Topic: Would you support moving to a system with controled inflation? - page 3. (Read 13187 times)

Okay, I see. You are not proposing inflatacoin as others are saying and I didn't think so. Basically, you are proposing that instead of the block mining payout drops (every 4 years) to be a smooth transition over time and to be more loaded to the mature network than the immature network. What about keeping an incentive for mining after the 21million BTC have been distributed? Still have fees?

If I was gonna do it, then I probably would set it up with the following parameters.

Same 21 million just like Bitcoin.  There is nothing wrong with this number.  But instead of 50 coins for the first 210000 blocks, I would make the reward try to mimic an objective measure of the community size with a formula.

Here is an example formula (BTC per block) for that: B * (ln(difficulty)² / 4)  where B is a percentage of coins not yet distributed (1 for 21 million, 0.5 for 10.5 million, 0 when they're all distributed).

This would result in 50 coins being given out per block once the difficulty reached 2.3 million.  Current difficulty of about 70000 would pay about 30 coins.  If I fired up just my own GPU's (eight 5970's), the difficulty would be about 700 and the payout would be about 9.50 per block.

Then I would correlate the maximum block size with the difficulty.

well, i think the main point is this:

now that current bitcoin exists, nobody in his right mind would trade current-bitcoins for inflata-coins, because they know that current-bitcoin ultimately has a limited supply, and is likely to increase in value, while the new inflata-coin will not.

so... nobody stops you from creating inflata-coin - it is a simple change of about 5 lines of code in the current bitcoin client, and you're off to the races with your new inflata-coin block chain. (well, that and you have to create a new genesis block). if you inflata-coin supporters want to get together and jump onto the inflata-coin block chain, nobody's stopping you, give it a go, and see what happens.

that's what satoshi did - rather than arguing about deflata-coin (current bitcoin ), he just came out and did it to see what happens, in an experimental fashion. so do the same.

my prediction, however, is that you'll have a hard time attracting significant mining power.

You can't make people hoard or not hoard BTC. It is not your call.
Hoarding does happen and it will happen. Some people may hoard for very long time, and you cannot do anything about it really.

I like the market the way it is now. Sure, there will be ups and downs, but more inflation will not fix anything.
If you create new "Inflacoin" and start from scratch, the effects will be exactly the same. The early adopters will start their rigs first, acquiring 70% of the currency before it becomes popular enough so that other miners will want to risk joining.

So what you are proposing does not fix Bitcoin childhood problems at all.  And at the moment we are experiencing childhood of the currency, so instability is expected.

You cannot fix instability with more inflation !

Look....the fact is...nobody want to use inflatecoin. All your rational fore why inflatecoin is a good thing is bunk if you can't get self-interested individuals to move to your new-fanged currency.

Even new people don't want to use inflatecoin.

First, it's not the inflation method.  I am not calling for perma inflation.  Just a corrective action to deal with the disparity between 25% of the coins being out there for a community that is only less than 0.1% arrived, a disparity that can be exploited the same way scammers exploit a pump-n-dump penny stock.

Second, the most obvious sign I'd point to is how the price of the BTC jumps and falls with such little volume.  What held BTC over the dollar mark temporarily was volume well under 100kBTC, or less than 2% of the entire circulation.

The next most obvious sign is the thinness of the market.  If 0.1% of the BTC gets sold on the open market today, the value crashes to nothing, and the person doing the selling walks away with all the money on the market.  The disparity provides an opportunity for the holders of the 5M+ BTC to do that repeatedly - or as is more likely to happen - incrementally so it's not so obvious.  Not a good thing for longevity and, under such circumstances, certainly not a better place to put wealth than Bernanke Bucks.

The value of the BTC today is more tightly bound to how much it is being hoarded - an artificially scarce supply - rather than the true demand versus supply if it weren't manipulated.  This is part of why I have encouraged so much mining - to grease the free market a little, by putting bitcoins in the hands of people who are more likely tol move or sell them, and less in the hands of those who collectively have millions of them stashed away.

If fewer people were holding tightly to BTC in hopes of getting an outrageous return, more BTC would be flowing freely in the market.  The end result I would expect would be a much lower BTC price, but a far more consistent one.

I don't doubt your motives are good and genuine casacius. Interested to know why you think the current programmed inflation method is contributing to destabilising bitcoin valuations? Is there something you have noticed that can draw a link?

Troll much? But I'll bite. Adding permainflation to our currency won't help stabilize it. The way I see it, it'll just turn the overall upward value trend into an overall downward trend.

As far as I'm concerned, the fact that I intend to wait for a far more fertile opportunity to do so should not be construed as a concession to the idea that I'm not willing to put my effort where my mouth is.  After all, the recipe has all but been handed to me - but to be done right, more changes should be made (either a fork, or this'll really annoy some of ya: a patch to the mainline Bitcoin client that allows it to participate in a different network with different rules without needing a fork, either with a command line switch, or by being compiled with different compiler flags).

I believe the more times the BTC price takes a huge plummet coming down off highs, the closer that time will be, the draw will be a reduction in volatility.

Not only that.

You also need to switch to another network, like testnet.
Changing the code you wrote now and running modified client in normal Bitcoin network, should be treated as an actual attack on the network.

Inflationists: Go fork and create your own network. It is just few lines of code.

I'm sick of this debate anyway.   Again:  just create a inflacoin, if you want.  It is just one line to comment in bitcoin's source code.

First, BitCoins are not like stocks, they don't split.

Second, if in 1900 you saved your $20 bill hoping for it to increase in value, you lost over 90% of your buying power. Paper Money has no value, it will not increase in value over time because the things you buy with it go up in value not down.

Since BitCoin has no system of saving to offset inflationary pressures, the flow of it is more valuable than just saving it.

Use it or Loose it.

That wouldn't bother me, really.  At all.  I'd buy some of this new currency too.

Hopefully those newcomers don't decide en masse to start another block chain, that's all I hope!

I would probably agree with that, the way things are looking


The exploiting I'm talking about hasn't happened yet.

Problem is that nobody would by a constant inflation currency.  I wouldn't anyway.

Nobody forces anyone to buy bitcoins.   I started to buy bitcoins when it was around 0.2$/BTC.  So according to you I was exploited by people who bought at 0.1$/BTC.   And yet I don't complain.  I decided to buy those coins.  On the contrary, I am thankful to satoshi and other bitcoin pioneers.

The reason why I think it would fix it is because it would eliminate the disparity between the community size and the circulation.  Right now, 25% of the BTC is in play, but only <0.1% of its community is at the table.  That fact allows one group of people (those here) to grossly exploit those who aren't here yet.  And we all (well not me) seem to be happy with the idea that we're "entitled" to do so, for taking the "risk" (whatever that was), or for being the first (as though that means anything) to get their hands on something that is purported to be more fair than the dollar.  What a lie!  Either we are entitled to grossly enrich ourselves with Bitcoin at newcomers expense, or Bitcoin is "fiat but fair".  It can't be both.  If there were a constant block reward, or at least the length extended to keep the community size in proportion to the total percent circulated, this disparity would be greatly lessened.


Since we're on the topic, would you care to narrow it down?  Otherwise it is just a weak ad hominem... don't like the message, attack the messenger?

I also support helping new people mine, which bothers other self-interested people looking for the biggest profit, and seems inconsistent with the rational self interest of someone who is trying to gain something from mining (which you probably know by now I am).  Could my hidden motive be the overall success of Bitcoin?  I mean, why would a miner want to help other miners?  Same deal.

I think he meant "constant inflation".  But you make a good point.

Yes you can.  All you need is a bunch of bureaucrats who will decide for everyone what money should be used from now on.  Just like we did in Europe with euro.

Changing BTC to inflationary model will not fix this.
BTC with constant block reward will be also very deflationary in practice, and the situations you described can happen as well.
"Inflacoin" would be suspectible to the "early adopter" problem in the same way as BTC is, because that always happens with a rising currency - there are few people who invest in the currency first and they get the most out of it later - you can't avoid that.

And i still think that you have some hidden motive in supporting this.