Bitcoin Forum

Hello all,

Just musing on an idea that I had while sinking a few cold ones yesterday. Not thought through to any great depth, and possibly fundamentally stupid, but here goes.... :)

Real currency works because it moves. Recession is when money moves more slowly, and boom is when money moves more quickly. Yes, I am aware that is far too simplistic, but nevertheless. Currency is there to be spent.

So what about a crypto currency that was based on a need to move? Coins kept in cold storage or unmoved for a certain period of time would "migrate" back to being mineable again. No more dead coins, lost wallets are not taking coins permanently out of circulation....

Value would be propped up by adoption as a real currency, which in turn would be driven by the need to move the coins on.

Stupid idea?

Rit.

PS: Oh, and I have no idea how one would go about creating a currency like this. I am no coin maker :)

It's a different idea wheather it works or not depends but theres only one way to find out.

Maybe idea is not stupid. But it wont work, as many buyers want to keep their currencies and hold for some time...

So I guess currency that you think about will not have many adopters

Yep, I hear ya. The inability to store it for long period of time would certainly deter some of the long-term speculators.

But that's also kinda the point. People holding onto Bitcoin for dear life and not spending it is what will ultimately drive the value of the coin down. If it's not being spent, it won't be adopted by vendors, making it less useful and desirable.

Only my opinion ofc :)

Oh, and it needs a name! Anyone got suggestions?

Rit.

If you turn it on it's head then all you are suggesting is a coin with perpetual inflation.

If a coin inflates by 5% a year then by keeping money in a cold wallet for a year you are 'migrating' 5% of your coin worth back to minable coins.  :)

Glerant - very interesting view! I admit I am no economist, and probably don't understand very well how currency even works in the real world, so this could br utterly flawed. It's just an idea :) But still, could you elaborate a bit?

Rit.

@ritual You are a keynesian. Please, cure your kleptomania.

You are confusing moving and spending money.
What is the point of moving money from an address to an other ? None.

You are talking about spending money. The best way to force people to spend money is to devalue or stabilise the value. The total opposite of Bitcoin and its clone because on long term their value increase.

@bitaxed: It appears that I am - there's a thing! :) Not kleptomania though! Never even heard of it before now hehe.

@superresistant: I assure you that I am NOT confusing them. I may have phrased what I wrote a bit simplistically, but I am not that naive. However, neither am I an economist, so perhaps the clarification was fair enough :)

And wrt to Bitcoin, while I can see what you are saying, the flaw there is that if everyone adopts the same attitude to Bitcoin - i.e. that it's value will increase over time, so HODLing is the best thing to do - then it becomes stagnant, which can only drive the value down.

I'm not trying to defend the idea or lambast Bitcoin, btw - it's just AN idea, put out there for discussion. Even if I come off looking like a total moron in the end, it's still worth it for the education if nothing else ;D

Rit.

I'm pretty sure that someone already did something similar to this. Anyone remember the name of the coin?

You had to at least move your coins (possibly back into your own wallet) once per year to prove that the wallet wasn't lost. If not, your coins would disappear and go back into the general pool to be mined again or something.

Just create a service that move your coin automatically and that's useless.

Alright, accepted. That too can be worked around though.

This thread actually highlights some of (finite) crypto currencies long-term economic flaws.

For example, in the case of Bitcoin, once all 21 million Bitcoins are in circulation the process of diminishing availability is in fact inevitable.

Most agree that this actually makes the remaining supply of Bitcoins even more valuable for a time i.e. rarity vs scarcity etc. and that you can still ofc spend 0.00001 of a Bitcoin etc.

However, this does eventually become an issue: "You cannot trade in diminishing intangibility", well you can, although not at an ever increasing level of 'value'.

When something finite isn't being produced anymore, eventually their will be nothing left. Fact.

Ironically, it is in fact the finite nature of Bitcoin that actually gives it most of its intrinsic value in the first place.

Yes we can't.  :D

...


I have also given much thought to this long-term 'problem' and looked at ways to try and avoid this situation without effecting this finite value.

We humans actually cause most of the diminishing availability issues; we loose our wallet passwords, we leave our laptops on the subway, we leave 0.00000001 transaction in wallets that we abandon because they are 'worthless' (which all add up eventually) and sadly we also die, sometimes unexpectedly and without leaving a last will and testament etc., ...

The solution ?

See: http://www.theatlantic.com/technology/archive/2013/04/google-death-a-tool-to-take-care-of-your-gmail-when-youre-gone/274934/

"Google has now rolled out a technological solution, a euphemistically titled "Inactive Account Manager" tool ("Control what happens to your account when you stop using Google," the company says, i.e. die)."

This is where the best solution is probably found. A wallet should contain a slider where its owner selects a period of time that determines if coins from the balance have not been spent within X duration and then automatically 'will' the balance to X specified address.

It would also be possible to do this against coin age i.e. something similar to a proof-of-stake mechanism - we can call this a Proof-of-Transaction

Again, if coins have not been spent from the balance within X number of years then the balance would be automatically spent (perhaps distributed as transaction fees over time) and would therefore go back to the miners and back into active circulation. The 'default' value could be set at 100 years.

This is actually very difficult to implement as it is vulnerable to something similar to a time travel attack on the blockchain, as well as numerous other factors.

  :)

wow, great post...nice to see one of the heavy hitters weighing into my humble discussion :)

Yeah, I agree - the blockchain idea in it's current form couldn't handle this type of implementation - it's too close to reversing a transaction. The slider idea is a damn good one though...it could just be implemented as an automated transaction I suppose. However, the downside is that everyone would automatically set it to 10 thousand years or something :/ I guess the way around that is to make the maximum length of time rather small (comparatively). Of course then people would simply make auto-systems to get around that too...which I guess you could solve with a system which enforces interactivity (a captcha would be an over-simplistic example).

Sorry for Tolkien-esque sentence above. Musing out loud.

Times like this I wish I was a cryptographer/coder genius. I'm sure the idea has merit...

Any input appreciated! Including "You're an idiot, Ritual" (which I now know is going to pop up in a post within 30 seconds :P)

Rit.

There is already demurrage, but that just destroys them instead of making them mineable again. Basically backwards Proof of Stake

Just read a little on demurrage. Interesting!

I'd favour a return of the "dead" coins to the supply though. It makes mining viable for a very long time, and mining validates the transactions, so it seems like it would add some long-term interest for the treasure hunters.

I think it'd also help with the coin being adopted, as the perceived disadvantage of not being an early adopter would be much less severe.

Definitely learning by the seat of my pants today, probably picking almost everything up wrong, but this topic is the most interesting conversation I've had all month :P

Rit.

So is anyone working on a coin of this type? Seems like it would be a fairly big project - definitely more than cloning another scrypt coin.

If so, I would like to be involved :) I am no coder or technician, but I can write - might be of some use for docs or tech copy.

Rit.

Errr. Ever heard of freicoin

So you're just now becoming aware of a basic topic in the economics of currencies after thinking that you had invented it independently but you'd still like to go forward on making your own anyway? Do you understand why that's not a good idea?

inflation is not realy good for a coin. sure it is natural, bot not when percents goes up...

Freicoin

Is this the second or the third clash we've had? Aggressive little arsebiscuit aren't you? Nevertheless, I'll answer you.

Yes, I am now just becoming aware. I consider it an education, and am happy to learn even a modest amount about it.

Do I still want to go forward? Yes, of course - that's the nature of evolution, both biological and intellectual.

Making my own anyway? No. As clearly stated. I can recommend some really good resources on learning to read, if you need them. Whoever helped you write that, or transcribed it from crayon for you, or whatever, can no doubt help you through your ABCs. Sorry! I accidentally delved into an ADVANCED topic there - perhaps you should start with the basic grunts and hoots.

Understanding of why it is not a good idea....hmm. Well, that's why I started the thread. Some people that very clearly know what they are talking about have commented in some detail, outlining the pros and cons. All of these I accept as an education I am pleased to receive for free. But you....well, you haven't really added anything, have you? If you're under the impression that your mighty intellect is somehow aware of something which could not possibly be more obvious to us unwashed masses, were we not cretins, then good for you! I can pretty much assure you that that view on life won't work out well ;)

So! With that all said (*phew*), thank you again to all of the people who have contributed positively in this thread, and apologies if I came off as a tad frustrated just there.

I'll check out Freicoin - thank you to the guys who suggested it!

Rit.

Clearly stated where? I don't see it.

To save you some time, allow me to explain why demurrage will never work. Let's say we have coin A and coin B. They are both near-exact clones of Litecoin, except coin B automatically imposes a 4.89% annual demurrage rate on all holdings and coin A does not. As an economically rationally individual, what is my incentive to use coin B? There is none. Even if it would be better for the economy as a whole if everyone used coin B, it is incompatible with the individual's incentives and so it has no chance of getting to that point. The only way that demurrage can work is if people are forced to use a demurrage-based currency above others that better preserve their wealth. The moribund state of Freicoin should prove my point.

First post. Not edited - you can check that.

The whole thing was only to open discussion.

In any case, you are clearly more well-read on this than I am, and also have obviously researched the issue. That's fair enough - I respect your comments, and I can see your point.

Thanks,

Rit.

I guess I didn't interpret that as a clear statement of your commitment not to pursue making such a coin. I don't even remember responding to one of your posts before this thread so I'm sorry if I come off as an "aggressive little arsebiscuit". I simply wish to see an end to the rampant cryptocurrency inflation caused by altcoin flooding.

Freicoin tried (trying) the same principle. Somehow it wasn't a very popular idea.

@anti-scam: Understood completely. I apologise for my rude remark - it was impulsive and ill-considered.