Topic: Timecoin (Read 13840 times)

I think now I understand. The bigger the total supply, the more units will be lost (with each generated block). That's why the supply of timecoin would converge too: when the losses equal the rewards.


Well, if timecoin and freicoin will have a constant supply and bitcoin a decreasing supply, maybe it's more appropriate to define freicoin as timecoin with demurrage.
I was considering that bitcoin and freicoin will have constant supply and timecoin won't.
The constant block reward of freicoin could just be deduced from constant supply (in the end) and demurrage.
I was ignoring the effects of wallet losses in supply.

If the number of coins lost in the average ten-minute period is generally increasing as the number of spendable coins increases (equivalent to a positive correlation between losses over any time period and the supply), then there is a number of spendable coins where the expectation of coins lost in the next ten minutes equals any positive constant you care to name.

If the rate is 0.00009% of spendable per block (which annualizes to about 0.5% per year, which I suspect is the right order-of-magnitude), then a reward of 50 TMC implies about 526 million TMC as the equilibrium supply; 2 TMC implies a 21 million supply at equilibrium.  TimeCoin implemented as BitCoin with a 2 TMC minimum block reward would not fork until the BTC reward drops to 1.5625.

FreiCoin isn't BitCoin plus demurrage... it's TimeCoin plus demurrage (or BitCoin plus constant block reward plus demurrage)

I'm not sure I did understand you, but are you saying that 50 timecoins (or wathever the reward is) will be lost every 10 minutes on average?

That's true presuming that long-term change in number of unspendable coins is not positively correlated with the number of spendable coins over the period.  I'd say that the case for that presumption is weaker than the case for a positive correlation.

If the reward is greater than the wallet losses, the supply won't converge.


I think so.
http://www.community-exchange.org/docs/Gesell/en/neo/part5/2.htm
This and the following two chapters give an explanation why "interests are bad".

It's impossible in practice to determine whether prices are stable or a reflection of differences in preferences.  Thus it's absolutely reasonable to adjust the components of a price index; it's impossible to know how to properly adjust said components, especially in an economy offering a plethora of choices.  Such adjustment is also an invitation to rent-seeking.


That's what will happen with TimeCoin as well, as long as key loss occurs at a non-zero rate.  Demurrage effectively imposes an extra level of key loss (so it may converge faster, but will probably also gyrate more wildly).


Is reducing interest rates necessarily a good thing?

To be honest, I'm not much worried about wallet losses.


The key thing here, I think, is that artificial monetary inflation/deflation leads to unwanted results. I agree, a constant supply would be better that anything else but a magical formula that tells the system how big the reward have to be to maintain "stable prices". Too complex (if possible).


No. The nominal reward is constant in freicoin. The total supply will converge when demurrage fees equal the reward.
Implementing destruction of money supply (to be able to keep rewarding miners) by "destructive fees" would only solve the problem of wallet losses and, as you say, would discourage trading.
Although demurrage diminish some effects of price deflation, the main point of demurrage is to reduce interest rates, not purchasing power of money.

I agree.  I don't think TimeCoin is in any way ready for prime time until a few reductions in the block reward have come in... until then, it's an interesting thought experiment.


BitCoin is guaranteed (assuming a non-zero long-term rate of key-loss) to have a maximum usable money supply at some point in time (after which, of course, the money supply will contract asymptotically to zero).  A contracting money supply is generally deflationary.


The gross creation rate of TimeCoin never goes below zero... if no TMC are ever lost, 50/100 trillion is still greater than zero (the gross creation rate will asymptotically approach zero).  If there are periods where the rate of coins lost to key-loss is greater than the creation rate, the money supply will have a short bout of contraction before equilibrium is restored (barring a case where the loss rate monotonically increases... the only situation I see that occurring in is one where users simply abandon TimeCoin, in which case there's nothing that can be done at that point).

Contraction of the money supply tends to lead to deflation.
Increase of the money supply tends to lead to inflation.
A constant money supply (zero net long-term money creation) is the option least likely, IMO, to lead to deflation or inflation.


The issue with Freicoin is that it exacerbates the contracting supply feature of BitCoin (if it preserves the continuously decreasing block reward), as demurrage implemented by destroying coins is equivalent to losing coins through key loss.  Implementing demurrage through transaction fees is also likely IMO to have the effect of reducing transaction volume ceteris paribus as people hope that clients that don't enforce demurrage become predominant before they need to spend.

I did not read this whole thread but here's my thought,

Many people here think from a miner standpoint.
The fact is that generating these BTC is becoming polluting as hell.  (more than 1.5 Gigawatt)

That's one of the reason why a Gold based economy is not a good idea.

When block will become 25btc we'll see great service offers.

As far as I know, the total supply of namecoins coverge to a maximum like bitcoin's.
The only difference between namecoin and bitcoin is that the namecoin chain allows domain registration/sell transactions and the sells and registrations can be made atomically by paying in namecoins.

Anyone, please, correct me if I'm wrong.

Sounds kind of like namecoin, does it not?

Ok. you're right. People using it doesn't mean it's a good thing.
Also this last sentence was unfortunate:


I still think it has advantages for the users. The probability of "getting back" a freicoin you spent "soon" (for a good/service you deliver) is greater than for a bitcoin.

There are trillions of USD in circulation and billions of users this is not an indicator of a good system.

Uh huh.

The first argument against it seems to be that no one would use such a currency if it's not enforced, but I think merchants will accept them because they would lose sells otherwise. There's some local currencies with demurrage already functioning in Germany (and probably in other parts of the world). Here's an example:

http://en.wikipedia.org/wiki/Chiemgauer
There's 424.400 CH in circulation.
I guess all this people are just stupid.

Interesting indeed.

^^^
I'll look at the list, thanks. 

I'm not fighting against other bitcoin-like currencies. In fact, I'm trying to maintain a list with all proposals, even thought I think is too early to support the competitors when the success of bitcoin is not secure yet.
On the other hand, I don't like much Timecoin.
It tries to solve the "deflationary bitcoin" problem, but I don't think the solution is good.
First of all, Bitcoin is only deflationary if there's economic growth. To avoid timecoin deflation, it issues a constant quantity of timecoins each year (instead of a decreasing quantitiy until convenrgence).
If we assume a constant growth of 1%, Timecoin will become eventually deflationary too, since the constant issued timecoins (50 per block) are a lesser percentage of the total supply each year.
Timecoin isn't good to solve the problem it is intended to solve.
If you want to see the list of proposed alternatives:

https://bitcointalksearch.org/topic/list-of-bitcoin-like-proposed-currencies-and-chains-7500

My proposal is Freicoin, but nobody seem to like demurrage nor Gesell here.

Gold and Silver both had severe Bear markets for over 20 years, was that beautiful?   

Is this typical of the Bitcoin community?


Bitcoins will eventually face some kind of competition, and people who act like this actually help to devalue your precious Bitcoins, IMO.


Gold, for example, has a continual increase in overall supply, due to mining in the real-world.
If there is demand for an experiment (which does not change Bitcoins rules) with very slight, 100% predictable inflation, then why put a huge effort into fighting against it?