It does sound like a political agenda, and a marxist one at that. Which is a fine viewpoint to have, but politics should be solved with politics in my opinion.
Ouch. I could sit here and write a book on all the thought processes I've had going into this project. I came up with the idea in like june last year, and since then it (encoin) went through 4 major, completely changed revisions. The reason why I wanted to come up with a stable value currency was because I ran the numbers and figured that the first 1 million or so bitcoins cost about 0.00016 US cents each. At their peak around that time, bitcoins were costing around $3.60 each
without hardware costs included. About a 3 million % return on the original BTC at today's prices, and something like 20 million % at $30. The people paying $3.60 per coin in cost to produce were continuously enriching the earlier adopters. Pyramid, whatever.
I wanted to have all the great features of bitcoin like anonymity, unregulated, easy to send payments, etc. without all this crap. I also wanted to fix the scalability issues and waste of energy issues and the 51% attack problem.
Although a stable currency is a valuable goal, I see a lot of confusion between the value of an xCoin vs the cost of producing an xCoin.
For example, bitcoins are valuable to me personally because I live abroad, and it's a fast and cheap way to transfer money to/from friends and family back home, for stuff like birthday presents etc. The value I place on bitcoins has very little to do with how much electricity it cost to produce it.
It's understandable that you have a bitcoin-biased view of a cryptocurrency's value. Yes, the currency I design will not inherently be worth what it cost to produce plus a profit margin. People must demand it. Since it has all of the same benefits as bitcoin, it is possible that it could achieve the same level of demand. The whole point of this exercise though is that if people are not selling (as in the case of BTC's run up to $30) or demand has jumped, it becomes more and more profitable to mine for new coins. This in turn brings the price back in line near the cost to produce.
The whole free coin aspect which you seemingly take issue with is not some Marxist plot to redistribute wealth. If the demand of the economy requires, for example, 1,000 coins to bring the trading value of the currency back in line with its cost to produce, then either 1,000 coins can be mined at a cost of $X electricity, or 500 coins can be mined, 500 given away at a cost of $X/2 electricity. The people using the network win rather than the electric company. But the point is we do know that coins are demanded because people are using electricity to make them. I don't think I posted this in the encoin thread although I had hinted that I was working on ideas with this, but I think the best way to give those free coins away would be to people who send transactions (and hey maybe people will spend instead of hoard!). Random lucky draw gets 10 or 20 coins for making a transaction, etc.
For a multinational corporation or organisation, savings on money transfers could be huge, so they might value it a lot. Again, regardless of the production costs.
I see you want to adjust production costs by manipulating difficulty, and at the same time value by manipulating supply.... but how will a market react to a commodity that is designed to thwart market forces?
I would prefer to see supply meet needs for liquidity instead, and let ppl determine the value on an open market. And for environmental reasons try to minimize electicity waste to the minimum needed for securing the network.
The value is always determined on the open market. The system design doesn't query people and ask them how much it cost to create coins or how much profit they'd like to make. The proposal in THIS thread has to manipulate difficulty and supply because of the problems inherent to the bitcoin block chain design. With the encoin proposal, this is not a concern. This thread was more of just musings to make it work on the bitcoin codebase because no one had stepped up to help with encoin, and I knew I couldn't do encoin on my own.
The point is, the currency should not be some speculative, profit-driven machine. If the price is rising, demand is up, so new coins can be profitably made. It is that simple. Keep money creation constricted like bitcoin or gold-backed currencies, and you will have recessions galore. The wealth will get more and more concentrated to the top. Nowadays it's done in a different way with excessive inflation, but there is no downside (cost) for government to create debt-based money as they can just further inflate the currency down the road. The banks and the government win, the people lose.
edit: I later realized you may have been referring to Marx's labor theory of value because I use cost to produce as a baseline for the sell price of the currency. I've already been in a 5 page discussion on this topic so I don't really want to rehash it again. Simply, Marx did not come up with the LTV and it was the accepted economic theory for a long time prior to Marx's version.
Please note this summation of the prior theory from wikipedia:
The Smith theory of value was very similar to the later utility theories in that Smith proclaimed that a commodity was worth whatever labor it would command in others (value in trade) or whatever labor it would "save" the self (value in use), or both. But this "value" is subject to supply and demand at a particular time.
This is really not that different from the modern economic theory of marginal utility, except one has more neat expressions to go with it. The encoin design allows supply to meet demand in a very efficient way, nothing more, nothing less. It is to avoid the commodity-like currency (or currency-like commodity more aptly) problems of gold:
and bitcoin: