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Topic: rpietila Altcoin Observer - page 23. (Read 387519 times)

sr. member
Activity: 336
Merit: 260
October 01, 2014, 06:20:45 AM
Nah just pick your favorite POS and try to articulate. I don't mind pictures either. Without any way to convince that you are doing something great, the chances that anyone will buy it with significant value are slim.

Well, here is one way to articulate it.

The only real driver of demand for a currency not backed by unique tangible properties (all cryptos fall under that category, PoW and PoS) is when something unique can be purchased for that currency and that currency only. That is the key to success. Why is USD in such great demand? Because you need it to buy oil, no modern economy can operate without oil. Create unique use cases that others don't have and you're ahead of others, but not for long if you stop creating those unique use cases. Algorithms, inflation rates, proof-of-xxx models are not significant. What really matters is what you can use it for. If you think of unique use cases for various cryptos, you may come to interesting conclusions. But you need to try to use various cryptos (PoW, PoS) to be able to appreciate their pros and cons and envisage their potential.

I won't pick one PoS, you know which PoS is ahead of others at this point. This can change, but the concept of PoS is here to stay as long as the concept of crypto currencies in general survives.
donator
Activity: 1722
Merit: 1036
October 01, 2014, 06:08:18 AM
- coin generation schedule should take into account the size of the economy;

Is there an economy behind BTC or any altcoins? Altcoins are bound to BTC and BTC is bound to the USD. But I never heard a company is producing and selling their goods for a fixed BTC price. Everyone still calculates in fixed $ prices and adjusts BTC prices every minute/hour/day.
[/quote]

Luxembourg is typically considered a state, yet its economy is 75% connected to the neighboring states. Therefore it has no economy?

You would have to define quite strenuously what an economy is and is not.

One way to go is attributes of money:

- in the transactions, Bitcoin is typically quite minuscule % of even those who use it
- in the unit of account, quite many use it internally, but things priced in bitcoins are rather few (Malla event was priced in bitcoins and made a huge loss due to exch fluctuation and cost being in fiat)
- in the store of value, the Bitcoin heavy users store most of their value in Bitcoins.

Alts similarly, but to a smaller global degree of course, since all alts combined do not match 10% of BTC.



donator
Activity: 1722
Merit: 1036
October 01, 2014, 06:02:36 AM
...awaiting the explanation.. Smiley

I don't think I can explain, it's a clash of ideologies. In that kind of opposition verbal arguments, which there's been no lack of recently, just don't work. There is a reason they made the "A picture is worth a thousand words" proverb, because sometimes you have to see it to believe.

Nah just pick your favorite POS and try to articulate. I don't mind pictures either. Without any way to convince that you are doing something great, the chances that anyone will buy it with significant value are slim.
legendary
Activity: 1131
Merit: 1001
October 01, 2014, 05:47:43 AM
My newest thoughts about monetary economics, plus exhortation to find a new initial coin distribution paradigm.

I believe that:
- coin generation schedule should take into account the size of the economy;


Is there an economy behind BTC or any altcoins? Altcoins are bound to BTC and BTC is bound to the USD. But I never heard a company is producing and selling their goods for a fixed BTC price. Everyone still calculates in fixed $ prices and adjusts BTC prices every minute/hour/day.
sr. member
Activity: 336
Merit: 260
October 01, 2014, 05:45:29 AM
...awaiting the explanation.. Smiley

I don't think I can explain, it's a clash of ideologies. In that kind of opposition verbal arguments, which there's been no lack of recently, just don't work. There is a reason they made the "A picture is worth a thousand words" proverb, because sometimes you have to see it to believe.
donator
Activity: 1722
Merit: 1036
October 01, 2014, 05:40:05 AM
- none of the current POS are in a right track (but I am glad to be proven wrong!  Grin).

You seem to be overall a nice guy, but you're wrong about this one Smiley

Well this is the place to discuss about it. Sorry that I always want the people to explain it to me, instead of me going to the source.

But awaiting the explanation.. Smiley
sr. member
Activity: 336
Merit: 260
October 01, 2014, 05:38:37 AM
- none of the current POS are in a right track (but I am glad to be proven wrong!  Grin).

You seem to be overall a nice guy, but you're wrong about this one Smiley
donator
Activity: 1722
Merit: 1036
October 01, 2014, 05:30:42 AM
My newest thoughts about monetary economics, plus exhortation to find a new initial coin distribution paradigm.

I believe that:
- coin generation schedule should take into account the size of the economy;
- it is not necessary to waste 100% of the value of the new coins as energy - that was necessary in gold era because trustless generation could not be otherwise maintained;
- it might be possible to find a way to distribute this value trustlessly in a way that enhances the economy and adoption;
- none of the current POS are in a right track (but I am glad to be proven wrong!  Grin).
hero member
Activity: 795
Merit: 514
October 01, 2014, 05:07:22 AM
What I'm suggesting basically means the same hardware will yield the same profit whether it's used for mining now or 10 years from now, because every contributed hash will always have the same return over time (CPU mineable forever?). I'm guessing this would also reduce the profit incentive for special hardware manufacturing.

I don't get it. How does manufacturing an ASIC that hashes 1000x more efficiently than a CPU not have a high profit incentive if rewards are tied to hashes?

I'm assuming there would be no increased competition to "win" blocks if the same asic is just as profitable today as it will be tomorrow (ignoring speculative coin value). If the hardware race is truly a product of bitcoin's manufactured scarcity (a growing network competing for a decreasing reward), then assigning a fixed value to every hash would remove scarcity from the equation. More hashes is still better, but there's no more race to dominate the network.

However, I'm simply thinking out loud and could be completely wrong about everything.
legendary
Activity: 2968
Merit: 1198
September 30, 2014, 10:03:45 PM
What I'm suggesting basically means the same hardware will yield the same profit whether it's used for mining now or 10 years from now, because every contributed hash will always have the same return over time (CPU mineable forever?). I'm guessing this would also reduce the profit incentive for special hardware manufacturing.

I don't get it. How does manufacturing an ASIC that hashes 1000x more efficiently than a CPU not have a high profit incentive if rewards are tied to hashes?
legendary
Activity: 2156
Merit: 1072
Crypto is the separation of Power and State.
September 30, 2014, 09:58:47 PM
DarkNote just gave the CN community a wonderful gift - encrypted messaging with the same privacy protection as transactions!   Cool


Encrypted messages Cryptography implementation is now on github - opensource

https://github.com/ducknote/darknote/commit/caf9925c34eb0f9ffa7a842f4ae3b4bb5a069154

Now we can pass notes in class, with no fear of being caught or having them read out loud.   Grin
hero member
Activity: 795
Merit: 514
September 30, 2014, 08:10:09 PM
I believe they are hoping in vain, because the "new money" not yet invested, does not see such a coin as a very interesting investment and do not buy it. So instead of a rise, a fall in value is the result.

This is why I've always believed in a perpetually increasing (or difficulty-dependent) block reward... it encourages use as a currency (medium of exchange) as opposed to an investment vehicle, and new adopters are never punished for arriving "late".

Imagine a coin with a difficulty-adjusted block reward of 10 coins per 1 billion. Block rewards would be very small during the coin's early growth, but would scale up or down with the network. When difficulty reaches 1.45 billion (XMR's current difficulty), the reward would be 14.5 coins. This would also be the most fair and fungible crypto, as all coins would cost roughly the same hash power regardless of when they're mined.

I like this notion and have fostered it myself, though I don't think it is the whole picture.

Bitcoin is perpetually inflating.
In the current picture up until 2140.
It goes well beyond this when the decimal point moves.

Coins are lost/destroyed over time too increasing scarcity.  So there is more to it than just the difficulty, but that should be considered.

Bitcoin is different because the money supply is finite. I don't see how lost/destroyed coins are an issue with an undefined/infinite money supply that grows with the network. Am I missing something?

What I'm suggesting basically means the same hardware will yield the same profit whether it's used for mining now or 10 years from now, because every contributed hash will always have the same return over time (CPU mineable forever?). I'm guessing this would also reduce the profit incentive for special hardware manufacturing.
legendary
Activity: 1204
Merit: 1002
Gresham's Lawyer
September 30, 2014, 08:03:39 PM
I believe they are hoping in vain, because the "new money" not yet invested, does not see such a coin as a very interesting investment and do not buy it. So instead of a rise, a fall in value is the result.

This is why I've always believed in a perpetually increasing (or difficulty-dependent) block reward... it encourages use as a currency (medium of exchange) as opposed to an investment vehicle, and new adopters are never punished for arriving "late".

Imagine a coin with a difficulty-adjusted block reward of 10 coins per 1 billion. Block rewards would be very small during the coin's early growth, but would scale up or down with the network. When difficulty reaches 1.45 billion (XMR's current difficulty), the reward would be 14.5 coins. This would also be the most fair and fungible crypto, as all coins would cost roughly the same hash power regardless of when they're mined.

I like this notion and have fostered it myself, though I don't think it is the whole picture.

Bitcoin is perpetually inflating.
In the current picture up until 2140.
It goes well beyond this when the decimal point moves.

Coins are lost/destroyed over time too increasing scarcity.  So there is more to it than just the difficulty, but that should be considered.
hero member
Activity: 795
Merit: 514
September 30, 2014, 07:28:31 PM
I believe they are hoping in vain, because the "new money" not yet invested, does not see such a coin as a very interesting investment and do not buy it. So instead of a rise, a fall in value is the result.

This is why I've always believed in a perpetually increasing (or difficulty-dependent) block reward... it encourages use as a currency (medium of exchange) as opposed to an investment vehicle, and new adopters are never punished for arriving "late".

Imagine a coin with a difficulty-adjusted block reward of 10 coins per 1 billion. Block rewards would be very small during the coin's early growth, but would scale up or down with the network. When difficulty reaches 1.45 billion (XMR's current difficulty), the reward would be 14.5 coins. If the network stagnates, then you essentially have a fixed-reward (perpetually decreasing) inflation. This would also be the most fair and fungible crypto, as all coins would cost roughly the same hash power regardless of when they're mined.
legendary
Activity: 826
Merit: 1002
amarha
September 30, 2014, 03:00:50 PM

Interesting timing. Poloniex just implemented marking as their user reputation system.
legendary
Activity: 2968
Merit: 1198
September 30, 2014, 02:12:30 PM
If Bitcoin was fully mined, such as Quark, there would be nobody even remotely interested in buying it, and the price would be down even more, with no sign or prospect of recovery.

I must assume from that sentence that you plan to sell your Bitcoins in a near future, lets say when 18-19 millions are mined? And/or the plan is that by time BTC is 10-20 times worth more? what will prevent that price to plummet then? adoption? thanks.

The wide adoption should really be achieved by then, which would give a reason to hold it or buy it (for use). Otherwise it likely won't ever be.



When someone buys, someone else sells. Which translates what you just said to "give a reason to hold it or buy it or sell it".

That is somewhat accurate. If there is no compelling reason to participate at all (hold, buy, sell, mine, etc.), then you ultimately have a stagnant system that really goes nowhere.
hero member
Activity: 588
Merit: 500
September 30, 2014, 01:35:32 PM
member
Activity: 84
Merit: 10
September 30, 2014, 01:21:20 PM
I have no doubts that you informed about all issues and would be happy to see a result when you finish that.
donator
Activity: 1722
Merit: 1036
September 30, 2014, 01:18:44 PM
How does "new money"'s perception of the coin change if the inflation period is long? I mean, what benefits are there in the long inflation period for investors? How is growing economy of the coin dependent on the length of the inflation period?

Nobody loves inflation, but few people regard it as a horrendous evil to be avoided at any cost.   Normal people do not expect that a hoard of cash will keep its value, much less grow more valuable, by itself, over time.  And, for the good of the economy, they shouldn't "invest" in cash or other "dead" assets: they should use their intelligence to choose productive enterprises, and invest in them.   

Cryptocurrencies were meant to be means of payment; their repurposing as long-term investment has always been criticized by economists.

(besides that I entirely disagree with separating means of payment from a store of value,)

My view is more practical. I believe it is a good idea to have an uninflatable store of value (this is the original Bitcoin thinking). But if I am faced with a choice to buy into a coin whose community is growing and consists of people willing to store their savings in this inflatable currency, or a coin whose community is eager to unload their stash to the next generation at greatly higher prices and live well off the proceeds, I go with the former. That I am currently part of the latter also, should not be a distraction.

Bitcoin was the best choice in 2010-2013. Now I have been the early promoter of this thinking, and the coin I believe best suits it, Monero. The amount of actual attacks speaks about that it is taken seriously.


legendary
Activity: 3766
Merit: 5146
Note the unconventional cAPITALIZATION!
September 30, 2014, 10:52:01 AM
The supermajority (perhaps not of the people, but of the supporters of various altcoins) believe that the initial emission period should be rather short, to "get rid" of the pesky "inflation", so that the coin can "start rising in value".

These people have no interest in the long term success of a cryptocurrency platform.  The are interested only in making a quick buck.  It is a viewpoint entirely fueled by greed.  Though this motivation is understandable it is exactly the opposite of what the market will reward.  The market cannot reward this any more than we can defy gravity.  If it did there would be thousands of tremendously successful altcoins.  And where would this value come from?
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