Topic: Timecoin - page 2. (Read 13842 times)

A smart trader will realize the depreciation before the actual drop and bet on it in advance. A smarter trader will do it earlier. Many of us are so smart that we will bet it all on Bitcoin and none on Timecoin from the first block.

But again please try it and we can lay it to rest with the experiment.

Following on from


* Immediately after the fork, the exchange rate would be set by the relative holdings of BTC partisans relative to TMC partisans.  If the ratio between TMC being sold by BTC partisans relative to BTC being sold by TMC partisans is 2:1, then it's reasonable to expect the equilibrium price to be somewhere near 1 TMC=0.50 BTC.

* If the exchange rate is above 1 TMC=0.50 BTC, then it's more profitable (ignoring transaction fees received in either block chain) for a miner to solve a TimeCoin block for 50 TMC and convert that to >25 BTC than it is to solve a BitCoin block for 25 BTC.  Miners might even implement software that tracks the exchange rate and switch between chains on the fly (e.g. if the spot rate is more than 1 TMC=0.55 BTC).

* If the fork is when there's been 10.5 million BTC mined (and thus TimeCoin starts with 10.5 million TMC) the debasement rates for the next 10k blocks (a bit more than 2 months) would be 2.38% for BTC and 4.76% for TMC.  Thus 1 futureBTC would be worth 0.9767 presentBTC at the fork and 1 futureTMC would be worth 0.9545 presentTMC.  Since at the instant of the fork BTC and TMC are identical, then the expected exchange rate between TMC and BTC 10k blocks after the fork would be 1 TMC=0.977 BTC.  This may make "on-the-fence" traders/speculators willing to buy TMC with BTC at the 1 TMC=0.50 BTC rate, preventing a dramatic fall in the exchange rate when the partisans have completed the process of trading their respective disfavored coins.

*  If the TimeCoin chain ends up with more hashing power than BitCoin then it becomes more immune to double-spend attacks and thus TimeCoin transactions engender more confidence.  We may then see the store-of-value function partially decouple from the medium-of-exchange function as merchants decide that TimeCoin transactions have a lower fraud/repudiation risk than BitCoin (in which case the merchant is basically deciding that the extra protection from being the victim of a double-spend attack is worth losing 0.3% daily due to the extra debasement in TimeCoin... of note is that merchants are currently generally willing to pay almost an order of magnitude more to the credit card industry for taking most credit risk off their hands).

Why do you want to combat deflation?
I bet you will say "because it causes hoarding and stops commerce".
To combat hoarding you don't need inflation, you can use demurrage. You can use freicoin instead of timecoin.

The austrians will say: "don't call it hoarding, is saving".
Again, save != hoard.
Hoard is just one way to save, being money time-resistant is the better.
You can save by storing things you will consume in the future (like Robinson storing fish to have time to make a ship). You can also save by lending (even at zero interest, after all the fish of crusoe is not durable).

TimeCoin can potentially fork off BitCoin at a few times and use the same block chain up to the point of the fork.

The only definitional difference between a TimeCoin implementation and a BitCoin implementation is that TimeCoin doesn't reduce the reward for solving a block as time goes by (instead, say, continuing to only accept blocks that award the solver 50 BTC as valid).  So if TimeCoin were released today, it would interact with BitCoin until such time as BitCoin clients only accept blocks that award the solver 25 BTC.  Before that, there need not be any difference between what blocks are accepted by TimeCoin or BitCoin.

Thoughts, notes, etc.
* TimeCoin and BitCoin addresses are thus equivalent (being the same keys but existing in different block chains)... they can almost be considered as slots in the same address.
* Whatever BTC balance one has at the moment of the fork in the chain carries on as both the BTC and TMC balances.  This isn't quite a double-spend opportunity because the two chains will repudiate/ignore each other's transactions.  It's perhaps analogous to a corporation distributing 1 class B share for every class A share as a dividend.
* This also guarantees a certain amount of initial exchange between BTC & TMC: a BitCoin partisan with, say, 100 BTC at the time of the fork would have 100 TMC that they would be willing to sell for BTC and a TimeCoin partisan with the same balance at the fork would find themselves with 100 BTC that they would be willing to sell for TMC.  Of course, the BitCoin partisan would only be able to liquidate their TMC by running TimeCoin for at least a short time alongside BitCoin.
* Exchange between TMC and BTC is rather easy if Alice and Bob are running BitCoin and TimeCoin alongside each other:
Alice sends BTC from her BTC slot to Bob's BTC slot
Bob sends TMC from his TMC slot to Alice's TMC slot
* TimeCoin may possess a greater chance of a successful fork than other forks because the fork occurs at some point in the future as opposed to when the first implementation tries to participate in the block chain.

Bitcoin cannot be changed the rules are already set.
Some type of "Timecoin" with very slight, 100% predictable inflation might help to combat deflation.
Better for merchants (more stable pricing), not as good for hoarders?

As time approaches infinity, TimeCoin is, I suspect, superior to BitCoin and Expo/BernankeCoin in that its money supply is mathematically guaranteed to be constant and thus have neither inflation nor deflation and avoid both inflationary and deflationary spirals.

The best analogy to the money supply in *Coin is to consider a vessel into which water is being poured (via money creation) at irregular intervals (but the pour occurs instantaneously) and evaporating (e.g. lost wallets in the block chain currencies & sufficiently damaged notes in fiat currencies).  If, as I suspect, the percentage of the water in the vessel that evaporates is connected to a variable that has no correlation to time, volume of water in the vessel, or the amount of water being poured (and can thus be effectively considered to be its long-run average over t=(0,inf)), then (where v(t)=volume of water in vessel at time t, e=percentage of water at time t that evaporates between t and t+1, c(t)=water vapor that condenses in the vessel between t and t+1 (analogous to lost wallets being "recovered") and f(t)=volume of water poured into the vessel instantaneously at t):

v(t+1)=ev(t)+f(t)+c

For BitCoin: lim(t->inf, f(t))=0 and df/dt: never positive
For TimeCoin: df/dt=0 => f(t)=x (x: positive & real)
For Expo/BernankeCoin: df/dt=(r+e)t (r=the desired inflation rate... actually the better term is arguably KingCoin, given that the BoE theoretically has only an inflation target unlike the Fed)

In the case of fiat currencies, I suspect that c is zero (though I suppose that c could just stand for counterfeiting...).  For the block chain based currencies, c is vanishingly small (basically being the chance that someone randomly creating secret keys finds one that's already been used and lost) and likely to have a rather large variance (it may be years between successes even if the mining collectives turn their computing power to finding keys to harvest [hopefully lost] coins): it can essentially be ignored (and will have the basically same effect in any block chain currency (the effect on confidence in block chain currencies if a secret key is duplicated not being considered here)).

Assuming positive e:
For BitCoin, as t->inf, f(t)-ev(t-1) approaches zero from below thus lim(t->inf, v(t))=0
For TimeCoin, lim(t->inf, f(t)-ev(t-1))=0 thus lim(t->inf, v(t))=y (y: positive & real)
For Expo/BernankeCoin, f(t)>ev(t-1) thus lim(t->inf, v(t))=inf

e is, it should be noted, unknowable (since it's impossible to tell if a given key is lost or merely not circulating).

I also suspect, however, that there is little incentive for TimeCoin adoption prior to t being arbitrarily large...

This whole Timecoin thing does not at all speak to me.
In my opinion, this is a waste of time (Wastecoin) :-)

Yes.

Bitcoin clients will always ignore invalid blocks, no matter how long the Timecoin chain is. Timecoin could treat Bitcoin blocks as valid, but this would result in Timecoin being identical to Bitcoin unless Timecoin becomes bigger.

It will never be as scarce as Bitcoin. Think logically: You have two currencies which are identical with exception that one has more value which is expected to rise faster. What will people choose ?


You mean like allowing each node to print as much money as it wants ?
Wouldn't this be a Zimbabwe-style disaster ?

--
No, seriously. Why the hell would i want my savings to lose value ?.
Saving with hard currency is so easy. No need to buy physical things. You just keep money and they make profit. Isn't this beautiful ?

As a matter of fact I could decide right now that each block is worth 100 BTC. The Timecoin client could fight the Bitcoin deflation and just whichever has more support wins.(In the Bitcoin blockchain) :/

Instead of fragmenting each client should have the option to choose inflation or deflation and to which extend.

Isn't this possible?

The biggest resistance to Bitcoin I've seen is:
- Deflation (we want our currency to lose value).
- Mining (baww it's unfair- cry me a river).

Did anyone tell inflation-adherents that the rich don't keep hard currency, but put their money in property, stocks, 401ks .etc? I've read all the pro-inflation arguments and they don't make logical sense. The concepts are shady.

For Timecoin to work, it would have to be just scarce enough. Although, for the currency to act as a proper counterpart to Bitcoin, wouldn't each node decide on its own rate of inflation?

The fundamentary flaw of this timecoin idea is that it is no different from "normal" currencies.
What makes bitcoin so special is that it is a "gold standard" currency - it is also a commodity, contrary to Timecoin, which will get inflated forever.

Bitcoin is "physical" in a way, because it behaves similarly to physical bullion - after you mine all of it from the ground, it's gone. Timecoin is not like this.
Essentially, it's scarcity that creates value. Abundance destroys value.

----
EDIT:

So what You're actually proposing here, is to create a clone of Bitcoin, which has all the properties of Bitcoin, except it has less value than Bitcoin by design. People will never go for this.

It's so easy to implement that it is going to happen. It'll be a better experiment than the dollar because only one simple variable will be changed.

I think the split network concerns are unjustified, bitcoiners aren't going to bail en mass. Some new people will try Timecoin and see very few people accepting them as payment and a ridiculously low exchange rate to BTC and decide to switch to Bitcoin, and now we have a stronger network. It will be a temporary thing, unless it actually has some economic merit.

feel your pain trying to change the thinking of sheeple, but that doesn't mean you have to implement the bad idea to prove they're wrong, there's no need, just watch the fate of US dollar (and other fiat currencies in the same sense). -- oh wait, has history seen enough failed currencies already?

Federal reserve and central banking have perfected the art of inflationary currency, I don't think timecoin can do better than that.

Anyway, I am still worried about the downside: split networks, added confusion, overextended resource, malinvestment...why don't we concentrate on what we believe is right?

that wouldn't work either, because you are then dependent upon some financial institution's ability to defend the peg.

If someone really wanted to attempt this, one way to do it would be to keep Bitcoin's halving pattern, but double the term with every halving of the reward.  If the starting term were still 4 years and the reward 50 Timecoins every 10 minutes or so, then 21 Million coins would be distributed in the first 12 years, and 31.5 million after 28 years, and so on.

How about BernankeCoin™, whose interest rate changes at will of Bernanke.  It would be pegged to the US dollar.  I think it'll be just great!  And look at how many people use the US dollar...that means BernankeCoin™ will be very popular! 

The deflation can't be 'too big' for the economy because it is cause by growth in the economy. More stuff on offer with a limited amount of coins means higher price per coin. If the bitcoin accepting economy shrinks then the value of a bitcoin will shrink.

Obviously I'm all for growing the economy, not contradicting that sentiment at all.

The thing is that with today's advances the deflation of Bitcoin could be too big for an economy. Right now as someone pointed out we should focus in growing the economy.(The BTC/USD is now 0.4) There should be vendors everywhere promoting Bitcoins. If I don't see at least 100 persons daily adopting bitcoin from now on we must do a better effort.