Topic: StableCoin - page 2. (Read 9019 times)

This would not work when deep pockets come...

 OK, i can double my money in a year...
OK, how much is available... hmm i could buy it all..


then what coins would you use for commerce?

Yes I would! 

I checked your link. Great! And yes, I will keep you updated!
(I got so much piss from other users just for proposing this thing - you wouldn't believe...)

But as I said, mining validates the need for new currency. Currency will only be given away when people are mining, and mining is not ever required to be happening like it is in bitcoin and its derivatives. Security of the network is completely separate from mining.


As we have seen? We have seen nothing but crony capitalism. The fed doesn't print money and helicopter it into the economy, it prints new money to bail out banks and serve congressional interests.

In addition to that, as I have stated, mining is required before free money will be created. One way or another, as the economy expands, value has to go somewhere. It either goes into existing currency by enriching only those who hold more than average amounts of the currency, or you can use it to enrich a much wider array of people. Including those who might be on the fence about accepting the currency.

There is no such thing a free money, this is what the fed attempts to do with quantitative easing and stimulus bills. There is only so much value in a network, if you increase the amount of money in a system without validating its existence, it decreases the value of all money proportionally. What you are suggesting is a tax on the network to the advantage of transactors in an attempt to further stimulate spending.

These inflationary measures will not doing anything but trickle-up, as we have seen in recent years. Creating a central-bank in protocol is opposite to the bitcoin design philosophy.

We're not talking bitcoin here, we're talking stablecoin. You quote one part of a 5 paragraph post and say I'm focusing on dumping. Are there any specific things you don't think I've addressed, rather than just leaving it open ended and implying a failure to account for something else?

This chokepoint you speak of was the result of a fixed block reward coupled with a moving difficulty. In the early days the difficulty was so low anyone could earn the block reward easily, this being the same block reward that as of last winter took incredible amount of investment to earn. Had the block reward been pegged to the difficulty then it would not have cost its users any more to win the same amount of currency than had they been the first and only miner.

This is why most of the currency is in the hands of so few people, when you have a pit full of gold and no one else to compete with, then winner takes all. Widen the pit with the influx of new miners and now everyone will have an equal take no matter how many join.

Are we talking about the same bitcoin where greater than 50% of the currency to ever be created is in the hands of <100k people? Where 20% of it is probably in the hands of a few dozen? I don't know how you can possibly make the argument that bitcoin mining is somehow a solution to demand when it is, by design, a choke point of the currency. My concerns are not "more geared towards dumping", they are geared towards providing a stable currency base that is difficult to manipulate by those who mine, those who have coins, or anyone else. This is without resorting to some kind of centralized solution or being tied to hard formulas that will not be able to adapt to reality.

Your concerns seem to be more geared towards dumping. This is only an issue in the real world when someone with a massive supply can continually dump to create a market dependence on them, but since anyone can be a supplier at any time in bitcoin this isnt an issue.

I can understand everything but part (4)

(4) the big premajn plans
(2-3 mils koinov.)
then there are the units
90 +% of the premajna will be sold
wishing to 111% of cost
premajna.
the remainder will profit premajna
project.
Exit the Exchange is not planned
prior to the distribution of premajna.
So no pamp'n'dampa
WILL NOT.


so premine 2-3 million coins, then 90% will be sold to something 111% of the cost of the premine. I can't fully understand that. It sounds vaguely like a market maker. Then you talk about the exchange. Are you trying to keep a price level equal to an existing currency?


Point (1) has many of the same problems as bitcoin:

(1) to be laid on the growth in the number of coins
at 7% per year (or still at 6).
Pure "inflation" but will be less.
Loss of coins, etc. things will be drawn from 7%.


This does not make it easy for the network to grow when it needs to grow. To start gaining acceptance by the world economy, the currency needs to be able to expand to it. 7% supply inflation will cause a lot of deflation because 7% can't keep up with the potential network growth--it could be several thousand times in a year. In my opinion, this will cause people to leave because the currency is a hassle to use (like bitcoin).

From translating I think the gist was that there will be a market maker, someone with a lot of coins keeping the price stable. But I dunno for sure, it doesn't translate well. Not a particularly decentralized approach though if that's the case.

wingding would you post about you and your plan in this thread?
I'm trying to keep an index of all the on going efforts.
https://bitcointalksearch.org/topic/stablecoin-welcome-and-introduce-yourself-179918

I know I'm lame but I can't read Russian. Is their an english summary? Or can you tell us the basics?

I think there is a much simpler solution to the problem: constant increase in new coins beeing produced.

Firstly, in the adaption phase where many people are getting in, the relative increase in volume would make hoarding less attractive

In the long run however, the inflation will approach zero.

I have proposed one way to achieve it here: https://bitcointalksearch.org/topic/i-will-create-a-forked-bitcoin-chain-181488

Are you planning on responding to any of the nice posts I've written for you?

At least in Decrits, because of the difficulties associated with minting, you must have both a significantly more efficient piece of hardware AND enough of them to begin a Mint Block AND enough of them to mint a large portion of that block all at once. If they can't, there will be big penalties. This will require a massive, very risky investment. And because the rest of the network knows someone is minting while minting looks unprofitable for all of them, they are given the opportunity to defend currency creation by joining the queue and keeping difficulty normalized. Because creation is limited by transaction activity and there are minimums of time that must pass, this opportunity to defend is specifically designed to exist.

While this is plausible in a steady state, it is not possible during rapid economic expansion, like the early adopter phase. The only way to have bitcoin stability now is to convincingly convey gradual higher targets for the eventual size of the bitcoin economy. Price will immediately jump to that value, with a small time preference discount and a large internet-funny-money-better-go-to-the-bank risk discount.

If there is room for economic growth, and the market sees it, it will internalize it as deflation, preventing growth.


It's unlikely to follow the same adoption paradigm as Bitcoin, people won't hoard it because it loses value and can't use it yet because there's no market for it. So Bitcoin is a great forerunner, creating the infrastructure and the market for cryptocurrency. If at a later stage a stable and slightly inflationary currency appears, the community would be all over it because it's a better currency. The marginal cost of extending mtgox, bitpay, silkroad etc. to support this new bitcoin-like currency is negligible. You could incentivize them by giving away lots of the initial batch of currency to prospective customers and make the market for a limited time to give it value.

So with a little help from a centralized pusher in the bootstrap phase, decentralized inflatacoin could survive and disrupt bitcoin.

Processor cycles are not useless but hash collisions are. So while it's easy to produce more hashcoins when they are valuable, nobody gives a damn that your hashcoin took 10x more cycles to produce a year ago than they do today. You can't recoup those cycles and put them to other uses. So unlike bricks, there's no built-in inflation protection.

For the hash energy cost variation, just look at the Bitcoin mining market during the ASIC and GPU revolutions. We should not expect each new incremental technological improvement to affect the mining market. It's a small market where a single product can change the game. If 120nm ASICs are available today, we should not expect a 90nm ASIC a few months from now because of fixed development costs, economies of scale for the incumbents, etc.. If mining stays profitable a few years from now someone will introduce a 22nm chip which will have a rapid impact. Maybe not 10x, but even a 2x efficiency improvement (or rumors thereof) will be highly disruptive for the hashcoin currency market and it's users.

And this is the expected behavior. Unexpected and unprofitable behavior should be acknowledged as a possibility.


I am not sure who you're replying to, and Red has taken a crack, but I will take one as well.

It goes back to game theory. The Evil Guys or whomever may want to lower the value of the coin by minting unprofitably. However, with free coins given away, their unprofitability will be profit in the hands of others. The deeper they want to go, the more significant the investment that needs to be wasted to achieve further instability. This will likely only be accomplished when the network is small. These evil guys will make money for everyone else, and everyone is fairly likely to know what is happening, and no one is really worse for wear other than those who wasted the time, effort, and money to cause the problem. As transaction activity grows, the ability for anyone to do something like this diminishes.

What destruction are you accomplishing when you force other people to profit off of your expense? Evil Guys' attack fails at game theory.


Incorrect. It is validated by those who wasted effort in creating new currency by minting.


It will take some time for an "inertiacoin" to find its sweet spot. The sweet spot may move a few times as, for example, cheap electric economies start minting. But, as the network volume increases, a larger majority of the people around the world will have to be involved in all facets of the currency. Things will normalize. There are two big arguments against your "severe repercussions": 1) those who were already using the network will receive free money to account for losses in the value of each unit (market cap neutral), and 2) it does not affect other assets (this means that the currency will be seen as a "good deal", but only because it is selling for less than its cost to produce, not because it was cheaper than it was before). As the system grows, it will become more and more difficult to try to hide anything. The more you try to hide, the less of an effect you can have.


Speculators in an inertiacoin style market will have no more power over a regular market. They will not be able to manipulate the money supply in the same way they can with bitcoin. Buying large amounts over short periods is the surest way to lose money. Bubbles will not be caused by speculation because everyone can at least have an idea of what it would take them to create currency. This fact can't be hidden. Any short-term instabilities created in a small market will almost invariably benefit the general user base rather than the manipulators, at least if you give money away to transaction activity.

Despite what it seems, I'm in complete agreement with you. However, I agree what I wrote was confusing.


If only you would read what I MEANT, instead of just reading what I WROTE. :-)

I can make the case for incentives and disincentives too. But that is really a separate discussion from mining.

Ultimately the issue you will run into with free handouts or enforced penalties is that neither provides an incentive to do anything in particular, that is people will continue to do whatever it is they want. Its specious to say that because we have X system that this will produce Y behavior in its users.

There are some known variables of behavior that we can rely on:

It costs $ to make Coin
Miners have to remain liquid despite desire to hold
Miners wont dump coin for less than it cost them unless the whole market is on a downward spiral
Users dont care about price of coin, they just want to use it.
Speculators will do anything to destabilize the market to profit from the difference. 

Now if you give spenders free money to spend, then its going to enter the economy unvalidated, that means not only will you lower the price of coin (if that is your goal), but you will also lower the confidence in the value of the coin, this could have severe repercussions in the long run.

The issue here is the effect speculators have on the market, and without a central bank there is only one way to handle them, by increasing the monetary supply in concert with demand, in a controlled validated manner, that is by bitcoins very design solely through its miners.