Bitcoin Forum

Hi, this is my first post in a forum. The reason why I have registered is to ask a question...  I hear a lot about the pumps and dumps and how much it hurts the coins.

This is just an idea, and I haven't thought of a full algorithm, but I could do it too, and make some simulations.
Would it be possible to create a coin that, after every transaction from account to account, it increases the amount of coins available on the market?  So for example, if I put 10mil dollars into a coin, I get an increase of the same amount. That way, the coin price would stay the same.  To ensure that the growth is steady, the new coins should have a decay rate so that price of a coin has a steady increase? This way, it would be possible to increase the value of a coin once the dump occurs, so it would force people to HODL onto their coins.


Just wondering, and would like to hear your opinions.

It is possible but it has to be centralized.

The only way to keep the value stable is to be pegged to US dollar or Euro, like Tether, this way value will not diverge much from the pegged currency.

This. A coin that has a stable price is a coin that has a controlled market, which is not very attractive for anyone that wants to get rich by holding something that increases in value over time. If you want to hold something that stays stable, just hold fiat. And remember, it's not really stable, it has an inflation % that will slowly but surely decrease your purchasing power over time.

There's also the possibility o making the coin release slower and linear overtime to not incentivize dumping, but again, this is not attractive as a store of value. You can't have something that is not scarce and have it go up with time at the same time.

How would you prevent the news coin from flooding the market and dropping the price?

Tether is a coin that is anti-pump and dump. Its price is tethered to $1 almost perfectly for most of the time. And there will be other stable-price tokens incoming recently.

I was not thinking about holding onto a specific value. To prevent the flooding, the total amount of available coins would burn over time. Second, Lets say I buy 10 coins for 10Mil $. As soon as I do that, the amount of available coins would increase by +10 so that value of a coin would stay the same.  The point is not to have a straight horizontal line on graphs like the Tether does, but to have a constant positive slope.

Tether is a good starting point, but the question is, how to make the positive slope instead of  a zero-slope in regards to a Tether?

PS I do not care about what investors, gamblers and alike may think and how valuable it would be to them.

A coin that hasn't been mentioned here yet, is the Steem Backed Dollar (SBD). This SBD is worth exactly $1, because you can convert SBD to STEEM at a rate of 1$ per SBD (with a delay of 3.5 days).

This would obviously only work if there stays a demand for Steem, otherwise you could convert it to steem, but then no one would want to buy it, but the current Steem Markets are very active and they're not going to fall soon.

More information on steemit.com

You can do that but it has to be centralized!

You issue and buy back in your own exchange and you control the prices...

Yes, any coin that is fully controlled by the state, or with a fixed exchanged rate. I think some countries have or had them.

Unless you control the market by force there is no way to make avoid pumps and dumps

I've read the FEDERAL is designing a "FederalCoin" which for all intents and purposes is what Tether does but backed by the government.  IF that happens then maybe we will have a real marker currency we can measure against and not BTC.

I think it will help the cryptoworld a lot if that happens.

Congritulations! You invented Teether ;) It works just like your scheme. There is no problems to make this kind of algo as you can see)

@White sugar

I see the issue now, thanks. So perhaps by including the calculated value inside a block-chain (so centralized exchanges can't do anything else with it)... and/or having the de-centralized exchanges... Perhaps we are not there yet.


@svojoe
Yes, except that I want to have a constant positive slope, when compared to Teether (EDIT: Either in comparison to USD or BTC).

This would be the current dollar model with deflation instead of inflation. Tough to pull off without government controls.

@generalizethis
I see...  :-\

Well, I did want to know whether such a thing would be possible at all.  It would, and that is all good for just a start. I am sure that some clever model can be designed based on that idea so that there are no government controls.

Thanks y'all !

BTW this model with negative inflation (i.e. deflation) is very harmful for business and economics from macroeconomics point of view. It would lead to unstability. That's why it won't be accepted by governments (as well as crypto at all, especially now).

Deflation incentives smart spending, not mindless spending, like inflation does. Inflation doesn't make you value money enough. That is why with bitcoin (deflation) you only spend it if you really need it, because if you don't, you use the money you don't value as much (fiat) to buy groceries or whatever other things you may not even need.

the problem with what you've proposed here is that whilst you can expand the supply of coins when demand goes up, you can't reduce the supply of coins when demand goes down (not to say supply can't be reduced, just what's been suggested here doesn't imply that it can).

I did once try running some calculations on a hypothetical coin that would delete coins used in transaction fees and use variable block rewards to keep volume at a fixed rate but the problem is that cryptocurrencies regularly go up or down 25% per week, so you'd have to reduce the supply of coins by a huge amount whenever demand drops. the only way this hypothetical currency would work is either have ridiculously high transaction fees or run the risk of constantly devaluing itself too much. Decreasing the value of each individual coin is fairly easy but increasing the value is much harder.

If you wanted a centralized currency that increases in value, you could copy tether (central exchange buys and sells coins at a fixed value) but use something like transaction fees to slowly reduce the supply and push the central exchange price up accordingly but this would only be as much increase in price as there is decrease in coins so higher transaction fees would be needed for higher growth in value.

@NiallW

Why not simply generate accounts so that whenever a transaction is made TO account, the overall supply increases by that many coins, and when coins are pulled FROM the account, the overall supply decreases by such an amount + the decay rate per account ?

I know that it is easier to say than to be done, but just hypothetically speaking.

The overall supply can be calculated by going trough a block-chain. The thing I am not certain about is how to make the supply be infinite and not finite like BTC (and at which point would the supply grow without a decay or burning?) - I have no idea.

No it doesn't exist

:)

Nothing is resistant to pumps and dumps. Neither in crypto and also not in forex. Even bitcoin is pump and dump. You should study about market cycles in depth. How and why news is orchestrated to pump prices and also news is again created to dump stocks. A latest example is how China FUD led to dumps in bitcoin price. Everything is in thin air.

Since the prices are determined by sellers and buyers in an open market, it is impossible. Of course the amount of fluctuations varies in different coins.

bitbay

 rolling peg system that is almost done is exactly aimed at this.

although most traders here love the pump and dumps i mean this is where most make/lose most of their btc.

I am guessing though real businesses would like a more stable currency.

You are right in a sense that a Pump is an investment and a Dump is a withdrawal. A currency that does not allow either is not really a currency.
I would gladly learn more about the market cycles, should you have any material to provide.

What if the cycles cannot be avoided but simply broken into random pieces so that there is no way to know when the pump will occur ?  I think that would prevent the pump and dump behavior.
What if we could provide people with data about what to expect from the coin's future, and when to expect it?  I think the currency would become hype and media-resistant.

I am making a web-page, and will soon start writing a white-paper for anyone to edit, contribute, steal from, join with, etc.
Link will be posted soon!  I am thinking about naming the coin "INKEY$", still any suggestion is welcome.

not really sure I fully understand the example you've given there.

If you use economic theory, price is worked out using supply and demand so in theory, you can fix the market value of something by constantly adjusting the supply to always meet demand. You might be able to use formulae used for estimating velocity of money to create an algorithm for estimating exactly what the change in supply needs to be. Manipulating supply won't be perfect as you'd have to wait maybe a few weeks between the supply being adjusted and market forces reacting to it but it could give long term price stability.

You could also have the currency look up the sales value on exchanges and adjust the supply to push it's value towards the optimum but this relies on exchanges which means it can be indirectly manipulated by someone messing up the price on the exchange.

I think you'd have to have potentially infinite inflation when prices are too high and some mechanism that encourages saving when prices are too low, or a system that creates new coins when prices are too high and incentivizes users to destroy coins when prices are low, maybe something like have two currencies (coins and shares) where users can trade coins for shares but can't turn shares back into coins (so coins get taken out of circulation whenever shares are purchased = deflation) and then have a proof-of-stake system where users with the most shares can "win" and get paid in coins.

Thank you, I admit that I have no background in economics, that my claims might not be entirely correct, but I do understand that the human factor cannot be fully avoided and price adjustments may be slow. I also know that some things currently do not quite work the way I mention them, but it doesn't mean that it is impossible to accomplish.

I have given it some thought this morning, and the only way I can think of making the pumps and dumps not work with a coin is to do the following:
-There is no decay (that is, the supply does not become lower over the time), forget that I even mentioned it.
-When person buys 10 coins (lets say), they also increase the supply by 10.
-When person sells 10 coins (on some exchange to BTC lest say), they decrease the supply by 10.
-For each transfer of n coins from account A to account B, account A gets k coins removed and B gets k coins added, given that k is the amount added to a total supply (when A bought their coins). When A has zero coins, the k value is therefore a zero too.
-Miners can burn only a certain amount of accounts' coins (per day, overall) that they encounter, and accounts are chosen randomly. Burning the accounts' coins means that should a miner encounter some account B, the previously mentioned k amount becomes a zero, and supply gets the amount k subtracted (completely from an account). Therefore, when A transfers 10 coins to B, they transfer the k value as a zero. This also means that k is either a zero or the amount that is transfered or the minimum amount that A has.

-Since the mentioned burning is limited per time period, there will be a queue of accounts whose additional supply coins can be burned. Since there is a queue, we can easily analyze the block-chain to know the final supply after the whole queue is processed as well as the investments (we can also keep a history of this) and represent it as a valid market prediction. This way, media and politics cannot influence people's decisions, when they would know exactly what to expect.

I don't see a reason to introduce two or more currencies that work as one, we can just adjust the accounts and how they behave.

This way, the pumps as well as other investments can occur, however, since nobody will know when the pumps will occur, it will not be worth the risk, and therefore people will avoid such a behavior.


Anyway, I think that this could work algorithm-wise, but like you said, there is really no way to have a 100% accuracy in the real-world.  Still, I think it is worth a try.

Yes, a coin that does not pump or dump does exist.  You will first need create your own coin and keep it all to yourself.  The future of the coin is in your own hands.  No one else can manipulate it.   :)

I hardly call disjointed cause and effect a manipulation. But sure, you don't have to take me seriously, I was asking for an opinion only, and if that is how far it goes, than I am thankful for it.

I have personally only seen one alt with this sort of concept. It is only trading at Novaexchange and Yobit. But it is only successful because I think only 2 devs and a handful of miners are the ones just really propping up the price. It is not realistic in the real world. And it will surely collapse as soon as the holders want to cash out.

Thank you, this kind of input is the most valuable. If you manage to recall the name of the coin, I would like to look into it more.

You should need to explain the things then say that it doesn't exist because many people are here that they are making comments without information i would like to know about the things. Because information posts can help everyone.

I think I read something about Estonia thinking about creating a national cryptocurrency. I suppose if this sort of thing does develop, it will help against p+d.
Another thing is that coins at the moment are all young and price is based on speculation. Once coins start to get embedded in real life and have not just potential use cases but genuine real world uses happening everyday, this will give people another reason to hold the coin, which should mean more stability.

There can never be anti- pump and dump coin. Human behaviour is complex. Some people don't even know what they are going to do in the next minute. When it cone to trading all sort of emotions and logic come to play. The winner are those  who recognises this power play within themselves and use information about themselves to their advantage

A centralized system is what I picture as well. Having a price of the coin set as a static amount would draw people away from the coin.

 
[/quote]A centralized system is what I picture as well. Having a price of the coin set as a static amount would draw people away from the coin.
[/quote]

Why not have an algorithm that calculates the price (miners), and then simply embed the price into a block-chain data, so that people can see what the last calculation was just by looking at the block-chain. Then, they can easily calculate how much the exchanges are ripping them off.

If you refer to a currency with a fixed value, such a thing does not exist. Any currency has the value that people pay for it.
Any currency or asset will be subject to P&D, the difference is that those with bad distribution and no intrinsic value will have more dumps than pumps in the long run.