is so entrenched in the government/bank hegemony that there is nothing to be done to wrest it back, so they wistfully talk about it like Mises.

You are apparently only willing to have faith in something that you can currently see a dollar value next to, but nothing else. It's short-sighted. Not exactly a surprise when you have people around here clamoring to give their wealth to satoshi.

Well the downside is that I might accept 100 Encoin for 100 barrels of beer today, but only be able to buy 75 barrels of beer tomorrow for 100 Encoin, with no chance that I might be able to buy 125 barrels of beer.

You're relying on people to act in a fundamentally irrational way. That won't happen. I hope I've been of help in pointing out the major flaw, or at least the question that needs to be answered. I've got other things to attend to now.


True. Any viable p2p currency would gain the benefits of increased trade.

And you don't seem to get that by having no "upside" which you define as gaining wealth for nothing productive, there is no "downside" either. Oh yes, faith could be lost. But faith could be lost in any currency. Faith is being lost in the USD because of currency manipulation. By what manner would faith be lost in a currency that is nearly manipulation-proof? If hoarders hoard, people create more currency. Hoarders know they will do this, so it is in their best interest not to hoard. The currency can't be created except for a lot of electricity, processing power, and time. None of these things are free. A value can be put on them. This value will oscillate over time, but it is highly unlikely to oscillate in such a way that it loses 95% of its value such as the USD over the last hundred years, or gain 1 million % in value such as bitcoins then lose 1000% in value over the period of a couple years.

What is more likely to engender faith? That which oscillates mildly, or that which loses 95% of its value or oscillates between +1 million and -1000 in a matter of a few years. Is it just the fact that there is an actual dollar value on a BTC that makes you have so much faith in it?


Bitcoin may lower the barrier to trade, but it doesn't do anything that an encoin couldn't do. It still transfers wealth whether or not it helps create some in the process.

Oh I couldn't let this go!

Trade creates wealth. Bitcoin lowers the barriers of trade, allowing more trade, creating more wealth.

Bitcoin makes the pie bigger for everyone. It doesn't necessarily distribute it evenly, but don't think it's zero sum, it ain't.

Maybe X should be whatever. Not really interested. I'm just trying to understand your idea and if it is viable.

I assume you've given up trying to explain to me why people are going to hold a currency with downside but no upside risk. You're going to need to explain this to people even dumber than me if your currency is going to be adopted. I suggest you think of this as practice!

Money should strive to be neutral. The purchasing power of money should stay the same. The net gain on society when the value of gold or bitcoin goes up is zero. As gold rises in value, some people will inevitably sell. It is most likely going to crash again unless world currencies start dropping like flies. When it crashes is not predictable, so that is what fuels the speculation. Money should not be a speculative vehicle. If its value rises, those who have more of it transfer wealth from those who have less. If its value drops from supply inflation as with fiat, the wealthy still transfer wealth because they are the ones at the top of the currency food chain. This is what is causing the class disparity and OWS and all that jazz. Again, even if bitcoin were reasonably distributed, just like what happened with gold-backed currency, the wealthy become wealthier and you enter a recession because the middle and lower class can no longer afford to pay for things the rich provide.

The purchasing power of money should stay the same in a perfect currency. Austrians believe this, Keynesians believe this. Bitcoin doesn't even make an attempt to do this. It attempts to encourage people to gain wealth for nothing productive. This is why we are in a recession, playing with the value of money. Those at the top with the power end up happier, those in the other 80% are oppressed.

You are falling for the same shit that you are stuck in with fiat, except that you think you can become the 20% or the 5% or the 1%. And by you I mean anyone who thinks bitcoin has a solid foundation for monetary policy. Because if you don't accept the fact that to gain value with bitcoin others are losing value then you are deluded. Wealth is not created by a currency or how scarce that currency is. A currency is just a means for moving wealth around. And both bitcoin and fiat have measures to move wealth involuntarily up the chain to those who already have wealth. It takes it away from those with less.

I am not going to link wiki garbage or anything else to prove this point. It should be self-evident.

A currency that the people actually control, not some computer-driven distribution that is arbitrarily limited, will probably engender more faith than any government currency ever could. It cannot be manipulated by those with wealth, it cannot be manipulated by those without. It is driven by the will of the people as a whole. Should this not be what we strive for? Never before in history was something like this possible, and bitcoin absolutely blew it. Maybe it was a lack of vision, maybe it was just plain old greed, the same shit that got us looking to alternatives. An alternative that makes YOU the 1% is no alternative for the other 99%.

It is not a nitpick.  The ONLY REASON why average cost to produce is lower than average retail price is because higher cost mines are idled which lower the average cost to produce to below average wholesale cost.  There isn't some magic intrinsic value to Gold.  If gold fell to $200 next year then all mines with cost >$200 would idle and yeah the average cost to produce in 2012 would be lower than the average wholesale cost but that would only be because of the idled capacity.

There are spec "mines" running now which siphon gold from waste slurry.  Cost of production is something like $1000 oz+.  They only exist because Gold is trading at 400%+ over average cost of production.  Those mines are just temp operations and will shutdown if the cost falls.

Not at all. Gold might drop to $10 next year (or whatever its value is as an industrial commodity), or Bitcoin might lose 99% of its value - there are many who will tell you it will do just this. Not a problem for Gold or Bitcoin though, there is no maximum price, so the upside balances the downside for holders.

You've explained how you've taken the upside away from Encoin. But I still don't see how you've taken away the downside.

That's great and all, but it is mostly irrelevant to the discussion. I am talking about the average cost to produce and over time. Of course you can nit pick specific instances in time or in place, but all you are doing is nit picking and obfuscating the heart of the argument.


Yeah, and the gold bubbles are not so much different from bitcoin either. And the problem with bitcoin is that it compressed 5,000 years of the history of gold into 3 years. All of the easy to find gold got mined in the first year, then it got exponentially more difficult. It never had a chance to be actually used as a currency before the enormous amount of easy gold was put into the hands of a small number of people. Throw history out the window, fuck it let's do it all over again. Humans are gluttons for punishment, after all. Tell me what to do, wealthy overlord, for I am your slave.

Not sure where you get this gold has routinely been sold below cost of production.  Production of gold today varies from as low as $200 per oz to as high as $650 an oz (and that is just among publicly traded companies).  When gold falls below the price of production for an individual mine that mine idles.  Many mines operated through short term negative pricing simply because the cost of idling and restart didn't warrant it in volatile markets.

Not much different than Bitcoin.  Hashing power has gone down with price.  When Bitcoin fell below cost of production miners shut off their rigs.  Now Bitcoin has a lot of non-business people who don't see the folly of mining when they could be buying but that is more a reflection of an imperfect market.  Eventually Bitcoin hashing will become big business and someone with a $50,000 hashing farm isn't going to just keep hashing below the cost of production.

Gold has done it throughout history, for example. This is why it has been a good starting point for currency. There is nothing particularly special about gold except that it is a small portion of the material on Earth and it is pretty. Pretty doesn't put food in my mouth or a roof over my head.


This is starting to get frustrating. I explain to you that gold has never gone below its cost to produce, yet you worry that something similar will drop to 0. And this worry is based on faith, apparently, which is the basis for all currency (almost all of which, nowadays, has a near zero cost to produce). So there is apparently something inherently unfaithful about ENC, but not about everything else used as currency.

Then you find it unconvincing that gold has, in recent history, cost around $320/oz to produce, that it has never fallen anywhere close to that price, and that when gold was selling for $2900/oz that this wasn't a speculative bubble? I'm not making up the $320/oz number. That is what it costs to produce gold. The reason why gold doesn't back currencies anymore is because it caused a deflationary spiral when economies started growing faster than the gold supply. Now money is backed by zilch. Bitcoin as a currency works in the same, silly way as gold during deflation and results in speculative bubbles.

I propose a happy medium where the commodity is always very difficult to produce, but as much of it can be produced as necessary. In what way do you think people will lose faith once it is adopted as a currency? People haven't lost faith in a useless element on the periodic table. People have kind of lost faith in currency backed by the will of the government. This currency would be backed by the will of the people. It is only produced if people WANT it, which means there must be some faith. The cost to produce is just a base line, the same as $320/oz for gold. It is proof that EFFORT went in to getting this thing called an encoin (bitcoin has no such proof as early coins were mined for thousandths of a cent). Faith is faith and I can't make any guarantees about that, but I can guarantee that speculative bubbles won't exist because you are guaranteed to lose value. Every time.

This is part of what I like about Bitcoin. With the CC system, the cost of fraud is borne by the retailer (and then socialized amongst the customers) who can do nothing to fix the situation. Bitcoin, a customer can have his Bitcoin stolen, but the customer is the one who can put measures in place to prevent this.   

No, I've moved on from that. You've explained to me that it will only be created if it's price goes above a certain value, and so its supply is limited. Only the irrational would produce it at a higher cost than to buy it. That prevents bubbles, and sets a maximum price. Understood. Nice feature (if you like that sort of thing!).

What I don't understand is how you can hope to maintain a minimum price.


I don't find that convincing. Things don't necessarily maintain their value because they were expensive to produce. Why would I hold something at $300 when it might drop to $0, but can't be worth more than $340? That seems like a bad bet to me.

Because demand could never get too far out of line with supply. The main issue you have with my idea--that it isn't scarce. Which isn't true, it's just that gold and bitcoins will be more scarce.

I gave you the example of "what if everybody could mine gold at $320/oz?" You countered with "what if people lose faith?" If gold is $600 an ounce and I can produce it slowly at $320/oz, you can bet your bottom dollar I'm going to be spending a lot of time mining gold and so will a lot of other people. So if gold gets to $600, it won't stay there long, and everybody knows it won't stay there long because they can make more themselves. If gold is $300 an ounce, no one in their right mind would bother mining it. Gold lost 60% of its value because the speculative bubble burst. If gold never got so far above its cost to produce, it would not have happened.

ENC will not ever get so far above its cost to produce because everyone can produce it.

http://en.wikipedia.org/wiki/File:Gold_price_in_USD.png

If you look at this chart, since around 1973 gold's price has never dipped below $380ish (inflation adjusted). I don't know what the cost to produce gold has been throughout that time, but you can probably infer that it has been level at around $320/oz (inflation adjusted) since then. (Yes it was cheaper before 1973 as most of the "easy gold" was now probably mined.)

So look at that crazy graph and tell me there is no parallel to bitcoin. Now do you think the graph would look so crazy if everyone could make gold, but it still always cost $320/oz to do so?

I just want to be able to pump and dump EnCoin. Is that too much to ask for ? And a viable ETA because ATM it is all just talk no walk.

No, you've lost me now. Explain to me again, why is it something like gold (I was just following your analogy) could drop by 60%, but Encoin could not?