Bitcoin Forum

Hi, I would like to present my proof on how to make a stable cryptocurrency. By far i am not the first to think of these methods, but i hope to present a viable solution for implementing them.

                                              qbit³ - Whitepaper.pdf (http://)


I should clarify the development aspect of this, I am not an engineer, my specialty is in system design, what i am submitting is the front end that will enable end-users to easily grasp the value of the currency as it relates to major currencies, all while maintaining the value and stability of the currency in light of market conditions. Like all good design, this is done in simple form as outlined below. Should another creative mind have solutions to backend problems like efficiency, resiliency, and scalability, these two solutions could be merged to form the next cryptocurrency.

Steps to produce a positive end-user experience throughout the course of the currencies life:

1. Remove the 21million limit.
2. Set the currency decimal place to .001.
3. Set the block reward at .001, and then to scale linearly past 1 Terahash to 1qbit @ 1 PetaHash, and so on.  

Theory:
Other stable-value currencies that toy with the idea of money destruction, time penalties, or free handouts dont address the reality that penalties will never be desirable nor practical in controlling supply and demand, nor will free handouts or any exchange-related action by the protocol. As we can see now it is not shortage of supply so much as it is the perception of this shortage that satoshi created to help fuel adoption of his currency through speculation. In the same way, a system destroying or shaving off coins would be perceived as a currency that automatically loses value, so would freely distributing new currency without anything to back it. This is why i propose that mining is the all essential mechanism to validating the price of a currency, and that to free it from the bonds of artificial scarcity we simply have to remove perceptual limits, and allow the currency to scale with the market. Its as simple as that. No need to unduly reward or penalize users for simply doing what they're supposed to do.

Proof:
I would like to offer proof that the most recent bubble was not the result of 'hoarding' (lets call it 'saving', what we use to do in the prosperous 20th century), but it was in fact the result of (among other socio-political factors) the increased cost of creating a restricted supply:

Hash Rate Vs Market Price (USD), matched by date. The increased cost of producing a Bitcoin preceded the upswing in price by over a month in the beginning of the curve and by a week in the end. Had the cost of producing a bitcoin stayed the same despite network conditions, miners would have been less incentivised to hold on to them in the first place, which would have quelled the price war that led to the extreme volatility that followed.



http://vimveritum.com/Hashrate-VS-Price_annotated.png

I'm supposed to pay BTC to download and read your whitepaper?  ???

Just pay for the paper and then post it for the rest of us.

The only stable cryptocurrency is a dead one!

Which may explain the link not working.

Sorry, turns out the bitcoin based file host i used didnt like people using it for free, lets try again...

"By Don Giovanni"  :D

Why pdf?  Can you please post a text file, or a LaTex file if formatting is an issue?  A lot of us are very wary of scripted malware in pdfs taking our Bitcoins.

Link has been updated to a private host.

Its 2013, people should be able to read pdf files by now  ;D :D

I love the idea despite the invalid accusations that its come out already.. Actually READ the paper people and see its not the same. When does it start?

I will read this with my Mountain Dew in the morning, let you know what I think after that! :)

Post updated to reflect position.

if you don't use adobe to read pdf's i don't think you can get viruses or malware from pdfs.

I like some of these ideas. 

Cool concept, I would happily throw my miners at this coin!

Interesting concept, well writen paper.

One thing I'm very sceptical about is relying on data from an exchanger, though. It's a big vulnurability.

True, but if you are referring to the network hashrate this can be gleaned clientside.

So you are trying to build a table of peer IPs and geolocate them to their local electricity price ? You should really read Douceur's sybil attack paper and let it sink in for a few days, then take another stab at this.

Ascertaining the densest geographical location of nodes was an example that could be used to determine the typical electric prices of miners that would be then used to determine what the average base cost is of mining for each node in the network; this was used to demonstrate how the block reward should scale, but isnt used in the scaling algorithm. The only reason to use this formula in protocol would be for getting a figurative idea of what the price would be used if one wanted a decentralized way to ascertain a % fee. 

If the majority of the speculators who drive the price are not miners (which I believe to be the case, especially during bubble conditions,) how is jiggering with the mining parameters going to influence their perception of anything? I have trouble making sense of this.

Its an issue of supply vs demand, we already have a network that fluxuates with the market, all we need is a supply that fluxuates with the network.

Price goes up -> Hashpower goes up -> Mint rate goes up -> price stabilizes with influx of new currency.

Price goes down -> Hashpower goes down -> Mint rate drops -> price stabilizes above cost-floor.