Bitcoin Forum

We're asking for your help in creating a new crypto-currency, once with real value and lasting benefits. The idea of a demurrage currency has been raised before on this forum, but for those unfamiliar the idea is simple: apply a continuously-assessed fee to all accounts (4.4% APR, in this case), and distribute the proceeds from that collection to the miners.

Why on Earth would anyone want their money to lose value? The rationale is to separate money-as-a-store-of-value, a purpose Bitcoin serves very well, from money-as-the-medium-of-exchange, for which inflation/demurrage has significant benefits. These two functions are inherently at odds with each other, and there exists a rational economic theory put forth by Silvio Gesell a century ago which says that separating the two will cause (through economic self-interest) a lot of the ills of the current financial system and its effects on society to be fixed.

We're putting forth a proposal for a new crypto-currency with integrated demurrage and a few key improvements to the client (including trust-less block-chain pruning), which will be back-ported to Bitcoin as well. You can read the full details below.

To be clear, this is not a competitor to Bitcoin. Should Freicoin be successful, Bitcoin will retain its critically important role as a long-term digital store of wealth. Should it fail, that would only validate arguments for a deflationary rather than an inflationary/demurrage currency.

We've been working on prototypes and proof-of-concepts for these and other features over the past year, but unfortunately the demands of full-time jobs, family, and other commitments has meant progress occurring at a relatively glacial pace. We're seeking your help to make this currency and associated Bitcoin improvements happen A.S.A.P. We've created an Indiegogo campaign (http://igg.me/p/135979?a=761158), and are of course accepting bitcoin donations as well, at the following receiving address:

Donation address: 1HzH4YtFwBQXyF2NCCwyY2qFCCsBsmdN3j
Contribute with fiat: Indiegogo Campaign (http://igg.me/p/135979?a=761158)

GOAL: $28,000 USD

Here's the text of the campaign (geared towards those who may not have heard of Bitcoin), followed by the pledge rewards and a FAQ:


Freicoin is a decentralized, distributed electronic currency designed to address the grievances of the 99% movement and correct the excesses of the 1%. Whereas inflationary currency like the U.S. Dollar or Euro are controlled by central bankers under rules that benefit the establishment, Freicoin would be completely decentralized and self-regulating, with fees on stagnant or hoarded money (demurrage) paid in proportion to those community members who contribute work to secure the currency. It is an opt-in alternative currency to be used first by Occupy-supporting businesses and supply chains, then spread to the surrounding community across the globe. It includes a downloadable client for Mac OS X, Windows, and Linux, and an electronic network for transferring funds denominated in Freicoin world-wide.

Why

Demurrage currencies (http://en.wikipedia.org/wiki/Demurrage_(currency)) like Freicoin align incentives of bankers and financiers with the priorities of working class, forcing the wealthy through their own self-interest to invest in growth, jobs, and ventures with long-term thinking. An economy based on demurrage currency would not fall victim to to the same greed, excess, and short-term thinking that led to the 2008 crisis and financial collapse. Freicoin would instead continuously stimulate global growth through reinvestment, and dis-incentivize the hoarding by the 1% that caused the “credit crunch”.

The current systems of money, including the U.S. Dollar or Euro, are and always have been used to store value--money seen from the point of view of the holders, the wealthy. Freicoin emphasizes instead the view to that of the producer, the proletariat, the 99%: money as a means of buying the goods and services necessary to sustain life. These are contrary purposes--money cannot function properly as, nor should it ever be both a means of saving and exchange; it cannot be both accelerator and brake at the same time. Indeed, this confusion and conflict over the purpose of money is what led to the financial collapse of 2008 and the extended recession that followed.

Demurrage forces the entire stock of money to circulate irrespective of the desire of the wealthy to accumulate and store; banks, financiers, and corporations can no longer hoard money waiting for higher interest rates or a more favorable investment climate as the demurrage acts as a tax on stagnant money. Money is eternally losing value, so the incentive is to spend it as quickly as possible on the necessities of life or to invest in longer-term ventures that also provide stimulus for a growing economy, typically creating real jobs in the process. Real money becomes a sort of “hot potato” that is passed around as quickly as possible, in a virtuous cycle of investment. No longer are there incentives for financiers to withhold credit from those in need simply to what for fairer economic winds.

For the 99% who live paycheck-to-paycheck, the loss from demurrage is minimal and would be compensated for in wages and pricing. For those who manage to accumulate some savings and for the 1% who receive much more income than they reasonably spend, they can either save real wealth (gold, silver, Bitcoins, real estate, artwork and fine wine, for example) and accept the obvious limitations of wealth saving (loss, storage, rot, fire, etc.), or they can loan it out to borrowers at what ends up being near-zero basic interest. With sustainable near-0% interest loans the order of the day, businesses will boom and the economy will grow in a virtuous cycle.

How

For the past year we have been working in our free time to produce a proof-of-concept prototype based on improved and expanded Bitcoin technology. The prototype is a re-implementation of a generalized form of the Bitcoin protocol which makes possible advanced features like demurrage, multiple currencies existing side-by-side (Bitcoin and Freicoin), and other improvements for future scalability. Extensive unit tests demonstrate the validity of this core component.

• What is Bitcoin? Bitcoin is a decentralized, peer-to-peer internet currency secured by strong cryptography and an open-source development process, and the foundational technology underlying Freicoin. Bitcoin enables anyone in the world to send funds to anyone else with minimal, fair fees on both consumers and merchants. Bitcoin is democratic in that everyone who uses the currency takes part in securing it (making sure the rules are followed and there is no fraud) by running a software program on their computers; they are proportionally compensated for this effort by collecting transaction fees, and in the case of Freicoin, demurrage. For more information about the benefits that come from basing Freicoin on Bitcoin technology, see the Bitcoin advocacy site We Use Coins (http://www.weusecoins.com/).

What remains to be done, and what this campaign will fund is the following:

• Implementation of a block-chain pruning technology, reducing storage requirements and startup time and eliminating a major impediment to wide scale adoption of Freicon (and Bitcoin, for that matter).
• Re-purposing of Armory, the most advanced and user-friendly Bitcoin client, to work with Freicoin in addition to Bitcoin.
• Public-facing website and always-on “seed node” to help new users download the combined Armory/Freicoin core software and get connected for the first time.
• Initial “merged mining pool”--a service for Freicoin users to help secure the currency and receive rewards/compensation for that service.
• A Bitcoin/Freicoin exchange to enable supporters to convert existing funds into Freicoin (by first buying Bitcoin and then Freicoin).
• An animated film explaining what Freicoin is, what it does to fix the problems of the financial system, and how people can get involved in using and promoting it.

Once the above objectives are reached, Freicoin will be ready for adoption by Occupy groups and supporters, and other like-minded groups. The work can then begin to get Freicoin adopted as the first “global community currency”. As a peer-to-peer application, once completed Freicoin can be used by anyone in perpetuity without any required ongoing maintenance.

At the completion of this project Freicoin will be ready for individual communities to adopt, for businesses to accept as payment and for consumers to use. The initial freicoins will be in the process of being generated and fairly distributed to community members who participate in securing the network.

This campaign will directly pay for hardware and server time cover the first year of operations, materials used in the logo, branding, film, and initial marketing, and to keep the basic necessities of life as we decline contracting work to focus on Freicoin.

Join us and be a part of the reformation of global finance!

GOAL: $28,000 USD

Fiat donations: Indiegogo Campaign (http://igg.me/p/135979?a=761158)
Bitcoin address: 1HzH4YtFwBQXyF2NCCwyY2qFCCsBsmdN3j

$1
BACKER
Everyone gets access to the project upon public release, and a chance to participate in the creation of a new global economy.

$10
SUPPORTER
Our heartfelt thanks and your name in the credits of the official client.

$30
PHILATELIST
Receive a custom post card designed by the developers and sent from Silicon Valley with a personalized message of gratitude.

$80
T-SHIRT!
A beautiful silk-screened “Occupy Freicoin” T-shirt (add extra $10 shipping to Canada and $15 to other non-U.S. destinations).

$150
IMMORTAL
You will be immortalized in the genesis block of the Freicoin block chain, where your name or short message will be preserved forever in the historical record.

$500
FOODIE
Dinner with the developers, their family, and other backers in the Silicon Valley/S.F. south bay-area (transferable if you know someone who lives or will be in the area at the appropriate time).

$750
ACTOR
Cameo appearance in the animated film introducing, explaining the Freicoin project and how to get involved.

$1,500
VISIONARY
Membership in our advisory circle--a group of visionaries that will meet (virtually) approximately once a month to be informed of our current efforts and from which we seek ideas and inspiration.

$3,500
SPONSOR
Membership in our advisory circle as well as recognition as official sponsor of the Freicoin project. Your logo, business name, or other mark belonging to you will be featured prominently on the official public-facing Freicon website.

What is “Freicoin”, and how does it work, really?

Freicoin--literally “free money” in German--is based on the principles of economist Silvio Gesell's (http://en.wikipedia.org/wiki/Silvio_Gesell) Natural Economic Order (http://www.community-exchange.org/docs/Gesell/en/neo/). Freicoin is an electronic currency managed through a self-regulating, distributed electronic network based on Bitcoin technology. The network enforces a continuously assessed 4.4% APR fee on all account holders. This fee acts as a tax on stagnant money, driving up the rate at which money flows through the economy and acting as an economic stimulus, and discouraging unproductive hoarding by the 1%. The proceeds of the demurrage tax are repayed transparently and proportionally to the community members who donate computer time to running software that regulates and enforces the rules of the network.

Besides providing a virtuous cycle of rewarding positive long-term investments, demurrage currencies also reduce interest rates to near-zero (hence the “free money”), providing further job-creating stimulus and helping to reduce the magnitude of the boom-bust business cycle.

Where can I learn more?

Here are some resources:

• Silvio Gesell's Natural Economic Order (http://www.community-exchange.org/docs/Gesell/en/neo/) is the definitive work explaining the value and utility of demurrage currency, or what Gesell calls “Freigeld” (“free money” in the English translation) in fixing the ills of the financial/monetary system.
• The Political Economy of Silvio Gesell: A Century of Activism (http://findarticles.com/p/articles/mi_m0254/is_4_59/ai_68704400/) by Werner Onken is an academic article published in the American Journal of Economics and Sociology gives an overview of Gesell's work and it's influence over the 20th century.
• Aberrations of an interest-based economy: An excursion through the covert (http://www.finanzcrash.com/english/aberrations.html) by Jürgen Probst is a more recent (translated) pamphlet predicting the excesses which led to the 2008 financial crisis, and showing how demurrage currency, among other things could have prevented it.

You've based it on Bitcoin technology. Is this a competitor to Bitcoin?

Absolutely not! The two serve quite different purposes. The properties of Bitcoin make it analogous to precious commodities like gold or silver, and it will always function as a useful store of value. Freicoin, on the other hand, is meant to be used as a medium of exchange only, kept on hand just long enough to provide a cash-flow buffer. The demurrage fee encourages recipients of Freicoin to put their money to use as soon as possible in an exchange (even by buying bitcoins, for example), whereas the deflationary nature of Bitcoin rewards hoarding and serves a different purpose as a long-term store of value.

How is this different from that other Occupy currency?

There have been a couple of monetary reform ideas floated by members of the Occupy movement, but most likely you are referring to “OCCCU”, another demurrage currency created by students at the Vorarlberg University of Applied Sciences and presented to members of the Occupy movement at Davos in January, 2012.

OCCCU's provision of “basic income” and the assessing of demurrage fees is accomplished by means of centralized regulators, the currently faceless OCCCU “general assembly”. This is hardly an improvement over the current system of centralized banking; as the great poet Pete Townshend once said: “meet the new boss, same as the old boss”. It is our firm belief that real monetary reform will only come when the system does not require trust in any individual or organization, and when all operations are made transparent. Freicoin accomplishes these goals with distributed self-regulation and automatic distribution of the demurrage pool on a fair and proportional basis.

Who are you?

There are three of us that have come together to make this possible: engineer Mark Friedenbach, designer Aaron Blumenshine, and project manager Matt Everingham.

In his day job, Mark is a application developer at NASA. He builds large data visualization applications as well as web and database backends. Aaron is an accomplished and award-winning photographer and graphic designer. Matt is an aerospace engineer and project manager, also at NASA, who has designed and built a series of low-cost exploration rovers controlled over the internet.

We became aware of Silvio Gesell (http://en.wikipedia.org/wiki/Silvio_Gesell) and demurrage currency (https://en.wikipedia.org/wiki/Demurrage_(currency)) through our research into Bitcoin, and for the past year we have been developing the prototype and proof-of-concept mentioned above in our free time.

Will it be open-source?

Absolutely. In fact, the transparency provided by an open-source client is essential to the basic ideals of Freicoin and the Occupy movement. That said, it will certainly be possible to build closed-source software and businesses on top of the open-source Freicoin core.

I don't think there is a demand. I enthusiastically proposed something like this long ago and it was completely shot down. And that was without asking for $28k in donations.

The pejorative name given it was "Inflatacoin".

I stopped reading here. You can't prevent the accumulation of wealth. How would Freicoin prevent people from hoarding dollars, gold, or bitcoins?

Is this anything like the Occcu? https://bitcointalk.org/index.php?topic=62983.msg735930#msg735930 (https://bitcointalk.org/index.php?topic=62983.msg735930#msg735930)

Inflation is simular to how scientists "stimulate" lab rats to solve puzzles by using electroshock. Why do you expect from people to volunteer to use it?

Yeah, well that's the main reason for the explicit Occupy tie-in. A demurrage currency would solve or prevent a lot of relevant problems that a lot of people care about, but not anyone on this forum it seems.

“Inflatacoin” as a pejorative belies a fundamental misunderstanding of macroeconomics. I don't like the effect inflation has on my savings. But I do appreciate that the pressure of inflation has caused investment and productivity innovation that has greatly improved my life and perhaps even brought my day job into existence.


Then you should have kept reading because the very next paragraph addresses that point. Freicoin does nothing to prevent the accumulation of wealth, nor would that be a desirable outcome; I'm a libertarian, not a communist. You just don't save with freicoins; use bitcoin for that.

In an ideal world, I would have a “checking account” denominated in Freicoin where I receive my paycheck and from which I draw on for daily expenses, and a “savings account” denominated in Bitcoin. Does that make sense?


Addressed in the 3rd-from-the-bottom FAQ, but in summary: OCCCU is centrally controlled by a faceless “general assembly” that decides how much demurrage to take out of people's accounts, how much “basic income” to dole out, and what to do with the proceeds.

I find that utterly repulsive. You should own what's yours, and no one should be able to take that away from you or change the rules at a later point in time. By using Freicoin you opt-in to the demurrage, which is assessed according to the unchanging network rules and distributed fairly to miners, but that's it and no one can change the rules on you later on.

Maybe I have the misguided hope that enough people will be willing to look at the big picture and realize how both deflationary and inflationary currencies have significant problems, and that by separating the two (save in deflatacoin, spend in inflatacoin/demurrage), will create a virtuous cycle of investment that will do more to improve their financial outlook than the pittance of demurrage assessed against their stock of freicoins for day-to-day purchases? I.e, would they rather have a high-paying job in a booming industry at the cost of a fixed low-percent tax on money that they don't invest, or a good chance at no job at all in a prolonged recession?

No. What problem would it solve to have a “checking account” denominated in Freicoin and not in bitcoin?

I think Silvio Gessels whole concept of "demurrage" is questionable. Forcing people to spend their money, does NOT create any more goods or services. Society does not get any richer, if money sloshes around faster.

Wealth is created by production, not consumption. When we can make things cheaper and faster, with less labour or energy, then there is more stuff to buy and everyone gets richer.

The inequity of the present fiat system, is because insiders have preferential access to credit, allowing them to benefit from inflation. Bitcoin has already solved that problem, so Freicoin is not needed.

Still, Freicoin is a worthy experiment, and I wish you luck.

Part of what convinced me that the idea was doomed from the start when I presented it the first time was the observation that people actually DO care about the "There Will Never Be More Than 21 Million Bitcoins" part as a core attraction.  Inflatacoin lacks that appealing attribute, even if the truth of the matter is "You Will Be Long Dead Before There Is Ever More Than 21 Million Inflatacoins".

I would venture to say that's so important, that without it, Bitcoin is just another kind of dollar that isn't even a dollar.  It may as well just be digital Monopoly dollars.

And why $28,000?  Bitcoin is open source software.  Just fork it, give it a new name, make the 2-3 lines of code changes needed to make it into inflatacoin, forge your new genesis block, release it into the wild, and see what happens.  Total cost, $0.

Exactly, +10,000.

maaku, is this parallel to developing a blockchain for trading computation, or is this your main project, now?

  On average per capita, sure, but it evens out the distribution of money, which does lead to a more vibrant economy with more opportunities for innovation.

I think the number of Freicoins will be fixed at 21 million, just like Bitcoin. The difference will be, that inactive accounts will have 4.4% of their balance stripped off each year, and redistributed back to the miners.

At least, thats how I understood the OP.

So, this is Bitcoin, where a percentage of your money is taken away every so often. The goal, supposedly, is to make Freicoin a better medium of exchange than Bitcoin, but how is it going to accomplish that? If the only real difference other than some behind the scenes blockchain pruning is that money is taken away to pay the miners, I can see no incentive to use Freicoin over Bitcoin, even as a medium of exchange.

As an employee, do I want my paychecks in bitcoin or freicoin? Bitcoin, because it won't decay even the slightest amount or hold me back while I'm saving up for my larger summer vacation.

As an employer and small business owner, do I want to keep my funds in bitcoin or freicoin? Bitcoin, because my employees want to be paid in Bitcoin, my small business needs to store a good amount of funds in reserve, and profit margins are slim enough as it is.

As an owner of a business trying to sell things, do I want to sell my goods and services for bitcoin or freicoin? Bitcoin, because all of my funds are better stored in bitcoin to begin with, and since everyone's getting paid in bitcoin, nobody's going to want to convert it into freicoin just to buy some food.

As a member of the financial elite (1% or whatever), would I want to use bitcoin or freicoin? Bitcoin, because 4.4% annually off of my amount of money gets to be pretty significant.

The only thing that would make this work is if business owners realize that freicoin encourages rapid spending and switch to it anyway, despite the flaws, in hopes that their currency choice draws more people trying to rid themselves of money than they lose for using freicoin to begin with. Even then, the 1% freicoin's trying to hurt will look down at freicoin and laugh as they keep their massive hoards to themselves. It's going to be the small businesses and normal people trying to save money over multiple years who will be hurt by this.

Bitcoin works because it gives equal ability to all of its users, and is completely voluntary. Everyone who wants to use it can do so, and the network treats their transactions the same way as anyone else's. Freicoin retains the voluntary nature, but then specifically intends to hurt a specific group of people who will take advantage of their ability to choose and completely ignore it. Freicoin could work as a completely government controlled currency designated as legal tender, with laws requiring everyone to hold their funds in it. What's the difference, then, between Freicoin and simply levying an additional 4.4% tax on everyone? Why make it a part of the currency and not part of whoever's implementing taxes to begin with? I simply don't see Bitcoin's decentralized, voluntary network working well with taxation.


In that ideal world, I would use my "savings account" for almost everything I do. When I want to buy something, I take advantage of nearly instantaneous transaction times to send my bitcoins to an exchange, turn them into freicoins, and then buy my item. I'd never give it a chance to take my money away. We could solve that with some government regulation taxing bitcoin->freicoin conversions, or installing some minimum waiting time before spending acquired freicoins, but that's completely against the point of the structure of Bitcoin, which is mainly being preserved for Freicoin.

Sorry about the long, rambling, and unedited post.
TL;DR: Despite the change to Freicoin, Bitcoin is still a better currency for being a medium of exchange. Because people aren't forced to use Freicoin, the 1% who would be hurt by it get to avoid it altogether. Freicoin's philosophy is directly contradictory to the structure Bitcoin is built around, without making any changes to that structure.

P.S: So, 4.4% of all freicoins get redistributed to the miners annually. Who are the miners? Most likely the rich elite who can afford to buy massive ASIC farms. If Freicoin were to be successful, that 4.4% would end up going straight back to the rich.

I agree with the premise but not the conclusion. The creation of wealth requires entrepreneurship, and entrepreneurship requires capital. In a deflationary universe getting investment requires being able to beat bitcoin's ROI, since the investor's alternative is to buy bitcoin and sit on it. Depending on how bullish you are about bitcoin, that could be a tall order.

With Freicoin, on the other hand, if all you can do is break-even, you are already ahead. It'll be MUCH easier to find investment in Freicoin. (And before anyone says “but you could just buy bitcoins with freicoins!”--that's true, and it will be compensated for by the Bitcoin/Freicoin price.)


A chief value of Freicoin would be in eliminating that inequity--demurrage has a similar pressure as inflation, but is assessed fairly against all. But I do not agree that elimination of inflation entirely is a good thing.


Agreed. But that's why Bitcoin is a non-perishable commodity/store-of-wealth, and will, IMHO, *never* be a viable currency. Bitcoin is valuable for what it is, but it's properties are only well suited for a currency if you believe in the gold standard (I don't).


For inflatacoin/expcoin, yes. Demurrage throws a few kinks in there that make it slightly more difficult in terms of user interface and such since accounts are continuously decreasing in value. But that's not where most of the money will be spent.

The other things we will do is definitively solve the blockchain pruning problem, which is currently being discussed in the technical subforum and would be back-ported to bitcoin, and provide a website, animated video, and marketing materials to explain Freicoin to the non-bitcoin crowd. All of that takes time and money, and for some of resources we don't have in-house.

Still working on that, but it's a different project. Doing it “right” would take a bit of effort, more than Freicoin, so it's on the back burner for now. But we are moving in that direction.

Sorry, but the whole concept of artificially implementing demurrage into a a mechanism of trade and value storage is antithetical to what having a free-floating value is. It is not a means to keep currency flowing around in the economy, it is a means to have an authority (be it your General Assembly, or your blockchain structure, or your whip-yielders in government) to force the loss of value over time. Those in such an economy, having only the ability to spend to avoid an artificial devaluation of their labor or investment, will actively seek an alternative to that economy. Far from investment in entrepreneurial experimentation, a demurrage-based coin will do nothing but bolster all OTHER currencies as a means to avoid having an external power destroy some of the value of my work.

I salute the outside the box thinking, but the reality is, just as with the Occu, this is just a way for a proto-nomenklatura within the Occupy movement to try to find a way to game the economy and find gross profits for themselves, while cloaked in the rhetoric of the revolution. $ 28,000 for branding and development? You couldn't find one earnest programmer, host or product design expert in the movement who would gladly give you free labor and resources in exchange for being in the bleeding edge cadre of the 99%? Nobody wants to work for pay that declines automatically over time? This sounds more like a creative approach to try to fleece $28,000 out of simple-minded sympathizers who will believe that crowd-funding this kind of absurdity is a blow against the empire. And that smacks of elitism, exploitation and all that Occupy holds evil and wrong.

The current banking system already offers this feature anyway. Open an account at Chase, stick $1000 there, and it will be eroded by fees (e.g. minimum balance fee) until it is gone. Nobody is going to stick their money there even if thoroughly convinced that they are "taking one for the team" (for the whole economy) by doing so.

Besides, how would this work? Mom gives son 35 inflatacoins to pay for soccer registration, but by the time he gets there to sign up, he doesn't have enough because he only has 34.99982731 left.

Also I probably shouldn't call them inflatacoins as they are actually evaporating like dry ice.  Or rather, decaying like radioactive substances.  Dry ice coins?  Decayingcoins?  Half-life coins?

Thats actually a pretty good answer for a leftwinger. You must be one of the 0.0001% within the Occupy movement that actually understands economics.

If you give 4.4% of the value of peoples savings, back to the miners as compensation for their work. But you still have an overall finite number of Freicoins. Then that currency will still be a better savings vehicle than most fiat currencies around the world. Major currencies like the Brazilian Real and the Indian Rupee typically lose around 7% of their value every year.

I wish you the best of luck with the Freicoin project.

If you want to erode the value of all coins held, just "print" more of them at whatever percentage you want to erode at.  It's called inflation.  It's no different from your method of forcibly removing a percentage of all holdings and transferring them elsewhere.

The more important question is -- who gets the advantage of those freshly printed or forcibly extracted currency units?

In bitcoin it's the miners; and we bitcoiners all know that.  We understand that that inflation is the tax we pay to the miners for them to secure our holdings for us.  You will presumably not do that (which raises the question of how you're going to secure your coins), and will instead spend on centrally selected winners?

You objected to the Occu because it was centralised; Freicoin is no better, you're just using a decentralised cryptocurrency to funnel money to central point.  I've already got a currency like that it's called "pounds sterling"/"US dollars"/"euro"/$EVERY_OTHER_FIAT_CURRENCY_IN_THE_WORLD.

---

I've just read your giant post in more detail.  You are paying the miners the fee.  WTF?  You've made an identical system to bitcoin; but instead of paying miners from inflation you're paying them with a direct tax.  A new question then:

If miners are only paid by taxing existing holdings; how are you going to pay the first miner?  How are the freicoins being issued?  Do we "buy" them from you?

This would actually be funny if you weren't so obviously serious about it.  You've spent a year on this?  You poor deluded fools.

Track

Hmm.... How is inactivity defined? What if someone wrote a program to automatically transfer the balance every X number of days?

Demurrage is applied uniformly, not based on age (which of course would be easily avoidable). With each found block outstanding outputs are reduced by a factor of 8 x 10**-7 (1/1250000). Once difficulty stabilizes so that blocks are found with an average interval of 10 minutes, the comes to a cumulative rate equivalent to 4.4% annually.

Yes, I'd love to meet up with anyone interested and local. PM me.

"Brother can you spare a dime for the bus?"

"Depends on what time the bus departs."

How does the user get a sane experience when the balance is changing every 10 minutes?

Carry a few extra cents? Or more likely merchants will price their goods at slightly less than whole-dollar values, as they seem to do anyway. It takes about 2 months for $1.00 to turn into 99¢.

This is in addition to Bitcoin's current transaction fees, right?  Seems like demurrage would change that fee structure because-- at least in the end game of Bitcoin-- they pay for the system to operate and protect against spam, but with Freicoin you're already paying for the system through demurrage so you just need it for spam protection.

I don't get it. If I want to save Bitcoins, and the guy I'm paying wants to save Bitcoins, why would we convert to Freicoins and back just for the transfer? Or any optional inflationary* currency for that matter?

* Demurrage in this case appears to work exactly the same as an increasing block subsidy would.

i think demurrage is an interesting idea and has its place, but in lieu of a real response i will post this :) 

http://www.theonion.com/video/internet-scam-alert-most-kickstarter-projects-just,28655/

If I want 4% inflation I will leave my money in the bank....

I asked a similar question above and didn't get a reply either. Freicoin can only "work" if you FORCE people to use it.

"Gold is not necessary. I have no interest in gold. We will build a solid state, without an ounce of gold behind it. Anyone who sells above the set prices, let him be marched off to a concentration camp. That's the bastion of money." -- Adolf Hitler

Depending on the assumption that they somehow manage to force miners to include transactions: No transaction fees, miner income is paid from the demurrage.

Since the miners will probably anyways need a way to know how much money currently is on each account to pull out their annual 4.4%, they'll have to create a huge number of bitdust transactions each block anyways. Maybe they'll need to include currently pending transactions for that? Anyways, the number of inflation transactions is likely much higher for a long time than the number of actual user transactions...

I agree, this concept seems impractical to me because it would cause a huge number of transactions with each block. In fact, the transactions would grow O(n²), with n being the number of account holders.

If I run the freicoin client once a year will I get my portion of the 4.4%?  I would do that.

My first impression of freicoin was 'trick coin'.  The bitcoin elite are hoarders but the want a society with growth.  This is sort of like when the gold standard was lifted and the dollar was free floated. The analogy here is bitcoin is gold and freicoin is USD.

Right, that is a valid point. In the future when most bitcoins are mined miners will have to be compensated with transaction fees. But I'm far from convinced that the transaction fees would be so high that it would make sense to have a "checking account" denominated in Freicoin.

Money is information. That's all it is. Who owes what to whom.

Information is abundant. It's created with every transaction. It's not scarce, it's abundant, while at the same time not inflationary.

Now with today's currencies we cannot meet these requirements. They're impossible to reach with today's tools and technology, for all that we know. Today all money itself is scarce, has a price, be it fiat, gold or bitcoin. This shouldn't be. With an ideal informational currency, there for example wouldn't be any speculation with, as it's just information. But we cannot reach this perfection, only approach it.

Bitcoin is what it is. Maybe not perfect, but solves a lot of problems. To tackle what's missing, I believe an entirely different approach is needed, i.e. not a Freicoin building upon Bitcoin. Ripple comes close, but is based on peer-to-peer relationships of trust, but there are use cases for that (regional trade, business-to-business and supplier/buyer relationships).

Hence I believe it's a dual Bitcoin/Ripple economy that would approach perfection.

Excuse me, how can I buy a house with money that doesn't have a price?

There is the information of what others owe to you from the past, which you can use to (partly) "pay" those who build your house. If you don't have enough "credits", then you will create the information of what you owe in the future to those who build your house.

Again, it's all just information, and it should not have a price in itself. I know it's impossible as it's merely theoretical. That was part of my point I tried to come across with.

Two suggestions :

Save users and everyone else a lot of trouble and do your inflation with a block reward that adjusts with difficulty to maintain some reasonable rate. To me 4.4% is a bit aggressive so consider 2-3% after an initial 50 per block phase of a year or four.

Second, choose a new name. Forget about coin being in it and think of the name as your key sales tool. Freicoin is too German-sounding for US users.

Good luck.

That makes it awfully difficult to trade with strangers. It might work locally in parallel with a money economy, but I can't imagine it replacing money completely.

that's what i said myself more or less :·>

I guess that the most likely use case for freicoin could be that of entrepeneurs, and every other capital manager or borrower, who would prefer to be indebted in a money with the lowest possible price and interest rate. Most likely those guys would take the debt, put the money on safer shores (bitcoin, for example, or any real stock that they are trying to manage), and then they would be buying back the freicoins when they need them, when paying for products or services, or at least when they have to pay back their debt. So freicoin, as opposed to bitcoin, could be like a "debt apt money", and in it's use case would be complimentary to bitcoin, no opposed at it.

I don't know if it could work, but I think it could be an interesting monetary experiment. And I kind of like experiments...

I dont think you are making sense here. The information on who owes how much to whom may not be scarce at all, let it be public (like the blockchain). What is scarce, nevertheless is the credit people owe you. The owe it to you and only to you, making that particular piece of information unique and therefore laoded with value (the amount of credit you are owed). Isnt that what bitcoin is already, without the necessity of having to rely on anyone's liquidity (relying on the liquidity of those owing you credit)? Because the information the blockchain contains, basically is a record on how much bitcoin you have available to spend. AFAIK

You might find it easier to understand what he is talking about when you investigate Ripple:

http://ripple-project.org/

You're conflating the two points I wanted to keep separate, money as information and money as a unit in itself having value.

Maybe you're wondering how this information would be quantifiable without being target of speculation. Some local exchange systems (and also Ripple) use "hours of unskilled labor" for example (it's just an agreement, the rate against hours of other labor can individually be fluctuating, so it's a free market), but many other approaches are imaginable.

SUMMARY AND ANALYSIS

Hi maaku,

I appreciate your effort to build a sustainably economic system! (I mean it)

Bitcoin alone provides a nice savings opportunity, a great means of exchange and so on (we all know its merrits). The only problem with bitcoin is, that it offers no sustainable option for our economic future, as it is a deflationary currency by nature and slows economic activity down because people rather hoard their wealth than spend or lend it.

Thats where Freicoin comes into play. It sure would spark economic activity by its inherent inflationary nature,

BUT:
- people would be reluctant to use it, because of loss of wealth
- people would rather use alternatives, that INCREASE their wealth, rather then DECREASE it (e.g. using bitcoins)
- no apparent advantage over alternatives (like bitcoin) comes to mind from an individual point of view
- difficulties in determining which Freicoins would be taxed and which won't may turn out to be unsurmountable in the end
- it would also hurt the 99%'s savings, because in contrast to the percieved "1%" they have less opportunity to invest their capital. And
  THEY DO HAVE SAVINGS!

--> SO FREICOINS WOULD ONLY WORK IF THEY WERE THE ONLY ALTERNATIVE ALLOWED!

The same goes for any "Inflatacoin", basically avoiding the taxation problem and keeping the supply of it on a set rate (e.g. 4.4%)

WHAT FREICOIN WOULD IMPROVE:
- predictability of inflation, as money issuance rate is set and could not be changed
- is the elimination of the bank's/state's monopoly of money issuance (= bitcoin standard)
- distribution of the money supply in the community-> say miners (= bitcoin standard)
- anonymity of transactions (= bitcoin standard)
- duration of money transmissions (= bitcoin standard)
- cost of money transmissions (= bitcoin standard)
- blockchain pruning, which will likely be implemented in bitcoin's protocol also some time.

SUMMING UP: Freicoin won't change concentration of capital. It will stimulate the economy and create new jobs, but hurt the 99%'s savings more then the ones of the "1%". It has stark practical challenges to overcome. It offers no drastical technical improvements. Unexceptional use of it as legal tender will unfortunately not be enforced by governments in order for it to work. So it will never come to bloom. I value the idea, but strongly doubt the feasibility. Please keep improving of the concept, and as always:

Please correct me where Im wrong.

I also believe Freicoin would have trouble to catch on.

Von Mises said something along the lines that a commodity-based currency would have to be a good store of value first before becoming a medium of exchange. In that light, it can't compete against Bitcoin. Much like most other blockchains and forks, it will probably not gain significant value in order to become stable enough for its intended use.

Some regional currencies work with demurrage. This is to encourage spending the regional currency rather than the national currency and to push the local economy, and it works well. But it works because exchanging the regional currency back to the national currency is formally disallowed for consumers. Thus this is an authoritarian rule that cannot be implemented into a system like Freicoin.

I also don't agree with the notion that demurrage doesn't hurt the 99% as much like the 1%. Of course it does, it's basically much like today. The rich have plenty of options and room to switch to other assets. It's better than inflation though, because employees don't have to renegotiate their salaries anew all the time.

That said, all my nasty criticisms aside, I'd love to be proven wrong... ;) I'm of course curious and welcome all initiatives to replace today's monetary system.

Whats that supposed to mean?

Although I won't put any money in or use it, I still support the OP's initiative. If a demand exists for this kind of thing, then there's nothing wrong with an "inflatacoin" at all - just as long as nobody is forced to use it. That's what's great about a truly free market: anything goooooessssssss!

Gesundheit!

After reading the whole thread I'm unclear on one major thing. What is the incentive for me to exchange my bitcoins to freicoins in order to pay for something? I could just as easily buy everything with bitcoins and not worry about exchanging to freicons and then returning the change to bitcoins to avoid the 4.4% inflation. It just seems like an unnecessary extra step that, in addition to being annoying to end users, would require exchanges and merchants to add additional options for an additional coin to sell the same things that bitcoin already provides a secure and instant transfer of money for.

I understand the theory that people want to save their bitcoins and not spend them, but I don't see this really solving the problem. I don't think the problem is with bitcoin or any cryptocoin its' self, but with the availability of every day goods and services. Right now there is nothing I need for my every day life I can buy with bitcoins any easier than I can with USD. Once I can order my groceries and have them delivered to my apartment with bitcoins, I'll do so. This will lead to me converting more of my income to bitcoins. Not because it is a great long-term investment, but because it will be easier to use bitcoins than dollars to get my groceries.

But in fact, with your promised payment of 1,000 F*Coins for the dozen bananas you can only be sure the the buying power of your F*C's is going to go down, because the value of it is pegged to a floating currency. You will enjoy the same bubbles, swings and wild ride, but only see the down side of everything, because there is an artificial pressure taking away your value arbitrarily.

The 1,000 might only be worth 989 on Saturday, and the banana vendor might be concerned that he will be stuck with 989 that will only be worth 971 on Monday when he can get to the exchange and swap them for BTC. Unfortunately there was a small run-up in the value of BTC on Sunday night, so now the exchange value of his F*C which began as one dozen bananas has now become 932 F*C because the power behind F*C cannot control all currencies. The banana vendor, in a move to recoup his looses from this weeks banana trading jacks the price of your dozen bananas to 1200 F*C next Saturday because he knows that the inevitable market forces of demurrage are constantly eroding his buying power. Unfortunately, your turn came up to have your wages reduced by the F*C'ers in charge, so your pay envelope only contained 900 F*C.

Furious that you have stiffed him on your contract to purchase the dozen bananas, the vendor gives you his badly bruised, and quite possibly contaminated older banana stock for the 9 bananas you can now afford. Fearful that this demurrage spiral might destroy your entire ability to feed your family, you eat the rotten bananas, get sick, and your wife leaves you with the children because let's face it, a bread winner who only comes home with rotten bananas is a pretty piss-poor mate, and moves back to her mother's house.

Moral of the story... if you want to end up broke, hungry and lonely, adopt F*C. The rest of the world will be happy with a functional coin.

@herzmeister, @Bitinvestor, et al: my issue with Ripple isn't economic, it's societal. I don't want to take out a loan for a car and end up owing money to the people closest to me. That would poison relationships mighty quick. It's a fine idea for some circumstances, but not a universal panacea.

I'm not sure where you guys are coming up with these new transactions or what purpose they are supposed to serve. Demurrage is assessed in regular transactions by reducing the value of inputs based on the height of the block and age of the respective outputs. No new transactions are required, and it doesn't have to be any more complicated than that.

Precisely.

That gives reason to mine, but no reason to include your feeless tx. Maybe the equilibrium is lower fee, but it isn't clear why that would be.

Big flaws I see, as mentioned, people will just opt for bitcoin and supposing many opt for it for some reason 4.4% of the economy will always be dedicated to mining, which is outrageous long term. I don't think anyone can know in advance the exact right amount, but for a world dominating currency my guess is that .1% is more than enough.

Let's up the ante and make it my circle of 10 closest friends who through the lure of easy money end up screwing me long term for their own short term gain.

I'll take
"They screwed me out of $10,000 so I am sad and decide to start over far away from them, in Iceland"
over
"The entire U.S. banking system screwed me out of my pension so I am sad and move far away from that terrible system, to... oops, wait..."

By dismissing Ripple, you leave your 99%-ers without any tools to define the scope of a particular set of economic problems; they are at all times diversifying their risk with every potentially disastrous or ill-considered scheme out there that happens to be using Bit/Freicoin.  We (hopefully) all noticed the important downside of "universal panaceas" from the effects of the mortgage crisis.

Real diversification means the power to explicitly define the scope of the economy you want when you need to do that, and that is exactly what the extant paper demurrage currencies do (and seem to do well).  But that's just one of at least two important uses I can see for Ripple-- it has nothing to do with a global village of hippies creating tenuous trust relationships (which unfortunately is what the current implementation looks like, but then what does the current implementation of Bitcoin look like to a non-ideologue...)

Sorry, that sounded jerky... I mean I move to Iceland to find happiness again... :)

Bergbau macht frei.

Or in Deutsch-English mixture:

Mining macht frei.

Or in English:

Mining liberates.

I apologise in advance for the reductio-ad-Hitlerum, but some jokes just write themselves here.

This project is important as it might attract Occupy people to P2P crypto-currency in general.
Once they get the idea, they will have better understanding of the technology and will be able to choose the coin they like.

The initial particular characteristics of the coin are not that relevant, what's more important is that this is the coin designed specifically for them by NASA engineers!

Since Matthew's Ellwhatever is supposed to run other cryptocurrencies, Freakoin on such an uber gizmodoohickey will blow up the crypto world!  :D

That's so going to stick.

+1. We might even want to create a whole bunch of different inflating/demurring coins, so they can pick whichever rate they think is best. Call me optimistic but I'm hoping for WAY higher than 4.4% annual growth in a few decades (http://en.wikipedia.org/wiki/Technological_singularity).

I joined occupy to open peoples minds about the financial system but it turns out that is not what occupy is about unfortunately. It ended up being a running battle with local police and council. It got sidetracked by non issues.

What Ive found is that the police and council cant do squat about me trading bitcoins where they can confiscate a tent :D

This is why I want to setup a bitcoin trading desk in Melbourne.

ARBEIT_MACHT_FREICOIN

I do think the inflation should be 2% or so rather than 5% which seems massively excessive. I mean the reserve bank usually aims for 2-3% so dont make it WORSE than fiat.

If the goal is price stability or 0% basic interest (read Gesell for why these are linked and why they should be the goal), then you need to account for productivity and population growth as well. Historically, the sum total has been in the 4-5% range.

What would you propose this coin be called?

I think the name is selected partially out of the vanity of its creator.  ;) For example, the Google "Page"rank did not refer to "webpage."

The first US coin to have a metal value less than its indicated value carried the name "Trime" which seems to me to be a pun. Perhaps this coin could be called the "Trius."

Actually that really is a coincidence (besides, Frei/“free, unencumbered, liberal” and Fried/“peace” are related lexicographically more by chance than by etymology).

“Freicoin” was the name given to a hypothetical bitcoin-based demurrage currency promoted by @jtimon on this forum about a year ago. It was through conversations with jtimon that parameters of this proposed alt chain were set. “Freicoin” itself is an nod to “Freigeld”, the hypothetical state-backed demurrage currency used by Gesell in his economic theories. In this context, “Frei” means free, no-cost, or unencumbered, and is a reference to the approx. 0% interest and easy access to credit it would provide.

Sorry, it's a bad idea to make this joke before you explained the origin of the name.

No worries; just wanted to make sure there was no confusion  ;)

Understood.

The coin is a joke.  Everyone will be a miner, hoping the people that do the real work will earn money for them.  What I will do is become a miner and sell the coins and buy BTC.  Assuming it is worth the electricity to do so.  These Bill Still/Ellen Brown types need to learn a lesson, inflationary coins are not fair.  Yes, the 4.4% might be a good fee to maintain the system, but not as a plan to hurt the rich.

Then you will be doing exactly what the currency is designed for.

Let me reiterate again: the purpose of this *coin is to cleanly separate the dual purposes of money, medium-of-exchange from store-of-value. You trade your mined freicoins for BTC, but the counter-party to that transaction doesn't want to hold on to freicoins any more than you do. So he uses it to buy services he needs, and the service provider gets rid of it by paying an employee, and that employee spends it buying groceries, and that grocer turns a profit and invests it in bitcoins, bringing the Freicoin cash back to the exchange, etc., etc. ad infinitum.

Bitcoin is and always will be an ideal mechanism for storing value, superior to Freicoin in that regard. That is expected, desirable, and by design.

This thread is a waste of time seriously. You dont need to raise funds to start a new block chain.

Do you really think that people will spend bitcoins to buy freicoins THAT THEY DO NOT WANT? Really?

If no one wants the currency who gets left holding the bag ?

The miners? Galambo!  :D

Of course they will. The question, as always, is at what price.

See my previous reply.  ;D

Merged mining is an important feature. It gives miners a reason to mine something that at first will trade for almost nothing, and if Freicoin ever takes off then Bitcoin can free ride off the high subsidy.

Please close this thread it's retarded.

smoothie: I'd be more likely to question the motivation of a cryptocurrency developer who doesn't ask for money.

Are you saying Gavin has something to hide :o ?

No way dood ;) !

I actually agree with your statement there.

BTW, what happened to RealCoin guy that was working with Intersango guys and that altchain ???

I am really curious !

Hmm perhaps then you should put your faith into what you wouldnt be more likely to question right?

Oh wait, you wont do that because you dont believe what you just wrote. Please prove me wrong and send the OP your money  ;D ;D ;D

I already have.

How much?

What he considered to be an appropriate amount. What else matters?


Please, let's try to keep this on topic and without trolling.

A matter of perspective: from your perspective, too much. From mine, not nearly enough.

By the looks of things he is the only one that donated; donated 0.20115289 BTC :D

http://blockchain.info/address/1HzH4YtFwBQXyF2NCCwyY2qFCCsBsmdN3j

The donation link is here http://www.indiegogo.com/freicoin?a=784965

Wow you donated like a whole 50 cents. BRAVO! You are in such support of this project and its 28k goal LOL! ;D ;D ;D ;D

A coin (medium-of-exchange) should be a store of value.  Both workers and grocers would prefer to trade a coin with a store of value.  People only save money to use in the future or to buy a bigger ticket item.

It's simply not a necessary condition. If you really want to understand more I'd suggest picking up this book.

http://www.amazon.com/Debt-The-First-000-Years/dp/1933633867

Or watch this interview with the author

http://www.youtube.com/watch?v=SnOqanbHZi4

http://www.youtube.com/watch?v=L5c5mZhDs4U

$795 raised against a $28,000 windfall for the con-men behind this project with 44 days to go. At that burn rate the final result will be in keeping with the nature of the proposal- FAIL.

So true ...

Well that remains to be seen. There's still quite a bit of time left and we've only just started to publicize.

In any case, if we don't make the goal then we'll just scale back some of the non-critical items, with the block chain pruning probably being the first to go--being the longest pole in the tent.

Here's a thought... why not hop the whole crypto-currency crowd of occupy-lings over to ShortBusCoin/MicroIntellectualPropertyTheftCash and adopt their failure of a currency instead of creating your own. It would really be more in keeping with the philosophy of occupy- leech from others, create a culture of dependency and entitlement by corrupting that which isn't yours, and seize what you want without the effort of actual creation or labor, because , gosh darn it, the 99% should be able to get what they want without all that yucky work stuff, just by taking it from the stupid 1% who actually created it.

An idea about as fucked up as this concept.

Or here's a thought: why don't you troll somewhere else?


I'm happy to respond to any reasonable questions about the economics of the proposal. But let's keep the discourse level-headed and rational, okay?

No Loup is right this idea is not going to work.

Remember the term Open-source and free kind of go hand in hand. Asking people to fund your project goes against that very concept. ;D ;D

That couldn't be further from the truth. These days only a small minority of free or open-source software is developed and maintained as weekend/hobby projects.

But anyway, why should the quality of the idea represent a legitimate demand on my personal time and resources? I thought we were mostly libertarians here--what's wrong with seeking even minimal compensation just to cover the cost of production? Is there something inherently unethical about donating specifically to the cause of creating a open-source/free software project? Would you object to someone making a similar donation to the Debian foundation? What about the Google Summer of Code interns? Are they scum for accepting stipends for the work they do? I really don't see the logic of that argument.

We priced the Indiegogo as low as we could make it while still doing a top-notch job, accomplishing all the goals listed in the timeframe specified. You might not believe it, but servers cost money to build and run, marketing artwork takes resources to make, and code takes time to build. $28k is our conservative, at-cost guestimate of how much it would take to complete the proposal and to do it right (no cutting corners), plus the Indiegogo fees and taxes.

Okay then why don't YOU fund the entire project yourself???

Because I'm dirt-poor? Do you know how little government workers make? And it doesn't help that the cost-of-living adjustment for Mountain View is an inadequate joke. I'm living paycheck-to-paycheck, with two extra mouths to feed.

But that isn't even the point. If people think it's a good cause, that we're the right people to do it, and if they've got some cash to spare, they'll donate. That's an ethical transaction between us and them; why should you care?

This will be my last post on the subject. But feel free to engage me in a discussion about the merits of the proposal or demurrage currencies per se.

Translation: Pity me and support my project because I'm poor. Give me your money so I can make you more money.

do you really think a globally targeted currency with demurrage is a good idea @maaku?

Demurrage is intended to fuel consumption, and in this day and age of overproduction, planned obsolescence and discussion about sustainability, this sets the wrong signal.

As said before, demurrage may make sense for a regional currencies as this would result in more local economic cycles, which has all kinds of ecological benefits. But when the currency is global, this positive effect is gone and will probably result in a consumer-ish slave-like lifestyle not much different to today.

I don't think you seem to understand this concept very well. He's not offering to develop a speculative, get rich quick asset that will "make you more money." He's offering to make one that's better for exchange than Bitcoin.

Sorry that opening discourse with an opposing viewpoint is "trolling" to you, but, that really is par for the course with the occupy mentality... anyone who doesn't embrace the philosophy of gimme, gimme, gimme and don't ask me to do anything for it is the enemy and to be ridiculed for being a 1%er. Fine. I am one of the 1%. Have been for over 30 years. Have the colors to prove it. And I'm part of your vacuous shadow of a 1% too. I embrace personal gain from personal effort. I resist the attempt to seize my accumulation because you "think it is fair to take from others because you want what they have".

This coin idea is an abortion of a concept twisting the philosophy of an open, anonymous currency based on free exchange by turning it into something based on an artificial construct of centralized theft, with a few destroying the value of those who produce for their own benefit.

And the fact that you would have the shameless audacity to come here and beg for $28,000 to promote this bullshit concept sickens me. You are the lowest of the low, a filthy beggar looking to cobble together a con based on a couple of concepts you read about in the news and think you can fleece some unsuspecting dupe into throwing some coins your way. Vermin like you are the basis of most of the scams in online commerce your blood-sucking is unwelcome.

Fuck off scammer, your idea is outed as a con, you are a scammer, and the concept sucks.

And that, little jackass, is not trolling, that is a prima facia ad hominem attack on you and your absurd, unworkable and bullshit idea of a coin.

I'm going to assume that LoupGaroux is feeling injured because his first post, the only one not filled with hateful invective, was ignored. So, assuming good faith (a real stretch at this point), I'll attempt to answer his criticisms.

How? You haven't specified how these definitions are exclusive.

Yes, the blockchain structure is an authority, even in Bitcoin. Because you disagree with what is being accounted for by the blockchain does not invalidate the idea. I think the blockchain structure authority is greatly preferred to some other forms of authority.

Actually there is an economic "law" that states the exact opposite. It's called Gresham's law, but it doesn't apply here because this currency exists without a state setting its exchange rate. However, it suggests that in practice nobody would like to spend their more valuable currency.

Sorry, but just as capital has time-value, so too does the value of your work. Your desire for a system where its possible to coast off of personal wealth without contributing doesn't exist anywhere and can't exist. As the Bobby Dylan song goes "you gotta serve somebody."

@herzmeister, first let me quote jtimon from his post introducing the idea of Freicoin over a year ago. He did a good job listing the advantages of a demurrage currency, and more importantly included links to the relevant economic theories:


Do I think a global demurrage currency is a good thing? Yes, for the same reason that any global currency that is free of control from central bankers is a good thing. I feel that the local currency movement is misguided in trying to fight globalism, and the lack of similar restrictions on Freicoin is a good thing. Of course it is an opt-in proposal, so anyone can use it (or not use it) as they see fit.

Demurrage does not do anything specifically to fuel consumption--one could just as easily buy bonds, equities, bitcoins to get rid of unwanted freicoins. It does however incentivise long-term thinking and the acquisition of real capital when compared with high-interest currencies like deflationary Bitcoin or inflationary fiat. Here's a classic example:


So one could say that the “type” of consumerism encouraged by demurrage currencies (investment in real capital for increased production) is actually beneficial.

Actually I think a larger quote from Eistenstein may be of value here in explaining the “why”:


This is from a larger work, Money: A new beginning (http://realitysandwich.com/money_a_new_beginning_part_2).

Wow, that's a brilliant find. Very succinct and accessible.

Yeah, I just wish it wasn't attached to a site about shamanism, astrology, and new-age mumbo-jumbo :\

It seems like all of the benefits the author perceives from the use of demurrage only come about when there is no interest bearing or neutral alternative, otherwise instead of losing wealth to demurrage, the holder of money will just exchange it to a more suitable store of value. Additionally, it seems like the author forgets that one of the purposes of money as a store of value is that it does not spoil as do most consumable goods. Especially given the ease with which one block chain tokens can be exchanged for another, if Freicoin becomes popular I don't forsee anyone with significant wealth holding on to them for any significant amount of time.

Don't bother maaku with facts. He lives in his own dream world.

That wasn't forgotten--that was explicitly mentioned in the article and by myself in the proposal and this thread. Freicoin is a medium-of-exchange currency only. If you have excess freicoins and you convert those freicoins into bitcoins, fiat, commercial paper, or whatever, that is both expected and inconsequential. Remember that the counter-party to that transaction now has freicoins that they want to get rid of, keeping the money in circulation.

@maaku

I'm kind of worry that you're asking for that much money. I'm not saying that you're going to runaway with the money, but the very basic (implementing demurrage (http://www.freicoin.org/implementations-details-and-bounty-7-3-btc-t13.html#p129) and adding the merged mining that is already coded for namecoin) is much cheaper than that. I mean the pruning algorithm sounds great, but I don't think that's necessary for freicoin, just a cool thing for both bitcoin, freicoin and all the other cryptocurrencies: it could be placed in another campaign. The film, the pool, the exchange...all great and necessary things. I just don't need they're necessary for the first step.
Anyway, I hope you have more luck than I had with my old bounty (https://bitcointalk.org/index.php?topic=36190.0).

For some of the common criticisms that have been repeated here (I didn't read the full thread)...
Some of them discussed here (https://bitcointalk.org/index.php?topic=3816.0) (but I've improved my English and knowledge in economics since then, thank you bitcoiners).

Freicoin is equivalent to expocoin (proportionally constant inflatacoin/timecoin)
If you're only thinking about miners reward, yes. But price deflation would be expected through growth instead of exponential price inflation (which is clearly an inconvenience).
And the most important thing: expocoin doesn't do anything against the basic interest. An inflation premium will be just added to the gross interest, but the basic interest won't disappear.
A more detailed explanation can be found here: https://bitcointalk.org/index.php?topic=36450.msg469848#msg469848

Demurrage leads to consumerism
No. If fact demurrage make us think in the long term by rducing the time preference.
A higher interest rate means a "higher short-term thinking".

Tree Metaphor
http://www.wuala.com/jtimon/temp/what%20do%20we%20invest%20in.png

Imagine you plant a tree. In ten years, that tree can give you $100 in lamber and in 100 years, $ 1000.
Now from the financial perspective.

With a currency that yields 5% interest, $100 in ten years are equivalent to $ 61.39 today. And $1000 in 100 years are equivalent to $ 7.60 today.

If the currency has 5% demurrage, $100 in ten years are equivalent to $ 167.02 today. And $1000 in 100 years are equivalent to $ 168,903.82 today.

With interest, the same stuff in the future is valued less than today. With demurrage, the same stuff in the future is valued more than today.

This proves that the structure of money has an impact in our way to value things over time.

With demurrage we have more incentive for conservation AND therefore to save.

How can you say that?, demurrage is a direct attack against savers

No. Hoarding is not the only way to save, you can store real goods instead of blocking the medium of exchange. You can also lend your money.
Gesell explains that the average saver will be able to save much more from the interests that he's saving on all its purchases (most savers pay more interest than they receive, it's just that they don't see it) here: http://www.community-exchange.org/docs/Gesell/en/neo/part4/5g.htm
There's an open discussion on the deflation thread on whether hoarders create wealth or not. I think only lenders/investors create growth, not money hoarders.

It doesn't matter, it won't be competitive. People will always prefer to hold bitcoins and therefore no merchant will accept it.

It's strange that chiemgauers can compete with euros then, since they're backed by euros and also have demurrage, anyway...
Then you don't have to fight against this, you can just wait for us fool idealists to fail on our own. No government will force you to accept it by decree.

@jtimon, as it stands now we have enough to finish the minimal Freicoin client (based on Bitcoin-Qt, not Armory) and release it without any fan-fare or associated services. And we will, even if donations stop today.

The goal of the Indiegogo campaign is to take it far enough that enough of an ecosystem exists for merchants to start accepting freicoins as-is, and to create marketing materials for people on the ground to use to explain and promote the currency. About 5-10% will be spent on the basic core, another 25-35% on services and features that are necessary for use, and about 40% on the website, video, and promotional material. The rest, unfortunately, goes to Indiegogo fees and taxes :\

Thank you for explaining that. Does the 5-10% include merged mining with bitcoin and namecoin or that goes in the services part?

Is the reward for miners constant or there's complicated calculations at the time of the transaction?
I know you think your way is easier to implement, but I still disagree. A constant reward for miners and the following formula to check the balance of an output is much easier.

What I thought was necessary for libbitcoin (didn't test anything)

1)
We replace int64 CTxOut::getValue() for

int64 CTxOut::getValue(int nHeight) {
   return this.nValue - (this.nValue * DEMURRAGE_RATE * (nHeight - this.blockNumber));
}

2) replace

int64 static GetBlockValue(int nHeight, int64 nFees)
{
 int64 nSubsidy = 50 * COIN;

 // Subsidy is cut in half every 4 years
 nSubsidy >>= (nHeight / 210000);

 return nSubsidy + nFees;
}

for

int64 static GetBlockValue(int nHeight, int64 nFees)
{
 int64 nSubsidy = 50 * COIN; //or another constant
 return nSubsidy + nFees;
}

or something like this (http://www.freicoin.org/implementations-details-and-bounty-7-3-btc-t13.html#p129) if you want the max base to be issued faster. I find my solution simpler and cleaner than yours. Also better for miners and the security of the network. Please, reconsider that decision too.

I don't want to seem distrustful, but I've already spent many hours promoting the concept and if I promote your campaign and then it ends up in nothing...that would be very harmful for all my previous efforts, adding "scam" connotations to the name of the currency itself.
I would prefer to code freicoin instead of the shit I code at work, but I don't care if you get pay to do it.
It's not about the credit neither. I don't like articles like this one (http://www.newscientist.com/blogs/onepercent/2012/06/freicoin-occupys-online-curren.html) in which "Freicoin, created by NASA engineers...", but seriously, is not about the credit.

For me It's all about the success of Freicoin.

When I see it working I will be happy to give up the domain freicoin.org, give you the small bounty I store and thank you a lot.
But until now I've only seen posts from you. I don't even know if you're a NASA scientist or a Silicon Valley entrepreneur.

I hope you can understand my worries.

That's great!  Make sure to at least post an update here once you code it up so people can start testing it out.

Yes, the 5-10% “Freicoin-core” consists of demurrage + merged mining patches applied to Bitcoin-Qt (plus, of course, build servers for doing cross-platform testing and deployment). The 25-35% “Freicoin-extra” is stuff like Armory support, blockchain pruning, mining pools, exchanges, etc.

The prototype overlays demurrage on top of the usual Bitcoin subsidies. So the reward for each block in the first 4 years is 50 freicoins + the per-block demurrage rate applied to the existing monetary base. An alternative I'm considering is what your propose: eliminate the stepped Bitcoin subsidy algorithm and instead issue subsidy to miners equal to the demurrage rate applied to the eventual total steady-state monetary base, i.e. constant rewards forever.

The downside of this later approach is how long it would take to generate the total monetary base. It would take 15 years to generate half of all freicoins, 30 years for 0.75M, etc. It would take 75 years to generate 96% of the eventual total monetary base. The problem being that it would take decades until the inflation due to the expanding monetary base isn't the dominating factor, and therefore wouldn't be an effective test of a demurrage currency in the wild.

I think it's better for everyone's interests to fill the monetary base as quickly as possible, although not so quick as to have large concentrations of wealth among early adopters. Do you agree?


It'll be pre-announced, code and binaries available, only the genesis block mined, etc. etc. Just like the litecoin release.

Testnet binaries will be available sooner, so we can make sure the final release goes flawlessly.

Yes, I agree. But I'm not sure how your current proposal would work.
You say "So the reward for each block in the first 4 years is 50 freicoins + the per-block demurrage rate applied to the existing monetary base"
I guess you then reduce to 25 + ...
But I kind of dislike the resulting curve (mainly for rewards, but neither for the base).
Instead of the simplest "always constant" issuance that takes so long, we thought about beginning fast and then annealing it each year, or each block...
Here's one possibility (that a linked to before):

int64 static GetBlockValue(int nHeight, int64 nFees)
{
 int64 nSubsidy;
 if (nHeight > EQUILIBRIUM_BLOCK) {
 nSubsidy = EQUILIBRIUM_REWARD;
 } else {
 nSubsidy = INTIAL_REWARD + ((nHeight - 1) * DECAY);
 }
 return nSubsidy + nFees;
}

The constants would be defined like this:

#define EQUILIBRIUM_REWARD 1000 * COIN //this can be changed
#define MAX_BASE 1000000000 * COIN //1 Billion, this can be changed
#define EQUILIBRIUM_BLOCK 250000 // 5 years, this can be changed
#define DEMURRAGE_RATE 0.0001 // 1 - 0.0001, ~5% annual, this can be changed
#define DECAY 0.008 // can be changed// MAX_BASE = (EQUILIBRIUM_BLOCK/2) * ((2*INTIAL_REWARD) + ((EQUILIBRIUM_BLOCK - 1) * DECAY)) - DEMURRAGE_CHARGED_UNTIL_EQUILIBRIUM
#define INTIAL_REWARD ((((MAX_BASE + DEMURRAGE_CHARGED_UNTIL_EQUILIBRIUM) * 2) / EQUILIBRIUM_BLOCK) - ((EQUILIBRIUM_BLOCK - 1) * DECAY)) / 2

We discussed extensively about this (and the max supply and final reward, all of them interrelated) in the freicoin forum thread:
http://www.freicoin.org/gesell-currency-t8.html

I think we kind of agreed on using arithmetic progression. But there's lots of possibilities (I know, infinite, I mean appealing possibilities).
Please, take a look at that thread.


Perfect.

I have read that thread previously, but I don't remember an explanation of why such a system would be better, except that arithmetic progression would supposedly be easier to implement. But both methods are trivially easy (just a few changed lines in the calculation of nSubsidy), and the Bitcoin geometric distribution method has already been proven to work and be a relatively fair compromise. If it ain't broke, why fix it?

Why do you dislike the resulting curves of the Bitcoin method? Sorry if I'm asking you to repeat yourself, but it's not very clear from the thread you linked to.

Bitcoin distribution hasn't proved to work. The 4 years haven't passed yet. What if the security suddenly halves when the reward drops to 25 BTC?
I'm not saying that's what will happen, but no one really knows.


Because...

1) miners reward always go down until it stabilizes (instead of rising and dropping).
2) Both the reward curve and the total base curve are more "continuous".

But, yes. It is easy to implement and there's many alternatives.
The max bases and final rewards may have more to do with aesthetics...
But I like that 100 fcn per block (final reward) and 50000 blocks per year that converges at 1B max base with 4.something% demurrage I think I remember. We were looking for round numbers there, that's not really important, but easy to summarize for new people.

What I dislike are steps (in the curves) and complex signals to miners and prices.
What I want is smooth and derivates that converge at zero but don't cross it several times.

I don't think you have carefully considered the problem of synchronizing a system like you propose.

For instance, it would be possible to make a system where the difficulty of mining is constantly adjusted to global network hashing power, but a system like this would be very difficult to synchronize. The nodes couldn't agree on what blocks to accept or reject. Piecewise definitions of difficulty and generation function are unfortunately a consequence of the peer to peer network.

That wouldn't have the effect you think it would...   :-X

You need this formula

Compound amount (single payment)  

return this.nValue *= (1 - i)^(nHeight-this.blocknumber);   // i is demurrage rate

annualized demurrage rate = 4.4/100=.044

i=(.044 interest per year)/(365.24 days per year*24 hours per day*6 ten minute blocks per hour)= 8.37e-7 interest per 10 minutes block

let me know if you see any mistakes

You can play with the effect here...

http://www.ajdesigner.com/phpdiscountfactors/single_payment_compound_amount_equation.php

put I in as "-.00000083713850837138508371385083713851" and period as number of blocks to see how much your currency multiplier would work through time :))


maaku choose 4.4% because he likes irrational numbers...  Using the generally accepted "rule of 72 " (we don't use the rule of 69 because that is a naughty number) we see it will take 16.363636363636363636363636363636363636363636363636363636363636363636363636363. .. years to halve your money ;)

Actually, we chose 4.4% because, it appears, I screwed up a calculation at some point (perhaps rounding error?). The goal was to pick a simple value that when compounded put us within the 4-5% range (I was advocating 4% at the time, jtimon 5%; I was hoping to split the difference). At some point I tried 8e-7 = (1/1250000), and calculated 4.4%. Of course I just did the calculation again and realized it's closer to 4.1%. I'm not sure how I made the error earlier, or if I was operating under different assumptions, or if I just copied down the result incorrectly. Ultimately it's an arbitrary choice.

I also got an email from someone who pointed out that there might be potential for speeding up demurrage calculations if the demurrage rate per block were an exact power of two. 2**-20 results in about 4.9% annually. Of course maybe we should forget about future minor optimizations and simply fix it at 4.5%.

You're probably right... That  long string of numbers was me typing approximations (365.25) into calc.exe. only the best tools here ;)

If you enable merge mining on Freicoin, how will you prevent large miners from taking over the chain as happened when coiledcoin was released? In that case a pool used merge mining to have >51% of mining power and refused to accept any blocks from anyone else. As a result they got all the coins and the chain was effectively dead.

Not enabling merge mining has the issue of large miners from doing similar but they don't get the attack for free - they won't earn bitcoins while doing it. This attack pretty much stopped development of new alt coins from what I can tell.

Which pool carried out that attack?

See this post and related thread (https://bitcointalk.org/index.php?topic=56675.msg678006#msg678006). It's a contentious issue so rather than concentrating on the who, concentrate on the fact that it happened. Any large pool or miner can do it, so any new merge-mineable coin would need to be able to handle it.

Interesting.

Well, I'd rather just speak with the people involved and get their consent, as it is, to proceed unmolested.

We'll see...

We may as well merge-mine beer coins so at least people can get drunk if they lose all their money  ;D

The attack done on Coiledcoin almost certainly violated laws, and it didn't actually last long, for a long time since then coiledcoin seems to have been operating normally, with the attacker simply doing normal merged mining using his pool's users' hashing power without the users seeming to care.

SO sure the attacker is still racking up coins, but others are still able to use the coins. The chap just happens to have a lot of suckers willing to freely give him hashes to do as he pleases with.

-MarkM-

You seem to be talking about a system different than bitcoin's. Although there were some improvement proposal on the freicoin forums I wanted to keep things simple and only change what really needed to be changed.
Although probably we should consider some easy changes from here:
https://en.bitcoin.it/wiki/Hardfork_Wishlist


Yes, DEMURRAGE_RATE would be your (1-i). Probably the name is not appropriate.


Actually we could also adjust the "10 min per block" constant to get beaty numbers. For example 50000 block per year (11.something minutes per block).


Thank you, I'll play with it later.


Something around 4-5%, great. We consider something like 4.8% in one of our calculations in the post I refer to above.

Hey, MarkM remembered me that we're forgetting the "exact payment problem".
My proposal was:
https://bitcointalk.org/index.php?topic=36190.msg453112#msg453112

Edit: Another consideration. I think that at the very least the pruning technology should be separated from the campaign. It would actually benefit bitcoin too, so pure austrians could contribute with that one even if they think that the whole idea of freicoin is stupid.

Interesting that $825 of your needed $28,000 (less than 3%!) is enough to begin implementation. Your estimation of fees, publicity and hosting costs is absurd. Unless of course, a lion's share of that amount is "fees" for the developers (who are basically just tweaking an existing code base). Nice. That kind of thinking is just a swell way to introduce the concept of diminishing net worth currency to the world. A currency that arbitrarily loses value run by folks that look to control and make a killing off if your use of it.

Thanks for playing, I'll pass. And continue to poke fun at this dramatically bad idea.

And really swell citation on the moonbat selling shamanism and money theory. It's called a clue, you need to get one.

It's not a problem, at least not in that context. It will require implementation of receiver-fees, however, so that the receiver can make an transaction claiming the funds with extra fees in case the input value decays below the output value.

The exact payment solution would work too, and it's a toss-up as to which one is easier to implement.

1HzH4YtFwBQXyF2NCCwyY2qFCCsBsmdN3j
Total Received   0.20115289 BTC   
Final Balance   0.20115289 BTC

I lol'd.

Sure there's more possible solutions. All I'm saying is that it is a problem that is better to solve (although not a particularly hard one).

Will you consider separating the campaign in different parts?

If the aim was to create a simple clone of bitcoin with demurrage, sure. Don't you think that's aiming pretty low?

I would hope this currency becomes valuable because it is better than bitcoin (because it builds on it), not because it only copies it.

I don't think the cross section of people that would be interested in this proposal, and the people interested in bitcoin would be very large. I certainly don't have any bitcoin. My only real interest in either is completely technological (i look at them as tools). However, if this project does everything they say they want to do I think many more people in the community will find this worthwhile.

Ah, there's the spirit of necro-alt coins past! This one will be worth less because we will make it thus for our own benefit and gain, and that in and of itself will make it better than bitcoin!! Just what the anonymous means of value exchange cadres in the world have been clamoring for! A self-defeating token that someone other than ourselves can arbitrarily control that has delusions of omnipotence!

Look here boys and girls... a new SolidCoin 5.0 (or are we up to 9.0 yet?) has arisen to take its place as the champion of the better than bitcoin competition. Yay! Enjoy your 15 seconds of glory running up an exchange that you can back-rape a couple of dozen suckers with, retire to your angry hole and bemoan loudly how brilliant you are because you have something that is better than bitcoin!! It's just the haters that ruined it for you.

You will find a couple of kindred spirits in that corner of hell, dreamers who think that they are so much smarter than bitcoin, and if we could only relate to just how brilliant they are, we would all enrich them endlessly. Of course this one is designed, and whined for by the occupy-istas, so I expect exactly zero progress before the eventual end of the universe. They will happily gank the $825 and spend it on delivery pizzas to be brought "aux barricades" to support the revolution. They will probably even tip the poor bastard that brings them in freicoins and tell him how lucky he is to have a tip that will be worth less when he gets back to the restaurant than when he received it.

As I said earlier, with the current design it takes 16 years for a freicoin to halve in value. If it takes you longer than that to decide what to do with your money may I suggest a funeral plot? You can't spend the coins from below the ground. Most people will not notice the demurrage.

However, I think you will find the expectation of decreasing value will completely change the way people use this currency. If I know anything about markets its that they trade more on expectations and momentum than rational fact.

Exactly, they won't use it and it will be worth very little.

If I expect falling value doesn't that mean I have to inflate my prices?

For example if I buy 16 years supply of pencils, or erasers, or gold, or land, or whatever... any wholesale good I plan to sell at retail over a period of time to make a living as a retailer... surely I have to keep on increasing the price I require for what is left of my supply as the money I have aquired from what I have sold so far keeps vanishing from my purse, otherwise I will not have enough in my purse by the time I have sold all but my profit portion of the bulk buy quantity.

Is it supposed to be good that we help eliminate retail by forcing wholesale purchases to become impractical for retailers, forcing them to buy one at a time themselves instead of buying a number at a time, or some such thing?

If the objective is inflation, why bother decaying the currency, just jack the prices instead...

-MarkM-

You have a very peculiar understanding of how a business operates. You might want to study "accurral based accounting" and "net payment terms" to get a better idea of how business works.

Essentially, there is a constant flow of money in and out of your business. If this is not the case, you are probably not running a very successful business.

You shouldn't have much of a "purse" and if you do it should be put into investments, not your checking account.

Demurrage works well for people with this style of operation, which is most successful people.

Your biggest expense in running a business, as always, will be other peoples time -- the cost of labor.

Okay, so how is freicoin better for a successful business than dollars, or bitcoins? What profit do they extract from whom by using it? Does it give them more leverage over their employees so that forcing employees to accept rotting/decaying/evapourating money? It is expected they will get more goods from suppliers per man-hour their labourers put in selling stuff for them or building stuff out of what the suppliers supply?

Or is the plan to turn into an investment firm, offering to help the suckers they foist this rotting currency upon a potential escape from the rot if only those suckers will simply invest into the business? Maybe thus turning a nice profit by suckign everyone into putting back into your busienss all the crap-coins you foist off upon them as wages or as change or even as "payment" for supplies?

Even tobacco/cigarettes/liquor/pantyhose type goods that have become currencies in various circumstances seem to be actually somewhat storable, even back in ancient times when grain was a currency that was only after granaries had been invented, wasn't it? So how the heck does anyone get suckered into actually accepting this guaranteed-to-rot currency? You keep dropping its price lower and lower and lower until someone finds a sucker who will accept it real soon thus decides to buy just as much of it as that sucker will accept? Then that sucker is stuck with the problem of finding a greater sucker?

Since the whole thing seems to depend on suckers, why not just build it directly on top of bitcoin? I have already pointed out in another thread (in the Development section) that the blockchain need not adjust its values at all, the adjustment can happen in the display and input routines only, allowing the blockchain to represent with constants the values that the display and input routines will, by access to a clock, render in accordance with the time at whcih the input or display happens, it becomes un-necessary to use a separate blockchain at all. You can simply use such display functions in a demurrage-coin client that uses the bitcoin blockchain for actual transactions but demurs the demurrage-coin quantity it displays for any given bitcoin quantity in accordance with the seconds since the epoch or whatever: the time at which display or input happens.

That way everyone can hum along fine all using the same blockchain but those who prefer to think of their balances decreasing can use the demurred display of their balance and those who prefer to just use constants to represent those same bits in the blockchain can do so.

Since the whole point is simply psychological, to psychologically trick people into thinking they should spend their money as soon as possible, this should suffice nicely since in any event it is hopefully only those who volunteer to be the suckers subjected to the experiment that need to see their balances as constantly decreasing. This should also ensure that your demurrage-coin will work fine and be wideley used, since anyone who prefers not to pay attention to the decreasing numbers representation of their balances can just stick to the normal family of clients and see things they way they always have, which they will in any case strive to do. Without this approach they will have to do it by not using your currency at all, At least this way they can still in good conscience use the stuff, leaving the psychological benefits of spending as soon as possible to others.

-MarkM-

Actually that's once of the prime examples of a demurrage currency. Some of our earliest examples of writing are actually grain contracts that acted as currency and decreased in value over time, to account for rot. Google "Egypt grain demurrage" for details.

Sorry, I want to respond to your post in full, but I'm getting pulled ten different ways today.

Thanks for the search term, some interesting material there.

-MarkM-

Whenever a demurrage currency seemed to "work" it was the only option available. If there had been a better alternative without demurrage then they would have used that instead. Freicoin will have to compete against bitcoin from the start and it will lose.

My point is that the pruning is just a technical improvement that is reusable for bitcoin (and other cryptocurrencies). We should work with the bitcoin developers to achieve that. We coould also finance it together.
Personally I like more the bitcoin way of "do it first, earn the the bounty later", but that's another question. 


I don't know of any fiat demurrage currency. The examples I know are the wörgl experiment (not private), the chiemgauer and other private local currencies like it.
All of them competing directly with a national (or monetary union) currency. All of them worked pretty well.
Can you tell us about your sources?


No, you don't lose money by having stock, that only happens with deflation.
All you have to do is not hold a big quantity of money. You should better spend it or lend it.
You don't need to rise prices, that's inflation.
As said many times, expocoin is not equivalent to freicoin (https://bitcointalk.org/index.php?topic=36450.msg469848#msg469848).

More frequent questions solved here:
https://bitcointalk.org/index.php?topic=3816.0


Everybody will save a lot in concept of interests (which are included in the price of EVERY WARE). Gesell uses an entire long chapter to explain how differnt economic actors would judge a currency free of the unfair basic interest: "How Free-Money will be judged".
You can start with the The Shopkeeper (http://www.community-exchange.org/docs/Gesell/en/neo/part4/5a.htm) and then use the next button.
You could also read the whole book before criticizing an idea you don't understand (you can skip the first two parts on land and Gesell's particular view on georgianism).


The demurrage fees go to miners, the people that maintain the security of the network. What's wrong with that?
Why transaction fees are so much more legitimate?

Where did I say fiat demurrage currency? I meant demurrage currencies in general, like this one:


Since freicoin is modelled after rotting grain I hereby propose its trading symbol to be ROT.

Because transaction fees don't rot your money away while you don't use it, just like gold doesn't rust.

You said "Whenever a demurrage currency seemed to "work" it was the only option available." And I wrongly assumed that "the only option" implied fiat. I doubt that the grain option was the only one in egypt, but, anyway, your sentence is refuted with my previous examples.


But the chain security must be paid by the currency users somehow. Why transaction fees are more legitimate than demurrage fees?
"Because gold doesn't rot" doesn't seem an answer unless you worship gold or something.
And "while you don't use it" is arguable. You're holding a wildcard, you're using it as an insurance against uncertainty. You enjoy the liquidity that the rest of the users provide you by accepting the currency, why should that be free?

LOL, you didn't refute anything. You keep citing the chiemgauer as a shining example of a demurrage currency but it is NOT and here's why: The chiemgauer is BACKED by euros. They deposited euros at a bank and then they issued chiemgauers that are BACKED by euros. THAT is what gives it value. Were it not backed by euros it would be WORTHLESS.

Go on and release your shitcoin already, it will be fun watching it fail.

Because I put my faith into it by hoarding it. If you remove bitcoins from circulation the remaining ones will become more valuable.

I refuted your previous "Whenever a demurrage currency seemed to "work" it was the only option available."
To refute it only one counterexample is enough, and I gave you two of them (you can find more here (http://www.complementarycurrency.org/ccDatabase/)).
Now you're saying "Whenever a demurrage currency seemed to "work" it was backed."
I didn't demonstrate with logic that freicoin will work.
I'm still having problems demonstrating that same thing for bitcoin, even when it's proven by facts.
Go to the mises institute forum to talk about bitcoin and see the results. Didn't you ever heard "bitcoin is not backed" by any goldbug?
Bitcoiners are one step ahead, they only need to understand that the store of value is not a desirable or even possible function of money.
We austrians know that you can't create prosperity by inflating the supply of cash, but we gesellians know that you can hold it back if you allow money to be hoarded, if you allow it be the bridge keeper of trade, and tax every ware preventing the supply of real capital goods from satisfying its full demand (basic interest or so called "time preference" = 0%).


Wait for your glorious moment of laugh, and let us work for that to happen.
If you don't want to understand our points of view, like others here that don't share our conclusions, get out of the discussion.
Your criticism is sterile in all senses. Your noise is completely useless for everyone here.

You seem to be talking specifically about arbitraging the value of bitcoin (speculating) rather than the insurance that comes with all the cash-monies.
You can also speculate with freicoin, if it rises from zero to 6$ you would make money despite demurrage.
The point is why the rest of the users of hte currency (the people who actually give it the value it has) give you that liquidity insurance for free?
Can't we chose the rules of the money we use? The rules are the same for everyone just as in bitcoin, you're free to chose the system you prefer or use of or none.

Perhaps you can add this questions to your FAQ:
When would the demurrage penalty be executed?

Based on this answer, will follow a question about how the penalty will avoid exploits, but it depends on when and how demurrage occurs.

[edit] I found in another thread that it is assessed at the time of transaction based on how long it has been held. What is to stop someone from simply holding it indefinitely as a backing for another currency like for instance, phycical bitcoin? If everyone did that, it would be a nightmare knowing how much a physical coin would be worth.

Wow, really interesting read, though I have the impression I have read much of it before or read some other stuff maybe that says much of the same.

I am guessing that he is not of the/an "Austrian" persuasion? If not (as seems to me a reasonable guess), can anyone point me to the most apropos, direct, pithy, and relevant "Austrian" counterargument (or "debunking", maybe, they might say imply or imagine)?


You want something like 4% to 5% of the market cap per annum to go to securing the network?!?!?! Sheesh, consider merged mining or something, please! Such a percent seems a ridiculously expensive proposition.

EDIT: Bear in mind too that if you do in fact stimulate greater "velocity" that likely also means more transaction fees? Or is the plan to have no fees just the demurrage?

Please do make it merged-mineable, if you must give 4% to 5% to miners each year, it might really help small miners who scrounge up the cash for a Jalapeno coffe-warmer to cover their coffee-warming costs once everyone and their dog has at least a few Jalapenos and maybe a larger unit or few in the family (footwarmers and such, y'know...)

-MarkM-

Having a little fun at the moment

https://i.imgur.com/htuZt.png?1

Figure 1. Frequency Characteristics


https://i.imgur.com/lDBEk.png

Figure 2. Impulse Response (Broadcom logo, dont let the exCEO know about the silk road)

To those of you wondering why I'm posting these graphs, heres a little hint as to my motivation...

https://i.imgur.com/aHMSx.gif

Although the coins "are still there" accounted in the chain, not all of them will be spendable. For example, if an output contains 10 fcn but has been frozen for a year, anybody (not only the owner) can know that the owner will spend at most 9.5 fcn (considering 5% demurrage). So anybody can know at any given time how many freicoins can be spent. Lost wallets can be ignored after all the funds have been consumed through demurrage, effectively recyclign them.


I've been asking for this many times in the deflation thread (locked in the economic subforum, interesting discussions about it there), but it seems that no austrian has really taken Gesell seriously enough for a formal critique. The few times you find it is to say something like "Keynes listened to him, but he was even crazier". Followed by some stupid thesis that didn't really belonged to Gesell.
I think Mises, Gesell and Keynes were more or less contemporary, but I don't think that Gesell and Mises knew each other's theories. Keynes and Gesell talked to each other through letters and Gesell predicted the failure of "Keynes-money" (http://www.community-exchange.org/docs/Gesell/en/neo/part3/13.htm) (actually he wasn't the first to propose it).
Although Gesell was mostly libertarian, he believed that money was a natural monopoly and thus one of the few legitimate functions of the state.
I like E.C. Riegel critique to statist money, I have to end his "The new approach to freedom" and his other books.
I've been trying to synthetize austrian theory with Gesell's theory on interest and I've come to the conclusion that an elastic money supply is not necessary (or desirable), only demurrage. You don't need to maintain stable prices, just avoid runaway deflation caused by hoarding. Well, just discourage hoarding through demurrage. Thanks to all the bitcoiners that have been (and currently are) discussing it with me in the deflation thread, it has been really useful and instructive for me.


Take into account that 5% of the market cap is not the same with velocity 1 that with velocity 20. Velocity pushes prices high, so the coins that miners get are worth less. The percentage of the economy that are the miners is lower with a higher velocity, and we expect a high velocity.
5% of the money supply with V=20, would be 1/400 of the GDP (well, not really the GDP, as the austrian Jesús Huerta de Soto tells us, that's not gross at all, it's focused in final consumption instead of production). I'm making up the numbers, it's just an example.

Of course, we also rely on merged mining. That allows all chains involved to save resources at no cost, not having it would be wasteful.

Transaction fees are allowed but since miners are already rewarded, they won't be as sensible to fees as bitcoin (after the whole base is issued).
I expect low fees and many transactions without fees at all (after all, users are already paying demurrage fees).
The reason for the number is an historical analysis made by one authout I don't remeber and that Gesell cites to have an estimation of the "basic interest", discounting inflation and risk premiums somehow. Of course, that analysis excludes after-Keynes money, in which rates are directly manipualated by the issuing authority.

Ok so how many coins per block are to be created and will that number ever change if so how much and on what schedule?

Also, in line with someone else's question, I too am interested in how exactly the demurring is to happen.

I still think it might be easier to always relate quantity to time, so that one can write constants in the blockchain and compute the actual number those constants represent at any arbitrary moment in time by reference to the calendar. That way the blockchain never has to care that the X binary number transferred from one account to another happens to represent 10 dcoins one year, 9.5 dcoins the next year and so on.

When for example we write contracts saying "will pay 10 dcoins on 3 years time" the binary representation of the number will reflect the fact that the underlying binary number today read/displayed as 10 would not read as 10 in 3 years time. The contract would thus, if expressed in the constants the blockchain uses, show a value that will only be equal to 10 in three years time; at the current time that same presentation would actually be displayed as more than 10.

This will in fact serve to constantly emphasise to anyone who actually looks into the internal workings of the system the fact that future money is worth more than current money. (9.5 a year from now is the same as 10 now, in the internal representation.)

-MarkM-

That's to be decided. If the reward was constant, it would take to long for the monetary base to converge to the maximum. See the discussions abouve in this thread.
What we want is to stop inflation earlier, but there's many possibilities for that.


Yes, this is how it works.
What is written in the chain is the amount at that block. To calculate the amount of "real" coins of an output at a given block you only need to know the output's value and the block number in which that output appeared.

Example:

In block number 100, it is written 10 in the chain.
A year after, the chain still contains 10. But if you move them, the new block will put 9.5.

We cannot know the actual new block; that could change at any time, depending on the discovery of alternate branches, resulting in re-orgs.

That is why I am suggesting the blockchain use constants; on the blockchain, 10 still says 10 no matter what block it ends up in. The demurrage is coded into the display/interpretation of what the value 10 actually means at different times.

Basically I am suggesting the numbers in the blockchain record how many "at the time of the epoch" d-coins are involved, not how many "at some other moment in time" d-coins are involved.

We could use the unix epoch even, recording in the blockchain how many January 1st 1970 d-coins are involved. The number of as of that block coins that amounts to can be computed for display by comparing that block's datestamp to the epoch, and the amount as of today can be computed for display by comparing the number recorded in the blockchain to the current unix time.

The number of epochal coins need never change, all that needs to change is how many coins that would have amounted to, does amount to, or will amount to at any given moment.

The chain thus need not care how long it takes a transfer of 10 epochal coins to get recorded in the chain; that number does not change. ten epochal coins arriving today or ten epochal coins arriving next year are still ten epochal coins.

What changes is how many actual d-coins that many epochal coins amount to at each moment in time. That goes down. But the blockchain need not care about that. If you want the number of actual as of that time d-coins minted each block to stay the same, increase the number of epochal (blockchain-recorded; blockchain-notation) coins minted in that block to compensate for the demurrage (the conversion rate at that time between blockchain-notation aka epochal coins and at-a-given-moment-in-time d-coins).

To the users, this will look the same, but to the blockchain, it eliminates all the problems of re-orgs causing changes in numbers recorded in the chain. I still send you X number of this-moment d-coins which by the time you receive them will have demurred to less d-coins, but the blockchain is entirely unecumbered by all that, as it need only exist in the display and input conversions/functions.

-MarkM-

So how would you make physical Freicoin like Bitcoin can? If you pay someone with a physical Freicoin, a Freicoin created last month would be worth less than one created this month. Seems like there really is no convenient way to use Freicoin offline.

A physical freicoin could instead of periodically applied stamps like old paper implementations of demurrage currency sometimes used instead have a display on it and a clock in it, so that it constantly counts down the number of freicoins it is worth moment by moment, graphically showing its constant decay.

Internally though, it has private key of a fixed number of epochal coins. It is the constant demurrage of that constant number of epochal coins that causes the change in the given-moment number of at-that-moment freicoins.

This might even be better for urging people to spend quickly than the stamps systems were, since instead of "it is friday, remember tonight they go down in value" people will see moment by moment the constant eating away of the value.

-MarkM-

TSA agent: "What is that device in you pocket counting down numbers?"
FRC holder: "That's just money I'm going to use where there is limited internet."
TSA Agent: "Place your hands on your head."
 ;)

I wasn't understanding what you meant. Let me think more about it.


The public address should be visible for recipients to be able to check the current value and the holders can include add funds instead of sticking stamps if they want to keep a round denomination. Not very practical.
Yes, physical bitcoins are superior. Is that really so important? People are paying with phones in Kenya (http://gigaom.com/2009/03/11/kenyas-mobile-banking-revolution/).

FYI, I added Freicoin to the Wikipedia article about Demurrage (http://en.wikipedia.org/wiki/Demurrage_(currency)#Current_examples).

I still don't get the distribution plan of Freicoin. How do you plan to make it wildly used? There are clear incentives to acquire Bitcoin, while I see no incentive to acquire any Freicoin. Without such incentives, the project will die out eventually, won't it?

My guess is that freicoin would need to be pushed rather than pulled. Notably absent from the nice book with all the nice stories from different types of people about why they like it how good it is for them etc is a detailed examination of the circumstances of its printing. Some magical money-management office supposedly watches some kind of price indicators or something and prints as much or as little as is needed to stabilise prices, but no examination is there of how much their buddies benefit from being the first people to get their hands on the newly printed money type of effects which seem to be one of the main complaints about the "print more money" method of making money constantly drop in value.

If people actually want money, rather than merely wanting the match-up-with-trading-partners function money in its capacity as a medium of exchange provides, they presumably would choose bitcoin. So it seems to me likely it is up to those who are giving out the money to push freicoin, so that bitcoin is just another thing one can choose to spend it on. Given bitcoin, I am not sure how to motivate people to spend it on freicoin, but presumably who-ever is printing it, which usually seems to be assumed to be the government or community services offices, is going to prefer to spend it than to spend bitcoins.

Since the current implementation seems to plan to have the miners print the stuff, maybe some of them will buy hardware instead of buying bitcoins?

Normally the printer of a currency is the initial main backer of it; the government that prints it for example also offers to accept it in lieu of taxes.

So maybe we need mass production of dirt cheap ASICs one can buy with freicoin in lieu of a government that does the mining and accepts the coins as taxes? The ASIC factory runs lots and lots and lots of ASICs itself and sells them dirt cheap in limited quantities per family or something to try to make sure individuals or families hold, between them all, at least 51% of the total hashing power?

The whole business of the decay of the value of money forcing people to spend it seems to pre-suppose that someone does stick them with that kind of money in the first place. Thus that it is pushed rather than pulled: people don't go looking to buy some, they get stuck with it when they try to sell other things, presumably because it becomes easier to find someone willing to pay you in this stuff than it is to find someone who is willing to pay you in gold or silver (or, nowadays, presumably bitcoins or maybe even some kind of fiat whose inflation rate is less than the freicoin's demurrage rate).

Merged mining seems to make most of the altcoins that can be merged-mined almost free. It seems believable that people would prefer to pay you in coins they get pretty much free alongside the bitcoins their mines are primarily intended/used for than to give you bitcoins. I had in fact imagined that simply by occassional adding of yet more new blockchains to the merged mining mix the values of the merged altcoins would tend naturally to fall since more chains can be added any time supply of altcoins falls low enough for them to start growing in value. Freicoin would just be an altcoin specifically designed to go down in value even faster than most altcoins...

-MarkM-

Now I have not been a fan of proof-of-stake, but in this case, if demurrage is included it could work. This would allow Freicoin to grow slowly without the worry of a 51% attack, yet would also encourage mining. Meni's proposal for proof-of-stake leverages mining blocks generated by Proof-of Work against stakeholders that control actual transactions, but not new blocks. This would allow hashrate to shift the power of stakeholders in the case that a malicious monopoly ocurred.

Freicoin is just another scam to prey on stupid people. Remember that they ask for $28,000 to do a simple fork of bitcoin...
 

Thank you.


If you buy 100 btc at 0.01$ (all of them) and sell them a year after for 100$ (1$ for each btc), you've gained a lot.
If you buy 100 fcn at 0.01$ (all of them) and sell them a year after for 95$ (1$ for each fcn), you've gained a lot too.

I don't see how the initial incentive is so much better for bitcoin.


You've probably read some other proposal on the freicoin forum.
No. Freicoin monetary supply is fixed after it has converged. In fact, more fixed than bitcoin's since it recycles lost coins through demurrage.
At convergence, the reward for the miners is equal to the total amount charged in concept of demurrage fees.

Again, freicoin is not designed to go down in value. The holder sees its funds decrease with time, but the unit itself doesn't. He just has less units.

I'm curious. How this relates to freicoin or bitcoin?

That's the wrong comparison. Freicoin value should be thought of as Bitcoin X USD (1 FC = (FC/BTC rate) X (BTC/USD rate)).
The reason for this should be obvious, but I can explain further if required (one word - psychology).

So, the right way to judge Freicoin speculation is "buy X Freicoin for Y BTC, and measure the value in BTC in a year". Is there any reason to believe that the ROI, when measured in BTC, won't be negative?

No, not at all. Here's how it will work:

• collect lots of $$$$$ from donations
• release the shitcoin and mine it for some time to collect lots of freicoins
• release promotional materials to create demand for freicoins
• dump freicoins and disappear

+1  ;D

Good old tried and true... what better way to promote your found interest in manipulative economics!

It could be positive. Remember that freicoin starts from zero.
Even if you count your gains in bitcoins...

If you buy 100 fcn at 0.01/6 btc (all of them) and sell them a year after for 95/6 btc (1/6 btc for each fcn)

the deal is nice. Why bitcoin can rise in usage (and therefore price) and freicoin can't?

If bitcoin protocol is going to start tracking interest rates in terms of numbers of blocks mined its a bit more important that the network stays at a 10 minutes per block rate.

So the charts were an answer to my "50000 blocks per year instead of 10 min per block"?

The charts were part of a design to a control system that will allow faster and more accurate adjustments of the difficulty.

Now I get it.

I'm basically done with it. Here is the output of my bitcoin test client on the current block chain. This is a sum of the accumulation of all "errors" that the controller would try to remove from the current system. The vertical scale is roughly time between blocks(the units are unspecified due to filter overlap), and the horizontal scale is block number/72. This means the network would readjust once every 12 hours (72 blocks)

https://i.imgur.com/sGk6z.png

Positive slope means easier difficulty, negative slope means harder than current controller. Zero slope means the current controller is good. This is inverted from the graphs on sipa's website you've probably seen before.

Interesting.

What may be more interesting is that the entire community regards this as being impossible.

To those of you who are claiming what we are doing is easy or a cheap scam, think again.

Hard to believe it takes $ 28,000 to create a few graphs based on a very bad idea. Regardless of how technically talented one might be.

Super-big thanks to @jtimon, @galambo, and others who have replied while I was super-busy.


A demurrage currency results in lower interest rates, which benefits entrepreneurs and operators of stable businesses. Compared with other forms of currency it encourages investment in real capital and increases in productivity. It rewards sustainable enterprises and long-term thinking while punishing exploitative endeavors or shortsighted choices. With a demurrage currency cash flow, not immediate return, is king.


Thanks for the feedback; I will add a FAQ entry.

In the current implementation, all outstanding/unspent outputs decay in value slightly with each added block. For a transaction to be valid, it must include enough inputs to cover the specified outputs after accounting for decay. (Aside: this makes it possible for a transaction to ‘expire’ if it is not added to a block before its inputs have decayed to less than its outputs. We are investigating methods to transparently mitigate the consequences of this.)

If someone chose to hold the currency forever as a backing for another system, they would be free to do so. However the value of the coins they held would still decrease--even if that decrease never manifests in the block chain--because the loss would have to be realized should the coins ever be spent.

Gesell doesn't quite fit into either camp; he and his theories stand alone.

Remember: Freicoin is not a store of value. Bitcoin or gold (or whatever) can be used for that purpose. Since freicoins are only kept between transactions and in enough volume to have a cash flow buffer, the actual Freicoin market cap will be rather low. It will consist mainly of the liquid wealth that people use in day-to-day transactions, not savings.

So yes, something like 4% to 5% of the market cap per annum will go to securing the network. But the market cap will probably be orders of magnitude less than GDP of the Freicoin economy.

Currently there is a Bitcoin-like fixed subsidy that halves in value every four years, to which is added the total loss due to demurrage and transaction fees (if any). This means the generation curve looks exactly the same as Bitcoin, but the block-reward has an uniquely different profile. It'll grow exponentially until all coins are generated, although with the rate halving every four years with sharp discontinuities. Eventually it will reach an equilibrium at about 40% the original subsidy. value.

I still don't see a need for the values used by the blackchain to change.

Only the disply and input interfaces need to adjust the numbers in accordance with whatever date+time is of interest. The blackchain can deal entirely with epochal coins. To keep the generation rate constant in terms of at moment block is made value, just apply the inverse of the demurrage rate to the number of coins generated.

That is, if the actual dcoin number/value of 50 epochal coins at some future block is 5 but that block is still meant to produce 50 that day coins, have it generate 500 epochal coins.

Eventually epochal coins will only be worth a that day satoshi each but that will be far in the future and the generation rate can still be climbing then.

For example if each block always generates 50 coins adjusted for demurrage to come out as 50 of that moment's coins in value, and coins fall in value 5% per year, eventually total quantity surviving will stabilise as the equilibrium between the minting and the demurrage. There should thus be no need to ever change how many (that day adjusted) coins are minted per block, but the number of epochal coins that many coins corresponds to will keep climbing as epoachl coins continue to fall in value.

-MarkM-

Blockchain values aren't changing.

What you propose would work, but it's more complicated. I'm sorry, but I really don't see the point.

One of us is probably misunderstanding the other.

You keep seeming to say that when you pass coins from one block to another you have to adjust them for demurrage.

I think that creates complications that are not needed. Demurrage can be done just in the client, the blockchain does not need to do anything about it except to grdually increase the number of coins minted per block just enough to make up for the demurrage so that once the equilibrium amount of money is in circulation the slowly increasing number of coins minted per block keeps that number in circulation.

You basically only have to change the input and output display of numbers so that the same number in the blockchain displays as a lower and lower number over time and the numbers people type in as the actual at that moment value they want to talk about refers to a larger and larger number of blockchain-representation (epochal) coins as time goes by.

Basically if at the epoch I tell a client to send you 100, the blockchain representation will be 100. A year later though if I still say to send 100, of that day's coins, then on the blockchain it will show something more like 105 or so (100 * 1/0.95).

Similarly, if the genesis block mints 50 coins as represented in blockchain-notation (epochal coins) then when someone displays that amount in ten years or so it will be displayed as some 25 or thereabouts of that day coins.

The whole complication of changing the quantities as they go from one block to another just makes it all harder by not changing the values until they move. Since the values actually change whether they move or not it is best to have the demurrage - the change of value - take place constantly simply by having it happen in the display routines. At any time anyone can thus select a date as of which to display the values and look at any transactions or balances in the blockchain in terms of the actual value they did have, do have or will have at the specified point in time.

-MarkM-

Hmm. Perhaps.

I have to think some more to give a full opinion.

ELI5 (http://www.urbandictionary.com/define.php?term=ELI5) - if you admit Freicoin isn't a store of value, when in people's "money flow chart" do they buy Freicoin? If they store their wealth in Bitcoin in the first place, why not transact in Bitcoin?

When does a rational economical player decides to buy Freicoin?

I think that a common option will be just accepting them.
Maybe people also buy them from fiat rather than from bitcoin.
Arbitraging could be another reason "I'll buy some of these freicoins and see if they get to half a dollar".
But the questions is, Why would the merchant not accept them?

I wouldn't. Why should I? They're a poor store of value, so it just adds the extra overhead for me of converting them to Bitcoin.

Yeah but the payment processor takes care of that for the merchant. For the merchant it should be simply "do you want to accept the full range of currencies supported by the payment processor or tell the payment processor to refuse customers who certain currencies (and if so which supported currencies do you want the payment processor to reject?)

Basically you tell your payment processor how much of what currency you the merchant want for each item you are selling and as long as the payment processor gives you that what skin is it off your nose if they choose to accept cows or chickens or diamonds or lead or copper or gold or fiat or even solidcoins as long as you get the quantity you specified of the currency you specified?

-MarkM-

Fine, so in this low friction scenario the merchant has no incentive not to accept Freicoin because he can instantly convert it to BTC with almost no fees. What is the motivation for the user to pay using it? What is the kickstarting force?

Bitcoin has a network effect that translates into economic incentive to use/hoard it, plus real advantages over traditional payment options.

What is the benefit, to users, of Freicoin? The benefit should be stated as a local advantage of a single user that would drive him to acquire, use and hoard/save Freicoin over Bitcoin.

I'll buy them as a speculator, because I expect their price to rise, the same reason why I own bitcoin.
The second reason is that they're easy to spend, just like bitcoins, much more convenient than fiat.
But you would say, why buy them INSTEAD of bitcoin?
Maybe ideology is needed for bootstrapping, the same happened with bitcoin.
After it has some value, merchants just don't have any reason not to accept them. And when they accept them and spend them directly for wares instead of using bitcoin as a proxy, they're turned into users.
Imagine I accept 100 fcn for a ware. I take 1 month to spend them, so I will pay (100 * 0.05)/ 12 = 0.416666 fcn on demurrage fees.
If I sell them directly for bitcoins when I get them, I may pay much more in fees and market spread. When the bitcoin base stops growing, you may pay the same or more in transaction fees. People will just try to minimize fees. If the don't need to have much liquidity for their business, freicoin can be cheaper for them.

WTF?
I mean...Where's the FAQ?

I don't think this is a smart reason.

"I will buy it because it will rise because other will buy it because it will rise ... "

Yes, Bitcoin behaves very similarly to this, but Bitcoin has a clear advantage over its predecessors, while it seems Freicoin has no such advantage, and has to compete with a big market leader, and Freicoins "feature" over it is actually a deterrent to acquiring/hoarding it.

Well, good luck with it ... time will tell whether I'm right about it or not.

Er... you'll speculate that their price will rise faster than they'll incur demurrage fees? Isn't the idea of Freicoin to discourage hoarding? Now you're saying that the only way it can take off is if early adopters hoard it?

If Freicoin had been the first crypto-currency, it might have worked. In fact, I believe it would have attracted a very different crowd and attitude too. But as others have suggested in this thread and I'm sure I have at various points in the past, Freicoin isn't going to bring anything new enough to the table. Maybe when bitcoin collapses another 2 or 3 times people will be looking elsewhere. Freicoin is apparently going to still be based on many of the same principles but with the "losing money over time" feature, so I think that it is destined to be JACC* and not really a successor. You should be looking to beat bitcoin to a pulp with the awesomeness of your currency, not "well, Silvio Gesell says this.."

* just another crypto-currency

As for the initial distribution problem, newly-generated freicoins will be sent to the miners. The problem won't be “how do you get people buy freicoins?” but rather “how will we give the miners something to buy?” Initial liquidity may be provided by someone like @jtimon investing based on perceived future value, but this would a relatively short-term stopgap measure until the merchant tools are in place and full circles of commerce can be established. Shortly thereafter market forces will stabalize the Freicoin price, and it ceases to be worthwhile investment to hold on to.

@Etlase2, this isn't a competing concept to bitcoin. In fact the two are completely complementary, and gain value from the existence of each other. I don't believe bitcoin will collapse, and I'm not looking to replace it. If successful we will change how people perceive and use bitcoin, but in a positive way.

@jtimon, there isn't a faq per se but there is a series of questions-and-answers at the end of the campaign proposal.

I still don't see why anyone would, say, exchange their bitcoins to freicoin in order to spend freicoin, when they could just spend their bitcoin instead. In what way does bitcoin gain value from freicoin's existence?

If given that choice, of course spending bitcoins directly is the rational decision. But it's a false alternative. What if you have freicoins (because your business accepts them, your pay is in them, or whatever)? Then it makes sense to buy in freicoins instead of converting to bitcoins first. If you have fiat, the choice between the two is negligibly different.

Let's walk through this...

In the beginning, the only people who have Freicoin (or historically, Bitcoin) are the miners.

With Bitcoin, people had incentive to purchase them from the miners because Bitcoin has unique utility.

Freicoin does not offer any increased utility compared to Bitcoin, so what is the incentive for someone to purchase coins from miners?

If there is no incentive, then the only way for freicoins to begin circulation is for miners to spend them. I don't see this is as being a strong enough driver for adoption, but it is something. In order for this to be successful, there would have to be a significant number of merchants selling goods or services that miners wanted and accepting Bitcoin through a third party that could also allow them to transparently accept Freicoin. I just don't see it happening.

And this is exactly why your currency will fail. You don't want to compete, you want to make a feeble bitcoin clone while testing demurrage. With the unbelievable number of problems with bitcoin, you choose to ignore them all except one and use a school of monetary thought to feebly add weight to your claims of what you think will happen.


Yeah people will perceive bitcoin as more valuable and demand it more often than freicoin. The only time I see freicoin being useful is during a price shock period in bitcoin. But because freicoin is still using the same or similar distribution, it is going to have the same problem. All other things being equal, and all other things will be equal, bitcoin will either have a better return for taking it over freicoin, or they might be about equal but freicoin came second. The idea does not compete at all.

Freicoin is definitely a step in the right direction, but it is not nearly enough to overcome the first-to-market power of bitcoin.

Etiase, I don't want to hijack the thread, so maybe we should discuss this offline, but if you have written down a list of the problems you see with bitcoin, that would make for interesting reading.

I don't think so although throughout my various proposals I've definitely expounded on a bunch of them. Freicoin may have put a chink in the armor of bitcoin's closed money system, but it doesn't address the underlying manipulation potential. And even free from manipulation, it very, very poorly handles rapid expansion. This is going to set either of these coins back time and time again or until something better comes along. Every new market will be strangled by having to lower prices while everyone in the previous markets gets to benefit. It's silly. I don't have all the problems written down, but I do have most of the solutions here: https://bitcointalk.org/index.php?topic=91183.0 although I have not gone into much technical detail since I drove through most of that during the encoin process.

You don't see it as an advantage, because you ignore some of the costs associated with capital money, like capital yields that can't drop to zero by competition like other economic profits (therefore they're capital rents to a certain point) or monetary cycles.
You don't believe a world with only bitcoin as currency and without fractional reserve would cause monetary cycles, but it would, just like gold has caused them many times before. My point is, they will have a value before merchants accept them.


Yes, sound kind of contradictory. Hoarding it may make sense while the number of users keeps growing.
The point I was trying to make is that they will have a price/value before eny merchant accepts them, just like bitcoin had.
I was thinking about the regression theorem there. Was trying to answer the question.
 

I expect it to have a more stable value. What do you think about it?


Exactly. A money will always need merchants. I was just talking about the initial value.


Should we start a wiki or something?


I hope you're wrong here. But of course I can't prove it.

I think that's like saying you'd prefer an 8.7 earthquake over a 9.0. Sure it's better, but it's still going to be a really bumpy ride. If the entire world adopts bitcoin or freicoin, freicoin would work much better for the economy I think, but getting to world-wide adoption for either currency is a pipe dream with the millions of percent increases required in the value of the closed currency system. If traditional monetary systems start collapsing, closed money systems are going to enslave, not free.

Perhaps, but at least they won't enslave people through crony capitalism and printing money with zero percent loans for the elite. In fact, I'm really not sure how they could enslave people at all with Bitcoin. Please enlighten me.

So here you agree that it is a possibility, and quite easily identify some popular mechanisms for the status quo enslavement.


... and within the span of a sentence doubt yourself. Hindsight is 20/20 cbeast, and most people don't learn very much from history anyway.

Ah, so hindsight enslaves people. Interesting.

No, hindsight shows that people think that they're not making a mistake when they are. I can posit scenarios which I've done in several threads, but I can't prove anything beyond the fact that the sheep go "baa". Did you actually have a change of heart mid-post? Or did you just remember some bitcoin gospel that says that I must be crazy to think there is any potential problem with the bitcoin monetary system?

Either way, this is a thread about Freibitcoin, and I won't change your mind about anything so I won't waste anymore time.

What is a "closed" monetary system? A link to those posts where you show how Bitcoin enslaves people would be helpful. I've just been skimming over the EnCoin stuff until it has a working alpha, and almost entirely tune out the "I discovered Bitcoin's fatal flaw!" posts.

A system where the people who have the money control the money. Money needs to be a tool, not a scarce resource to be manipulated. It stores value and facilitates trade. The bitcoin mentality has it so ingrained that scarcity matters because that's how gold works, and gold was less abusive because it was somewhat harder to control than fiat. But gold was still controlled very heavily. This control was originally separate from government so you can't go blaming them. The same thing will happen with bitcoin. If it were freicoin, I don't doubt it would happen there too because you will eventually get an upper class that can start manipulating supply--it would be more expensive though.


:shrug: I don't worry about that stuff anymore. Now it's just about refining all of the ideas.

Scarcity obviously does matter. The alternative to scarcity is superabundance, and why would you offer goods or services in exchange for something you already have in whatever quantity you happen to need? A currency has to be something people desire, and thus will trade for, and that means it has to be scarce.

Of course, there are different ways of ensuring scarcity. You can trade in something that is inherently scarce, like gold (due to nature) or bitcoins (due to math), or you can take something which is not inherently scarce and use force to make it so, as in fiat currency. This seems like a third way, where the scarcity rests on the difficulty of getting existing currency-holders to agree to devalue their own shares, with no apparent benefit to themselves. I'd say that represents a fairly strong guarantee of scarcity, though why anyone would expect others to prefer it over BTC is a bit of a puzzle.

The alternative to scarcity is not necessarily "superabundance", there might be a mythical third option where there is "just enough."


Because an appreciating currency is a bad thing for investment. I've mentioned in other threads, if businesses can't get BTC loans because they are untenable compared to fiat loans, businesses are not going to accept BTC for payment. This means, wait for it, in the real world, BTC is never going to become as popular as it could be. The price fluctuations, up or down, are going to be very unappealing. Instead of BTC bleeding value off of fiat currency to itself, it feeds from its very own instead. https://bitcointalk.org/index.php?topic=91183.0 if you have any questions about that, ask in that thread.

"Mythical" is correct. Your "third option" is just a point close to the boundary line, but still on one side or the other. If the way a resource is allocated matters--if there is any need whatsoever to balance competing demand for it--then it's scarce. Otherwise, it's superabundant. There is no middle ground.

This is a blatant non-sequitur. If businesses can't get loans in BTC because the rate of deflation is higher than the prevailing interest rate, that means BTC is more valuable, and the demand for BTC as payment will be higher, not lower. Businesses are not going to arbitrarily turn away a form of payment which will increase in value after they accept it. The problem (if any) is getting buyers to part with it.

The more typical complaint regarding appreciating currency is that no one will want to spend it, knowing that if they wait it will buy more in the future. Of course, that doesn't take into account that at some point present demand exceeds the net present value of the currency, even if that currency is appreciating, or that the seller can take appreciation into account when setting the price (which generally works out to the seller's benefit, as the party with the lower time preference). There have been markets with consistent relative currency appreciation before (e.g. electronics), and trade didn't come to a halt because of it.

Many in the community think Bitcoin has value something simply because scarcity is programmed into it. I agree that this, alone, is meaningless.

Freicoin will be more stable for those that actually want to conduct business with the currency and not have to worry about it greatly appreciating (or depreciating) due to external circumstances.

As to your currency proposal, Decrits/EnCoin -- I don't to see any evidence you are actually working on it, or know how to make it happen.  Other than "it would be nice if my currency had a stable value" I don't really see anything. Mark spells out precisely what the mechanism is used to achieve stable value, and it will work.

I do not have the technical ability to make Freicoin or any other cryptocurrency happen. Mark does. So I help in what ways I can. If you believe in your EnCoin idea you should help too, because this is your best bet for it to actually happen. One step closer is vastly superior to nothing at all.

But this simply is not true. They will have to worry about it greatly appreciating every time the network expands, just like bitcoin. It's going to take what, 15 years for half of the money supply to recirculate?


And I don't see any evidence that you guys are working on anything either. Just asking for $28k for a couple line changes and to create advertisement. Freicoin was proposed over a year ago and the best this group has come up with is a webpage to ask for money. Demurrage is not some precise mechanism that will bring a stable value on top of an inherently unstable coinbase, no matter how well Mark may be able to spell.


Anything built off of bitcoin just isn't worth the time. And you guys should be very careful about merged mining when there are 12-year-old l33t h4x0rz running large pools.

Yes, freicoin will have price deflation when the network expands.
But who exactly need t worry about it? Mainly borrowers, so they won't denominate their loans in neither bitcoin or freicoin, at least until those risks become smaller. I don't expect merchants to price in freicoins neither, at least not soon. But bitcoin seems to be dealing well with that "problem".
You can define a stable unit like usd1970, terras, a basket of 30000 different goods and services or whatever you prefer. But you cannot create a cash-money that ensures a stable price. Well, you could do it with a central bank issuing monopoly freigeld. But you can't do it without manipulating the market or redistributing wealth somehow.
The only thing a cash-money needs that bitcoin doesn't have is a compulsion to circulate.
For the financial problem, I think we will see some innovations too. Decoupling loan contracts from cash-money units and using indexes or virtual baskets instead. That way you may not need to factor the inflation premium into the interest rate.

Why does cash-money require a compulsion to circulate? I'm sure you'll explain this away as saying you didn't really mean this word, but something like "incentive", but I find it interesting nonetheless.


Do you understand the concept of time preference? Even if the exchange rate between bitcoins and some good I desire is constantly changing in my favor, I still desire that good and at some point my preference for the good now overrides my preference for a lower cost later. For a real life example, you must look no further than consumer technology like computers and televisions. If I wait a year to buy one, the cost will go down and the quality will go up. Yet, I still buy one today because otherwise I will be forced to go a whole year without.

EnCoin is "manipulated" by predetermined rules. Instead of a specific quantity of coins, it has a specific difficulty based on Koomey's law. This introduces trust/coordination problems that are addressed in different ways, but it doesn't introduce money supply manipulation.

You claim that bitcoin is doing well, but we don't know what could have happened had it not already experienced a bubble. But c'mon, the system is just designed to bubble and burst. It may always end up better than before the bubble, but the waves created in the mean time will be fierce.


I have definitely conceded these things with my own latest proposal, and I think it is a much saner system than bitcoin's or freicoin's.


This all sounds nice, but you still need to get away from limited supply and the rest of bitcoin's archaism such as using energy to secure the network.

@Etlase2, @jtimon and I simply don't agree with your conclusions, and we'll have to leave it at that. Let's please leave discussion of your proposal to its own thread.

At the very least you could stop wasting thought energy on how to implement pruning. Switch to an account ledger instead of a transaction ledger. If at the very least you want to accomplish something, you should try some major improvements on the protocol. That way at least there is actually progress instead of sidegress.

That wouldn't be progress. You can't operate a lite-client with full-node security using an account ledger.

You absolutely can. There would be little need to even make the distinction of a "lite-client" with an account ledger. Try thinking outside the box just a little bit.

I still don't think $28k is necessary to get a project off the ground.

Using energy to secure the network isn't bitcoin's archaism. Using energy to secure the financial system is a condition that has existed for all of human history. The question: how much energy?

I think Bitcoin uses a lot less energy than any other possible solution. We're trying to trying our hardest to turn the economy from a horse and buggy to a Carnot cycle. Anybody with notions that the Bitcoin method of securing the blockchain is not "sustainable" or "green" has not considered how much energy is spent in just one day of a War. What are we not trying to do? We are NOT trying to create a perpetual motion machine.

Thanks, Etiase

You say it's not archaic, then go on to say this is the way it has been done for all history.  :)


I'm not saying it's bad because it uses energy, I'm saying it's bad because it's not secure (he who controls the hardware and/or money controls the money) and it only encourages wastefulness when it is not absolutely necessary. Every tx fee or every amount of demurrage is going to have to be paid for again and again and again. But getting around that is more complicated than switching to an account ledger, I think.

Having a paper backup does not make your money less secure. Paper, electronic, and brain wallets all work together to provide the ultimate security. The only thing I don't like about paper wallets is the current single address. There isn't a good way to encrypt them to prevent theft. Paper wallets will greatly benefit from multisig.

That is hardly a weakness--it is exactly where the security of bitcoin comes from!

But regardless, although this is an interesting and valuable discussion, it should be held in a separate thread; we have wandered significantly off-topic. Freicoin is and will always be a proposal within the framework of bitcoin-like systems.

It is most definitely a weakness. It makes perpetuating an attack on the security of the network trivial. It also means that if any one of the networks based off of bitcoin is attacked, they can all be.


While devising a new security system would be difficult (although I suggest you take a long look into the idea of a weighted block chain that I briefly talk about here: https://bitcointalk.org/index.php?topic=64637.0), the account ledger really would not be that much effort. But if you'd rather not make any steps forward in crypto-currency technology, that is your unfortunate prerogative.

...it would be hard for freicoin to have much value if everyone who got some realized they could grow their freicoin wealth by selling, buying anything inflating at less than the freicoin rate, and just waiting. This scenario benefits the last adopter most.

@maaku
Sorry about going off-topic.


I wasn't thinking on those definitions, I was just citing Gesell translated to English (http://www.community-exchange.org/docs/Gesell/en/neo/part3/13.htm):
"I have denied that paper-money as we know it (without direct, material compulsion to circulate) could ever be as closely adapted to supply as a regular exchange of wares, national and international, requires".
Note that we, unlike him don't aim an elastic supply. But also note how he criticizes the current Keynesian model.

Anyway, back to your question:

Otherwise it opens the possibility for the money holder to lock the medium of exchange, refusing to spend, invest or lend it. He can enjoy an economic rent in the financial market Gesell called "the basic (http://www.community-exchange.org/docs/Gesell/en/neo/part5/7.htm) interest". If he doesn't get it, he hoards. And that's what happens when iterest rates go "too low". Forget central banks manipulated interest rates, I'm talking about a problem that gold-money has.
Capital yields and interest rates are directly linked. By virtue of continued investment and capital accumulation capital yields drop (economic profits (http://en.wikipedia.org/wiki/Economic_profits) tend to zero in perfect competition (http://en.wikipedia.org/wiki/Perfect_competition)). But there's an artificial lower bound (the natural would be zero), the basic interest. You prefer to hold the money yourself rather than lending it at 0.1% interest, even if is inflation and risk free.
Holding money represents an insurance against uncertainty. Instead of owning real wealth that perishes or suffers storage/maintenance costs, you own an everlasting wildcard. This free insurance the hoarder does not pay for constitutes an economic rent (http://en.wikipedia.org/wiki/Economic_rent), and must be paid somewhere else. The terrible byproduct of capital-money is a rent protection for lenders and capital owners (because the investments stop below the basic interest).
When interest go below the basic interest hoarding increases, which causes price deflation which encourages more hoarding.
The financial market gets also severely damaged by the deflationary spiral, but if the governments don't interfere, unemployment, capital destruction and lack of new investments (a war can serve too) rapidly lead to a new price equilibrium where interest rates are well above the basic interest again. The monetary cycle has ended and starts again. Messing with the monetary supply first through fractional reserve banking and then with central banks has been proven to be unsuccessful I guess we can agree. It's about velocity not quantity.

In summary:

1) Because everlasting cash-money springs economic rents
2) Because everlasting cash-money causes monetary cycles.


Yes, I do. But we disagree on what causes it. You think time preference causes interest. I think interest causes time preference.
A simple proof is that different money designs produce different interest rates. Another thought exercise would be "Why the time preference is never negative, don't we ever prefer things in the future than in the present?". The austrian concept of time preference only applies to capital-money: you don't necessarily prefer 5000 fresh oranges today over a fresh new orange for the next 5000 days.
But the point you're making is that growth caused deflation isn't bad. I agree, that's why Freicoin has a fixed monetary base. More fixed than bitcoin's by the way.


Freicoin is not inflationary. If you mean that people would prefer a better yield than -4%...I say more, they will prefer 0% or more. But this medium of exchange is not for saving. If you want to save with it you must lend.
I don't see how the last adopter gets beenfited.

isn't demurrage/inflation onlyuseful because people desire to "exchange" their depreciating money for something that does not depreciate as quickly (or at all, in bitcoin's case)?

I would think that a currency like this would be impossible to bootstrap without great influence (i.e. govermental influence), especially in bitcoin's digital arena.

It is also useful to trade for other wares that unlike bitcoin or gold, perish like freicoin. Apples, fish, labor...
Others don't perish but incur in storage costs.


We advocates and other crazy people will be enough to give it a base price. After that price, merchants don't care about the absolute price, if they must put a lot of zeros with their prices denominated in fcn so be it. Think of bit-pay and bitcoin, for example. It makes possible for merchants that don't want to have any assets denominated in bitcoin to accept them.
A currency needs users, not necessarily hoarders.
Anyway, let's see what happens. This is not going to have governmental influence so we'll be able to know if your assertion is accurate.

I think the idea is that you can pretty much mine it at the same time as bitcoin for pretty much zero cost, so you will at least have a lot of willing sellers, hence a reason for merchants to trade in it.

One thing is for sure I would spend freicoin more readily than bitcoin. I think thats the point....

hot potato! hot potato!

Yes, that's the point. You give your wares and then you want other people's products in exchange. Freicoin is only the middle man: you don't want to deal with him for long periods. It's like going from city A to city B: you don't want to stop in the middle of the road. And you can harm other drivers by doing it.

The value sent / market Cap ratio will be much higher than in bitcoin. With higher velocity a currency can conduct more trade volume with less capitalization.

Money as a road... I think this metaphor may be worse than the internet as a series of tubes or a bunch of trucks.

Is it bad because roads serve to move wares around and capital monies sometimes don't?

burrrrrrrrn

Yes, sometimes they don't. Like when people want to save.

People saving doesn't imply people hoarding. Anyway, I was referring to monetary cycles. A sudden and destructive slow down on the velocity of money. My reasoning on this is on the deflation post.

http://www.indiegogo.com/freicoin

OK, time is up, 1181$ collected. So what's next?

Will you still do it or bail out with you funders money? lol

Seriously, I would like to know what your plans are.

We're working on a beta, to be released within a week or two. Discussion is happening on the freicoin forums:

http://www.freicoin.org/ (http://www.freicoin.org/)

We're nearing feature-freeze for the beta. The beta, release planning, and launch will all occur on the Freicoin forums. This very well might be my last post on the topic here at bitcointalk. If you haven't yet, I recommend checking out the Freicoin forums:

http://freicoin.freeforums.org/ (http://freicoin.freeforums.org/)

I just had an idea related to demurrage:

Instead of a regular bitcoin distribution scheme make all coins ever to exist instantly available. Provide a mechanism called "decay" where miners can vote on the speed of the demurrage. The vote is written into the solved block and the network calculates the moving average just like the difficulty adjustment.
New miners will probably vote for a short half-life old miners for a longer one. It's basically the proof of stake mechanism applied to demurrage.

This way the coin can stay valuable and fluid even for the initial period when the economy grows at an exponential rate.

It's kind of hard to describe it without examples but I'm am pretty confident this would yield the fastest economic growth possible.

I think the problem with freicoin is it takes too much effort to explain to laymen. This means it wont be adopted easily.

Most people wont know what demurrage is

Most people dont like the idea of paying fees

The notion of demurrage discourages early adopters

Most people wont like trusting a "foundation" who gets a cut of everything (many organisations start out with good intentions)



Considering all of that, why not just go with the bitcoin model with a maximum number of blocks so high that would take millenia to reach the end point of. That way you would have your inflation component (printing of new coins) fixed, and wouldnt need to call it a fee or confuse laymen with terms like demurrage.

Inflation and demurrage are you it the same thing.

Its funny. You replace "Central banks" with "Foundations", and then give them direct access to taking money away from peoples' accounts.

Brilliant.

You're replacing one bankster with another.

Yea, I really dislike the idea of a "foundation" in both this currency and devcoin (I think? If I'm understanding it right that is...)

Who's to say the foundation doesn't just cashout all of their freicoins into another currency?

You are. Foundation coins will only be spent as part of a community vetted process.  You can join the conversation at freicoin.org.

I spoke out against centralization earlier in the project and my voice was drowned out by louder voices in favor. It's like arguing about a Wikipedia article.

If you really like Freicoin EXCEPT for the foundation, you'll have an easier time just forking it. If I wanted to argue about how my own money was spent on my behalf, I'd go to city hall.

Can someone explain why someone would want to convert BTC to FRC in order to exchange?  What is the added value of using FRC as an exchange currency?

They won't be "spent" in that manner at all. Your money? Either you mine and accept it or don't mine it. Right?

The work needed now is not forking it is developing a democratic means for the disbursement of the foundation funds in the form of prizes and grants to help jump start the use of Freicoin with things like Freiescrow... or Freibay trade sites etc. What is great about this fund is that it will be used, it will not be spent on the foundation memebers it will go to help develop Freicoin. That is something as a Freicoin user I support. Having put some ideas forward as well as putting in my own grant proposal I am hopeful we see a foundation actually form soon and form so that we the users have direct influence in what gets funded.  Rather than simply hating on the "centralization" you might want to rethink it and look towards a more PARECON model where direct democratic involved may infact help bolster the Freicoin and in the future make miners MORE MONEY... in 3 years hopefully most of the YOUR money will also be dispensed to the projects that we the users agree we need. If you have any ideas for projects post them up.

http://www.freicoin.org/how-to-present-grant-proposals-t146.html

http://www.freicoin.org/market-f8.html

Go here and spend your Freicoin that you mined or earned... traded for or bought.

Why are "spent" and "centralization" in quotes? The foundation will be spending funds which they automatically receive due to centralization.

I'm not simply hating on centralization because I've got a stick up my ass. Centralization creates a huge weak point. Should Freicoin ever threaten the powers that be, they WILL go after that weak point. Once cops/mafia/corporations kick in the door and demand private keys, our votes become meaningless.

And even with perfect security, one does not simply construct a fair voting system. Is it per person or per coin? Condorcet or range voting? Who validates voters? Will you support every language? Do I need government-issued ID? Can I delegate or sell my vote?

Good luck with that.

Luck not needed.

300 Gh/s and profitability at 200%.

Horrible.

Worst case scenario. They can't find an equitable way to dispense the coin. It is all sent to a throw away wallet and volia "DEMURRAGE" to the rescue coins go to the miners.

I think there are way too many naysayers who fail to give real workable alternatives a chance or put in the effort to make sure positive things will happen. FRC is a coin that is different and in "GOOD" way. Check it out. Mine it. Spend it.

Mining is not an equitable way to distribute coin to the majority of people regardless of how theoretically sound it is as a verifiable form of distribution. Unfortunately many people in this community live in a bubble where everyone has a computer, access to the internet and can figure out how to mine. Sorry but that ain't the real world. Sometimes less than perfect or less accountable ways may in fact be better for the entire population. You do have a stick up your ass as most people do when  it comes to the BEAUTY and EFFICACY of the mining model. It is flawed and the continual concentration of mining in fewer hands is the result. I'd rather have a cheap ID card versus a 30K mining rig just to get a ROI after 4 months. Yea real equitable if you have the money to invest. So ya there could be problems yet in the overall picture a foundation could conceivably distribute more coin to more people more equitably than the current system for mining. It is quite possible and given the people involved I dare say it will be fun to watch what develops from this experiment. People have shared wealth for within communities for hundreds of thousands of years. There is no perfect system but I think that at times humanity is quite capable of empathy and honesty, maybe sometimes the tech answer is not always the best answer as it leads to less empathy and there is no need for honesty as the system removes that from the equation... dehumanizing us in the process. 

I'm not doubting Freicoin's profitability for miners. I'm saying you need luck to structure the foundation in such a way that is resistant to corruption.

Although completely abandoning the egalitarian distribution you describe would be bad, I think the worst case scenario is even worse:
Freicoin proceeds as planned and does great things early on, using foundation funds to fund the poor and/or useful related projects.
Freicoin adoption grows to include millions of people and thousands of businesses.
Now that it looks attractive, foundation members get a knock on their doors.
Corruption is nearly invisible, and there's no clear line between a good investment and a bad one.
People continue to use Freicoin because of its network effect, and because only 49% of voters are unsatisfied by the foundation.

Just because it's a nonprofit doesn't shield the foundation from the immense incentive to control a monetary system. Conspirators will be sneaky and corruption not obvious to everyone. They'll focus on details most people don't care about, like your choice of voting system or voter verification.

I think there are too many ayesayers who ignore what I just said about previously getting involved. I even mined a little bit during the beta. I have given Freicoin a fair shot but I was done once everyone else decided to centralize the software.

This is pure political ideology. I'm talking about building a robust system against attack, not a wishlist of things we could accomplish if centralization didn't breed corruption.

Although "the rules" of the foundation are loosely defined in the forums and we
should formalize them, they're changeable, so we're focusing on bringing more
participation from groups that have more experience than us in participative
resource management. The distribution must be completely transparent, the
expenditures of the receiving party must be published.

We have to always keep in mind that the issuing is only a temporal situation, so
the coins will be issued anyway.

The plan B is always there, what's needed is to define the rules to activate it.
In the case of an openly corrupt foundation, it is obvious, but we need to also
define the rules for harder to predict scenarios like the one you've described.
If the task gets too big to be manageable openly, it could be considered that
the bureaucracy apparatus is highly abusable and the p2p price formation of the
currency is unacceptably compromised. The proceeds would be similar to the
anti-corrupt foundation hard fork: a new client is released with a checkpoint
on "the last acceptable block".
It would be a sad incident, because:

1) The fixed supply would take more than 3 years to be reached.

2) More than 20% of the coins would be issued through mining.

Although the foundation is precisely trying to avoid the second, there's many
ways things could go wrong. But it's never too late pray to the p2p goddess as
she forgives. It's never too late to ritually sacrifice kilowatts to the hashing
pyres in order to complete the sacred act of issuing cash. Maybe those ancient
shells needed some lamb blood mark on them to bu issued too. Since creating
value "out of nowhere" is a sin, now we know best way to "destroy" the
outcome of this value creation is by a competitive market that can bring profits
as closer to zero as possible, even if there's no real consumers for the
hash-issuing artificial market in the sense that no one really enjoys having
an over-secured network.
Although cash is an implicit agreement between its users, it's not tolerable to
have an explicit agreement between those same users because that could fail, as
the process is run by humans instead of computers.
Sorry for the sarcasm, but it has been easier for me to write it this way.

I think Jed McCaleb doesn't even think there's any problem at all. These are my
own words, so don't trust me on this and go search in the Ripple forums, but I
would say he thinks something like this for xrp:

It doesn't matter that the giveaways are abused or that we spend the issuance
ourselves, we can fund free software development with cash issuance within a
private company. Once the coins are distributed, there's no practical difference
for a new user between a currency that has been issued "ethically" and one that
hasn't.

And I think he's right, but that shouldn't stop us from trying to manage the
distribution in a transparent and participative way. As said, the hash pyres
are always there waiting for us, but I would be glad if you participated in the
fulfillment of this difficult task. We all know that giving money away is very
hard, that's why we need your help and many more people.
We will need to repeat a hundred times why this can only be made once to most
non-techies and non-austrians (for the fixed supply) who join, because we want
eventual full p2p, but it may result a great way to increase currency adoption.
I don't see why you can't join us and be ready for the cut foundation hard-fork
call when the currency objectives get compromised if that ever happens.

What is 'roughly' the current time to find a block @ 500 MH/S? Is it still 'worth it' to solo mine for FRC?

Difficulty is approx 20k, and is going to increase soon. You can plug that into various mining calculators to see how long it will take.

There's no reason not to throw your hash at p2pool, however, and you can run your own p2pool daemon if you want to avoid the fee.

There isn't much incentive for the Freicoin developers/foundation to establish a better way to distribute rewards while the current method (you as the gatekeepers) disproportionately favors your interests. You've contrasted centralized distribution of rewards versus cultishly dancing around a sacrificial pyre of mining rewards, but there are other decentralized options besides mining rewards.

A good example is Impaler's PoS voting idea (http://www.freicoin.org/post672.html#p672). Coin owners would vote on multiple budgets, and the most approved one would receive the subsidy/demurrage. I can understand your concerns with giving your power to the rich, but:

• They won't stay "rich" indefinitely because of demurrage
• They'll act in the best interests of Freicoin, trying to maximize its value much like shareholders do today
• It's much more secure from coercion than any centralized alternative
• The rich are contributing to the system and exposing themselves to risk by holding those coins
• (IMHO) Freicoin rich people are more altruistic than fiat rich people

And I'm sure there are other ways to decentralize distribution too. Right now you've got a half-finished distribution scheme that puts a lot of power in your own hands; anyone who supports Freicoin right now is saying they trust the foundation enough to give that power up when it's even greater.

http://1.cr.rs/

Good info right here.... We should reward Joe for his efforts... come on Foundation set up already and start giving some coin to these people who are adding value to FRC by their efforts.


http://www.freicoin.org/frc-foundation-grants-prizes-moving-forward-now-t250.html

https://bitcointalk.org/index.php?topic=182019.0

What should we do next... POST YOUR MILESTONE guides and lets get to the distribution phase already. If you actually CARE about this issue then you have to get involved and provide SOLUTIONS. Not much can get done if you simply bitch and moan about the inequity. Time to get on board and get some traction on this and have a foundation formed and distributing some of this coin now.

While I had some refinements and suggestions the original credit for that idea goes to maaku and is called 'republicoin'.  Also it is a tool for demurrage handling in perpetuity, not an initial distribution tool because it presupposes a wide distribution of coins to begin with to prevent capture of the electoral results.  Current miners are too small of a group and the foundation would with its share basically decide the outcome (if it participated).

Also your points show a misinterpretation of our motivations.  We do not begrudge the rich their wealth (we are not communists), we object to usury aka interest which creates illegitimate revenue streams.  We set up the foundation to see that the initial distribution of the bulk of FRC dose not become an illegitimate revenue stream for individuals who's merit and work consisted merely of being 'first', we reject the BTC communities self-serving belief that 'first' entitles people to any significant wealth from the Seigniorage of cryptographic currency.  People who hold cryptographic currency and try to hype it merely for purposes of self enrichment are engaged in boarder-line fraud and are in my opinion enemies of all legitimate currency be they digital, commodity or Fiat.  Also mere holding of money is not exposing ones self to significant risk and is by our interpretation counter to the purpose of money and actually represents a threat to the success of FRC.  Merchants are on the other-hand the far greater risk takers and are deserving of commensurate rewards and praise.

The idea of 'republicoin' emerged very late in the beta testing stage, only a month or two from the final release. At the time we were intending to give 100% of the initial distribution to miners, but none of us were completely happy with that result for various reasons including what @Impaler has said above. However proof-of-stake voting on budgets is only an idea at this stage, and one that is not fully fleshed out or tested. We don't know if it will work the way we think it will, with a Nash equilibrium settling in on a reasonable, fair budget compromise, or if tricky users will find ways to gerrymander votes for selfish purposes.

Initial distribution through a Foundation was a half-way compromise. It let us release now and focus on getting the currency widespread adoption, while also buying us time to figure out how to properly distribute those coins. However the hope from the very beginning was that republicoin proof-of-stake voting would be properly tested and implemented before the end of the initial distribution period, at which point we'd transition whatever centralized process we have to a distributed, p2p mechanism for determining what to do with those funds.

We could use your help, and the help of anyone interested in p2p, coercion-less governance by protocol in defining how budgeting and hybrid proof-of-work/proof-of-stake voting will work, writing the code, and testing it out.

That's why I stopped during late beta. You guys had a working 100% p2p currency and some interesting ideas on how to more efficiently distribute it. Then the foundation decided that raising/spending it immediately was more important than equal rules for every participant. For me, that compromise meant giving you guys emergency powers over the supply until a better solution could be found.

I'd be interested in helping with that better solution, but just grabbing everyone's money up front and working out the details later doesn't seem like a fair way to run a monetary system.

Wait, wait wait... instead of "republicoin" you guys came up with "give us all the coinscoin" as a half-way compromise? That's pretty insightful.

When are you guys planning on updating the marketing you have on various places around the internet to include _anything_ about this foundation (including the OP of this thread)? The longer you let this slide, the more you look like the shady crypto banksters that your coin blatantly argues you are (the code, not the webpages stating the exact opposite of course).

I didn't get a very good vibe from you early on in freicoin's development, and there still seems to be no reason to assuage it.

Well we weren't willing to wait, that was our weakness.

However one outcome is to sit on the coins and do nothing except provide a little bit here and there for the most widely popular and necessary grant proposals and infrastructure prizes, but let the rest sit in escrow being eaten away by demurrage. Once a proper p2p mechanism is in place (like republicoin), we could setup a cron job to spend the coins according to the current p2p budget. Indeed this is the default outcome we are currently on, since we are unwilling to spend the coins arbitrarily without community support.

The only thing holding us back from spending these coins via a p2p voting process is that such a process only exists now as an idea. Otherwise we'd be using it! However if you have time to contribute, we could use your help in creating just such a p2p distribution process.

EDIT: @Etlase2, honestly that's only really been a hang-up in the crypto-coin community, but getting it in use by people who don't evalutate it for its speculative value. In our conversations so far (with Gesellian monetary reform groups, for example) it hasn't been an issue.

I'm not interested in what Gesellian group-think thinks, I'm interested in why whenever I google freicoin I do not see anything about this foundation or how the currency is being distributed.

You are free to run your currency however you want. But your group keeping this on the down-low makes it seem as if you are ashamed of this feature.

I apologize if this sounds dismissive, but I have only a few hours a week I can devote to Freicoin and I'd rather spend that implementing infrastructure and new features (like republicoin) than handling non-essential PR.

It is unfortunate that dispelling the idea of being shady crypto banksters is not important to you.

That's silly, it's better to just work on the fix than to apologize for why it's not done. I'll bring myself up to speed on Republicoin, thanks everyone for your answers.

AFAICT, "republicoin" is just "vote for how we spend the money", not anything actually democratic. It does not appear to me that the foundation idea is going anywhere, yet there is no mention of this cornerstone of the freicoin design. You can P2P vote to your heart's content, and maaku can still buy a yacht with it. Not saying that will happen, but I am tired of shady people trying to swindle others in the name of freedom over this cryptocurrency bullshit.

I think this is what you were looking for on google: http://freico.in/how/

And as said many times, if maaku buys a yacht with the foundation funds or just if the distribution is not fully published as promised, the community will accept a hard-fork very fast. Please, read my post above for more on the hard-fork.
The way cryptocoins work, it is very easy to audit the foundation's expenditures, since all its funds are public in the block chain for anyone to see.

jti, you guys have no credibility whatsoever in my eyes. Last minute completely changing the idea of freicoin to give yourselves all kinds of power. Why should anyone care? Does anyone? What was the point of releasing when you did if you weren't ready to implement whatever system you have planned? Worried about missing the boat? Was Indiegogo giving you deadlines? The actions of your team do not make logical sense to me.

You have to take into account that we have different views. Personally I'm not convinced about the proof of stake voting idea (republicon), but many others think it would be the best and I'm open to explore new ideas.
The foundation is not a "last minute change" at all. Although I've been resisting to any alternative to mining distribution since I proposed freicoin until possibly the last months before release, the opposition to mining issuance has been persistent from great part of the community since the beginning, just days after the forum was created, you can check it out. Countless possibilities have been discussed, we have an specialized forum for that and there's more proposals dispersed in other subforums. I would even say that some people left the project because of my resistance against non-p2p solutions.
After many discussions I was convinced myself that although "mining is needed for security" and "miner's profits should tend to zero by competition", everyone else was right: initial issuance through mining is wasteful.
Not destroying energy to create the initial base being a want from the community is not surprising since actually some people are precisely attracted by sustainable investments argument that people like Bernard Lieater or Charles Eisenstein use in favor of demurrage currencies.
And I ended up agreeing, guilty on that. I know there's other people who would like to use a system like republicoin for part of the 5% demurrage too, but I think centralization is only acceptable if it's a one-time-only thing.
Actually I thought that "giving money away to good causes" would be simpler than it seems it will be, but we needed to launch before, because we need a price to calculate the amounts for the grants, and ideally some merchants on board too.
Unfortunately there's no place to look at to know the fiat price of FRC yet, and it's not easily convertible, so almost no merchants.
But one day the foundation will dispense some coins, and it will be good to have many vigilant people to guarantee that the funds are not abused.
Better issuing the coins by resource wasting than by corruption. But mining is only better than that, and there's actually people out there managing resources transparently using participative processes. So why not give it a try ourselves? The anti-corruption button is always there.

'Should' and 'is' are two very different realities:

http://blockchain.info/charts/miners-operating-profit-margin

hi maaku,
if I can help to design republicoin just let me know. I would be very happy if I can help to create republicoin.

Some questions about republicoin:
Should republicoin be another coin, or should it be only used to distribute the foundation money in a p2p way? Or should it later on also be used to distribute the new created coins?

In case of the freicoin foundation, perhaps it is good to mention and link the idea of the freicoin foundation on the main site. And also to mention the goal of the freicoin foundation.

I would offer here my help, but I’m not native English speaking.

Perhaps its good to consider to drop the foundation totally and concentrate on the republicoin concept?
Best regards,
Arcurus

Me neither. You are using the foundation as an excuse for not wasting effort mining. It's reasonable enough, except that if voting has anything to do with mining, it becomes a complete waste of resources again.


I'll take your word for it even though it took me completely by surprise after discussing the demurrage idea with you over several threads, and even registering on your forums. It still does not excuse the fact that this core idea is completely absent from all of your PR media.


Machinated excuse.


Vigilant people who are wasting tons of resources mining, right?

PS - http://freico.in/how/ this page is about as informative as Solidcoin's.

I have to agree with Etlase2 here, the whole point of bitcoin was to escape a system whereby few have power over all. This attempt at a currency seems to turn bitcoins philosophy on its head.

Well, in fact "help us distribute 80 Millions" has been a way to present the idea to many groups.
The foundation hasn't received many critics outside of the cryptocurrencies community. Many other communities actually complain about the 20% to miners.


Ok, it could be better. You're right, we should improve it.

If you want your currency to go anywhere, you're going to need more than the few dozen gesellians. You can have your utopian view of how you can distribute the currency, I won't argue that. What I will point out, again, is that you are not advertising this feature to everybody. And you seemed to have compromised your ideals in an effort to get the currency out sooner, for whatever silly reason.

please help me, I lost all my coin, I have backup my wallet.dat, my hard drive was corrupted, I have to sync my wallet on the new computer, but all my FRC no longer,
//I remember I have creating one new address in the my wallet,

PSST... want the rest of us Freicoin devoted Plebs like me to take up the torch Maaku?

Keep pluggin away man... very very happy with the coin. It's profitability and the fact the Demurrage will get this coin moving. I think the PR campaign is a simple one. Good devs, fair democratic distribution of foundation funds we all get a voice in and a lot of coin for miners who will eventually get every single Kria as the demurrage will slowly but surely right all the "evils" of the original dispersement through a foundation.

You can moan and bitch and whine but at the end of the day this coin will be there, it will provide a means to purchase goods and services and will be less likely to be hoarded. That for me is something to look forward to as well as 0% interest loans... ya 0%!

There are more than a FEW people out in the wild who see the value of this coin. Whether you want as a user to get involved is your choice but I bet you dollars to donuts that the "foundation" in whatever form will be what we make it. Not some imaginary redistribution of wealth nightmare the right leaning types who have been drinking the Ron Paul coolaid in the US think. I for one grow tired of the group think that somehow mining is the most fair and democratic way to dispense a coin when in reality the 99% of the planet who can't even afford electricity watches on. Might want to get your head out of your ass and participate in something that requires you to do more than sit in the balcony and heckle down like a muppet. There is certainly a bubble in this community and nothing seems to escape it very cowardly thinking it is.

You have supplanted the "system" with a network of miners who are continually consolidating their grip on Bitcoin.... over time Bitcoin will not be decentralized rather centralized in  the hands of people with more and more hashing power. Which do you want? A humane system where there could be errors in judgement or a system that eventually becomes the very thing you despise when the corporate takeover happens? I prefer to think that a foundation of the users for the users can work more efficiently than a system that is built on 1st world technology excluding billions of people.

I could really use a 0% interest loan personally.

I, for one, am not just sitting on the balcony heckling. I've spent the last two years designing an alternative (see sig)--coin dispensation sans mining, after a fashion, included. I am very anti-bitcoin. I also believe that demurrage has little chance of being accepted when there will be people willing to pay in non-demurraging currencies. But that is also not the topic I was bringing up--I was questioning the motives of the developers when the foundation for the currency distribution has not a whit of a mention in the PR media. That smells bad to me.


I agree. I have even touched on this in my proposal.


I believe there is a third option you have not considered--perhaps the best of both worlds--and the proposal for it is in my signature. I won't mention it again here though as I know that sort of thing is annoying and I'm not here to promote Decrits.

Regardless of all else, Freicoin has not eliminated mining and will be either significantly easier to attack than bitcoin (is mining the source of voting in republicoin? even worse if so), or in the habit of wasting all sorts of resources like bitcoin in pursuit of a currency that will only lose its value.

I'm glad I got notification about the new posts, because I somehow missed this one. Yes, we could use your help or the help of anyone here in devising a protocol for Republicoin. One of my TODO tasks is to compile all the thoughts that we had about which are currently spread all over the forum. But in a nutshell:

If it were implemented in time, Republicoin budgeting could be used to distribute the remaining Foundation funds. However the long-term purpose is to more efficiently distribute the 4.9% perpetual demurrage-offsetting subsidy. A bicamerate proof-of-work/proof-of-stake congress would first come to agreement on the split between money going directly to miners and money distributed through budgeting. Then the proof-of-stake voters would come up with a budget, of which the proof-of-work voters (miners) would have veto power. If it passes, it then becomes the network rule: blocks are rejected unless that portion of the funds are spent within the coinbase according to the current budget.

As for how it would be implemented, the obvious solution is some sort of digital signature voting protocol on a meta-chain - that is to say merge-mined alt chain with the specific purpose of timestamping signed ballots. That's getting a bit ahead of ourselves though, as right now what needs to be done is the selection of a suitable distributed voting protocol, of which there are probably examples in the academic literature, and determining how proof-of-stake signatures will be constructed (unsolved problem, as far as I'm aware).

How does the PoW half of the voting help?

Checks and balances. There's concern that the proof-of-stake voting could be gerrymandered into "pay me all the demurrage. kthx!" The miners would be able to reject such a budget (at a cost).

So, there is a lot of 'Freicoin is dead' going around. How accurate is this?

Reports of Freicoins demise have been greatly exaggerated.

Just have a look at the links below and you tell me if it is DEAD?

1. http://coinchoose.com/  <--- Profitabilty for FRC?
2. https://bter.com/trade/frc_btc <--- Trade volume for FRC?
3. http://1.cr.rs/ <--- Hash Rate for FRC?
4. http://www.freicoin.org/general-f8.html  <--- Goods and services available to purchase for FRC?
5. http://www.freicoin.org/mining-pools-list-for-frc-t251.html <--- Pools with FRC?
6. http://www.freicoin.org/freicoin-foundation-f15.html <--- Developers and Users Discussion of the (as yet formed) Foundation for FRC?

------- LONG WINDED SPEECH IGNORE IF YOU LIKE ------------

There are certainly those who do not know very much about FRC and spread what really amounts to propaganda and ignorance because of lack of understanding or just brainwashing or group think particularly those of the right leaning neo-libertarians who for the most part live in the 1700's where everyone should be given their parcel of land and have unlimited rights to do what they damn well please and gov't should not exist. Unfortunately with 6 billion + humans the tragedy of the commons is more about the unlimited and unregulated power of corporations backed up by these neo-cons or neo-libertarians who undercut democracy and real progress. Having said that I welcome Anarchists or even these Neo-Cons to join FRC and work to have the foundation simply destroy the coin and have it recycled back to the miners. That is just as good as any other option that has been discussed about the foundations roll in the 80% dispensation.

I for one just can't sit back and listen to pure conjecture and typically misinformation of what amounts to people who really don't give a shit about this altcoin and are flexing their brains in a philosophical discussion that has already been debated and over the past 30 years. Trickle down doesn't work. 0 government doesn't work and neo-libertarianism as defined and co-opted by Ron Paul and his ilk definitely won't work given that corporations control the gov't and the purse strings of govt. To have a debate about a user defined democratic dispensation of funds can work if people get involved and be HONEST about the checks and balances. I for one appreciate that humanity can work collectively and support the bootstrapping of projects like this. My suggestion for the people with no real vision is to simply AVOID FRC and let those who see that the Demurrage alone is the selling point of this altcoin and that when adopted widely FRC will be a means of exchange not a means of storing value longer term. BTC can be for those speculators. In fact mine FRC and then convert it to BTC win win win for everyone. If you want to join in the honest debate then do so... if you are just here to rehash backwards and limited political theory of the right wing establishment in America then do it elsewhere.

I want to see a coin that can be lent to users at 0% interest that to me means more than anything in this debate. That 80% of the first 3 years will eventually be recycled back into the miners hand so to me better we actually find the best way as USERS to help everyone use this coin. If you don't want to get involved just don't,  but make sure you don't lie and misrepresent the efforts of hundreds of people simply because you want avoid a world with any human collectivism. The irrational fear of a central control and all the ills associated with it can be worked in a more PARECON arrangement or PARPOLITY something that results in REAL DIRECT DEMOCRACY at work, home and throughout society. I for one want that not some world where those with the means to buy computers and have cheap electricity can lord over the rest of the billions on our planet that do not have that access. Pure hypocrisy is what I see from those who argue for a purely technological answer to democracy and equality of bitcoin. What is frightening about those who are so vocal against FRC is that complete hypocrisy and detachment from reality with regards to democracy and equality. I chalk it up to indoctrination... but it could be ignorance or a lack of reading or better yet they are just too fucking lazy to get involved and support a community other than those who look the same talk the same or have the same last name. Really sad.

don't worry,  there are no signs of coin dying.

I do monitor every coin every day. if anything worrying starts to happen again, this is the thread I'll ask for proofs od good FRC condion. if I dont get them I'll propose moove to dying in the sticky. if there would be no objections with serious arguments, it will be considered dying by community. so there you have it - it's a long way do be considered dying.

ignore crazy promotional or crazy FUD threads posts. those are just trying to be a manipulation .

p.s.

If you are ever gonna do a mandatory client update, I strongly suggest adopting PPC's difficulty adjustment in it.
no alt is going to be stable without it. maybe LTC can do it, but small sha256 coin cant.

The PPC difficulty adjustment algorithm has some properties we don't like. We are currently working on our own difficulty adjustment algorithm that will have relatively fast impulse response.

What about introducing some kind of duo-coin for this purpose? Let's say we have a 'Senate' coin much like PPCoin, with one vital exception: All it gets in POS revenue (only freicoin proper) from the coin generation and regenerated demurrage can only be spent on a list of grantees voted over by the present holders of freicoin proper (or for a simpler solution: POW workers), possibly even with an option for negative voting to suppress scam charities.

With this I envisage Senate coin to have utility as a gift-coin, but not much more. A gift coin, especially suitable for gifting to youngsters with a lot of idealism, to be transferred to the gift recipients favorite charity for there to generate revenue in perpetuity. Thus network security will in the long run be centralized somewhat to be operated by charities. But I can´t see much downside to that - other than you might have to redesign the generated coins to be distributed not per block but rather as a subsidy for tx-fees (to give an incentive to small charities for investing in decent hardware and network connection). Gesellians (i am only a Gesell agnostic btw) might be inclined to give their senate coins to free land charities. There will certainly be a market for the Senate coin, but with a suitable long quarantine period after last transaction for POS generation to commence, the coin will naturally gravitate towards being held long term by an accepted charity.

Voting for the accepted list of charities by POW can be attacked by any large holder of hashing power (something like a voting 51% attack). But this would also be a motivation for anyone with a strong conviction of which charities should be accepted (or not, if negative voting is allowed) to be hashing away on their private PC (or more likely with political mining pools). Even if this protection is just partly successful charities that are not very highly regarded will be at an disadvantage. This because the charity trying to cling on to the list will incur extra expenses for hashing power wich after a while will make it more economical for the charity to rather sell their Senate coins on an exchange. We could even distill this all the way to have an exclusive political POW, not being allowed to keep any tx-fees or coin generation (which then over time will be recycled by demurrage); the miner will be hashing away only motivated by the privilege of voting rights. There could arise some POW hashing-war scenarios between belligerents over who should be white- or blacklisted, but this will never be of the magnitude of having all of the demurrage benefit to POW.

This is definitely something important.

Just because an alt coin has a lot of threads here going on and on about how great it is, doesn't mean it is great.

I must admit, I've been surprised at how long FRC has flown under the radar for an extremely different and innovative coin.

0 confirmation after 3 day.....what and how to do? i deleted everything but keep wallet, re-install all thing in new and still 0 confirmation  ???

If you have problems recovering your wallet, or any other technical question, I recommend the official freicoin forum: http://www.freicoin.org/technical-support-f16.html

If you make a clean install of freicion you should replace its generated wallet.dat with your backed up wallet.dat, so you are certain to restore the backed up wallet _after_  re-installing the freicoin client.

Does anyone knowledgable of Freicoin have formulas for:

1) The value of the current block reward
2) The current money supply (other variable block reward coins have a "moneysupply" field in the getinfo response)

https://bitcointalk.org/index.php?topic=133020.msg1420188#msg1420188

1)

mining

before 161280   -0.000986912724567928 * block number + 254.53671561
after 161280   95.36743164

foundation

before 161280      496.03174604

2)

if cryptocoinexplorer ever comes back up its listed on there, or you can use the formula above to calculate the money supply

Freicoin is now trading on Vircurex and it looks like there is an order that is really high!

I have to restrain myself heavily from saying:

this coin is the biggest piece of shit ever made

don't waste your time... fuck you occupy

If this is a ban-able offense please inform me and i will edit my post.

Not sure if it is bannable :), but specifics would be nice.  Why do you dislike it?

funny thing is, Freicoin isn't much compatible to the Occupy-crowd.

Silvio Gesell and his Freiwirtschaft theories are usually considered rather reactionary and bourgeois-y by the German left and are rather located as something from the political spectrum towards the right.

Freicoin can now be traded on Vircurex.com

If a freiconomy can remove interest on mortgages, then this surely will avail much of the financial sorrows of the common Occupyer. Political labeling of wether to call the theory left or right is not relevant when you narrow it down to that.

doesn't matter, leftish idealists and Marxists would call it "verkürzte Kapitalismuskritik", that would translate to something like (dangerously) reduced critique of capitalism.

So what? You'll never satisfy the extremists. Fair home loans, no inflation, zero bailouts. The Marxist philosopher-kings can't even pry my money out of my cold dead hands - all redistribution of wealth in Freicoin is 100% optional. Sure beats the hell out of the Occcu!

Lets see what future this coin has :)
I think it'll be a big coin one day!

build problems Linux (Ubuntu 12.04)
any hints?
TIA

Install mpfr.

Gesell is considered anti-marxist in that he rejects Marxist labor-theory of value, and argues that Marx has made massive error in ignoring the nature of money and interest.  Now history has in my opinion clearly disproved labor-theory of value and abrogating free markets reduce productivity too much, and capitalism has been shown to have some serious flaws which Gesells theory explains very well.

Marx didn't endorse the labor theory of value either. That's a common misinterpretation. Or misunderstanding. Simply googling or wiki-ing will do.  ;)

Though if you want true socialism or communism, i.e. public and democratic control of production, you'd measure effort in a way that might resemble this theory. It doesn't mean it's wrong historically, it's just a different economic concept that, according to the Marxian utopists, never really was tried in practice (maybe the Spanish Anarchism came close).

And he did criticize "interest" all the time. He called it "Mehrwert" (surplus value). (He didn't differentiate it, and he was right with that, because there should be no real difference between interest and dividends, today things are even more fucked up.) In fact that's what Marxism is all about.

(I don't endorse Marx, but it's not helpful to build upon false criticism).

btw and more on-topic again, Gesell's Freiland is socialism, and my point of view is still that this is the big elephant in the room of his theories. If demurrage causes savers to flee into hard assets, they'll create bubbles. The same landgrabbing would happen that happens today with inflation. Gesell acknowledged that and called for "Freiland" (public/socialized land). But obviously, this will not be enough, you'd have to socialize everything then, the whole stock market, and finally the whole production. That's why Freiwirtschaft is not "ein dritter Weg", a third way (besides capitalism and communism), but rather an unstable compromise, imho.

Freiland was not socialized land, rather that was merely one avenue to implementation. The American Georgism is is a libertarian realization of Freiland, or at least Freiland-compatible.

EDIT: This was true of Gesell's work in general. He was a man of his times and as such an avowed statist. He though demurrage currency necessarily required a state monopoly on money. He also thought that his land-tax mechanism would have to be implemented through state ownership. Our opinion is that state monopoly is only one implementation pathway. In the case of Freigeld, p2p currency provides another more libertarian option. I personally remain optimistic that Freiland could be implemented with some sort of p2p auction to discover undeveloped value.

Marxisms 'surplus value' is not interest by any stretch.  The closest approximation we would have is 'net productivity' as Marx says it is the net value a worker creates above what is needed to support the worker.  Marx then believes the capitalist steals this by oppressive manipulation of the workplace, thuggery and other unsophisticated technicians not in any way related to the nature of money.

Gesell sees through this fog and identifies hard money as the source of interest with interest defined in terms of being able to RENT, and interest then causes the manifest ill effects like unemployment, the waste of capitol in the business cycle etc etc.

As for 'real' socialism, I see no reason it would actually need to utilize any such labor theory.  Socialism has always been understood to mean 'control of the workplace and means of production by the workers', now how the workers exercise that control is wide open and in no way need it conform to some blatantly erroneous theory.

Has there been discussion about changing the retarget algo?  with the increase in hashrate, will frc get strangled with a high diff and little hashrate again?

Thanks, this works great.

The total supply can be calculated with:

before 161280: -0.000986912724567928 * blocks * (blocks + 1) / 2 + blocks * (254.53671561 + 496.03174604)

EDIT: This doesn't factor in the demurrage.

Well, that doesn't account for demurrage, which occurs every block from the beginning.
After 161280 the total supply converges at 100 MM, but with lost wallets you cannot be sure that is 100 MM at any given time, even though you know all lost wallets will be recycled.
Before 161280 the total supply is more complicated, it's this chart: http://freico.in/static/images/how/coins_in_distribution.png
But sorry I don't have the formula.

Am I looking at that chart right? 10^16 is a heck of lot more than 100 million coins.

The graph is in units referred to as "satoshis" because this is what Bitcoin uses internally. If you divide 10^16 by 10^8, you get 10^8 coins, or 100,000,000.

That's probably a good enough approximation for blocks before 161280, but after 161280 the money supply is a constant 10^8 as jtimon said.

The below post sums up my feelings pretty well :)

If they were NASA engineers they would have had enough money to make this into something. Digital monetarism is no good :D

Sorry if I sound/sounded angry!

I'd make a NovaCoin-like (PoS/Scrypt) fork of Freicoin (+demurrage) if I knew C++.
Any news about Republicoin?

I argued elsewhere that in a sane and honest economy, interest would always be backed by the dividends of a company, they'd essentially be the same. It's only that there are lots of arbitrators in-between today that create the same fog you mentioned, most importantly the state.

Marx's surplus value is the profit of a company which the workers are deprived of, and which they have no control of. The profit of a company is expressed in dividends. No matter if the company borrowed capital or built upon their own savings, the dividends will flow back into the economy in one way or another (mostly to their bank, either to satisfy the interest on the loan, or as savings that the bank in-turn would loan to someone else). That's why interest rates are one the most important statistic parameters in an honest market economy. There can be no other source of interest in an honest economy! Something cannot come out of nothing!


I agree hard money is the source of interest. There's no reason there couldn't also be 'soft' money (trust-based promises/credit created on the spot by the people) in parallel, as it happens with LETSs. Freigeld might be somewhere in-between, it may serve certain purposes, but I only see it on a local level.

In a hard money economy, business cycles would happen when nominal prices don't react and drop fast enough, as well as nominal (not real!) wages. Often that's because there's a lot of bureaucracy in the way still rooted in the industrial age.


If there is no competition (there's a call for world-wide solidarity in communism, hence "Die Internationale"), labor theory would apply. In fact the usual argument is that the difference between the labor and the market value is what is stolen from the worker and measures the exploitation. (I do not agree because I'm not a communist. And of course worker co-operatives may also be free to compete and democratically decide what to do with the profits, so there'd be markets. Maybe Techno-Marxists like the Zeitgeist people would see this kind of competition as inefficient. But they're just pipe-dreaming imho.)

The current development timeline is:

1. New difficulty adjustment algorithm.
2. Freicoin Assets
3. Republicoin

Since it's pretty much just me doing development, these are progressing serially. So no, not much work has gone into Republicoin yet. I welcome contributions (ideas or code) from anyone else though.

Really? What a Moron.

Ummm still not seeing this happen... were you wrong?

Or you can just simply refuse to mine it and avoid city hall, the whole debate and leave others to do the heavy lifting right?

Look, this coin languishes because of the same reasons the "Occupy" movement died. Don't mis-understand me, I believe in Gesell's work and agree with the philosophy behind Freigeld but three or four serious people in a group of thousands of derelicts will never produce lasting or meaningful results.

Let me ask, what did Occupy accomplish? Before you tell me that it showed the world "we're not going to take it anymore," ask yourself, "take what?" The Occupy movement was headline news when it began, full of radical thinkers and youth seemingly bent on changing the world for the better, oh if only everyone loved everyone and respected human nature! If only the evil-corporate monopolies would see that the people REALLY want to live in abject squalor and stop raping the planet to produce consumer goods right? Funny, there were not a lot of Occupy movements in India, Africa, or South America--was that because of localized governmental control or because the people there couldn't expend time/effort to pitch a tent and bitch about getting more things for free?

This coin and its "foundation" are similar. Stage a digital version of the movement, fire people up with thinly-veiled political double-speak socialism under the guise that, 'ITS TIME TO DO SOMETHING!" Alas, who's listening? I feel that most people have realized that Occupy is/was not a world-changing movement. Throngs of unwashed, uninformed, and ignorant campers with drum circles and protest signs can't change the world anymore--its too big and complex now. Interesting to think that all of the iPhones/HandiCams, Tents, Water bottles, bullhorns, cardstock for signs, and even sharpie markers are products of the society Occupy complains so vehemently against.

More interesting to think that this coin, with nearly 80% of its production being held by one person could be considered a coin for the masses--but then it came to me. Gesell thought one should earn according to his ability. FRC's "foundation" is doing just that. While opining about the need for social change, the foundation is quietly amassing huge wealth under the notion that "they" are best to decide how it's used and spent. Strange...that sounds just like the current rash of premine and scam-coins only its ongoing and since its "to further the movement," the sheeple don't bother to dig any deeper.

No, the notion is to avoid a huge waste of energy by issuing that money through mining.
The foundation doesn't wants to decide how to spend the money directly, that's why the community is proposing several alternatives to distribute the coins without wasting energy and without "central decisions" by the foundation. Ideas like curecoin (cure cancer instead of mindless hashing for issuance) or increasing voluntary donations in a crowdfunding platform.
The point of the proposals is to take responsibility out of the foundation and back to the community and individual decisions.
Please, post your own alternative to mining (http://www.freicoin.org/freicoin-foundation-f15.html) if you have any idea.

At the current state there won't be an alternative to mining, aight? But if mining continues as slow as it is, there will be more energy efficient miners to do that necessary job...

I've been thinking more about this problem:

1) I'm not certain that the amount of energy spent is directly proportional to mining revenue, because Freicoin is merge-mineable with Bitcoin. If Freicoin hash power is much less elastic (relative to Freicoin mining revenue) than it is with Bitcoin, then you're making Freicoin more vulnerable to swings in Bitcoin price (which are arguably caused by deflation). This is because the decision to mine or not mine SHA256 depends more on what the merge-mined Bitcoins are worth than the price of Freicoin.

2) I can't think of any way to poll "the community" fairly, in a way that includes everyone, and you certainly didn't think of a way to do so before adopting this centralization aspect in the first place. How do you know who is and isn't a sock puppet? Do you expect people to trust you, or to audit your entire distribution process? There's only one provably fair way to distribute this hoard - to destroy it.

Any time someone criticises this money grab, you put the burden on them to solve the problem you created.

First things are valued, then producers (looking at prices) calculate costs and decide to produce or not.
To merge mine or not to merge mine only affects security, but the economics are the same:

miner's profits + capital costs + energy costs = revenue

Of course this is not a universal law, one part tends to equal the other and miner's profits should tend to zero, but those things happen only in perfect markets not real ones...
In the same way, the 80% issuance doesn't make mining unprofitable (that's dynamically adjusted), it only hires less security.
Without merged mining you will cap the security you have, with merged mining, Freicoin could be as secure as Bitcoin more or less independently of its price.


The first mechanism will be transparent donations in Freicoin and Bitcoin to registered non-profits. The Foundation will issue some freicoins to match those donations in proportion to what they have received.
This can be transparent, clean and productive. More than mining in all these three aspects.
People will vote with their pockets. It's not "perfectly fair" (whatever that means) but it's fair enough for most of us.


No, I tell them to propose new issuance mechanisms and discuss the current proposals.
Seigniorage is a problem we haven't created (it's much older than us)
and Bitcoin hasn't solved by destroying real resources in a sterile
attempt to mimic gold. But this technology gives the opportunity to
use it for the commons and positive things instead of financing states and
wars like other times, or just produce more heat like Bitcoin.

I'm not sure what "perfectly" fair is either, but a provably fair system would be one in which all participants can prove that the 80% coins were handled according to strict rules without having to trust anyone. You're asking us to either trust you or independently verify that these recieving addresses belong to registered charities. That's a non-trivial cost that doesn't exist with "wasted" heat.

And this of course assumes that users are OK with a government having veto power over acceptable charities - those of us who would donate to Wikileaks or Defense Distributed might be disappointed. I think you'll find that every new rule you make is "fair enough" when you only ask people who have not yet left the project; it's an echo chamber.

The only thing that differentiates this system from pure 100% subsidy is you are requiring us to spend a minimum on state-approved charities instead of productive for-profit activity, and you are retaining the right to say when this hoard is released into the money supply (much like a central bank). Miners who value these charities will mine at a "loss" and then you have wasted heat again.

How hasn't Bitcoin solved seigniorage? Seigniorage is the difference between the value of money and the cost to produce and distribute it. Right now the value of each Bitcoin block is worth roughly 100% of the cost to produce and distribute it. The value of each Freicoin block is roughly 500% of the cost to produce and distribute it.

We have better things to do with our time than come up with a cryptographically secure distribution method that's only going to see use once. “Provably fair” was never a design requirement.

Everybody will be able to see the transactions in the public chain,
100% transparency in this reward. The only way we could cheat is by
lying on what address belongs to what organization.
We could say:

-See? we're giving the money to this address, which belongs to the
Electronic Frontier Foundation.

But if it didn't belonged to that organization, that organization
would have something to say.
If we cheat with this system it will be easy to catch us, that's the
whole point. If we cheat, it's never too late to go back to the
only-mining hardfork.


I don't see why wikileaks could not take funds in the same way. But,
yes, it's centralization, isn't perfect and that's why it's limited
to 3 years.


It is for profit activity but it's not productive. Nobody benefits
from having such high currency production costs.
Again, the central issuing is not perfect. We hope to gradually
substitute it with more p2p mechanisms like proof of stake. If 3
years of issuing experimentation cannot give as a fully p2p
alternative to mining, the full 5% demurrage will have to go to
miners.


No miners should always mine at a profit or stop their equipment.
Freicoin miners have mined at a profit most of the time, they
periodically mine at a higher profit that bitcoin miners.


Since scarce money needs no backing you could maximize seigniorage
and minimize money production costs.
The seigniorage value comes from the people that accept the newly
created currency in exchange for real products. But since that value
will never be explicitly redeemed back by anyone it can be put to
use. Since money is a social agreement, the challenge is to invest
that value back into society, preferably (at least to me) developing
the commons (free software/hardware, free culture...)
Bitcoin does the opposite: it tries to minimize seigniorage (in this
case is profits for the miners) by maximizing money production costs.
It distributes the value by destroying it.

-How do you distribute 4 candies between 5 kids?
-You throw all the candies to the river so they don't fight.

-How do you prevent fires in the forest?
-You kill the forest first.

That's not solving the problem to me.


That's the whole point. The ratio cost to produce/value of Freicoin is
20% that of Bitcoin's. Freicoins are produced more efficiently and
the gains derived from this increased efficiency is what must be
distributed by the foundation.

The most important thing is that the value comes from the demand and
not from miners. That demand is explicitly approving the issuance
mechanisms in both cases Bitcoin and Freicoin. There's also demand
for other issuance schemes like xrp, where the marginal cost of
production is zero and 100% of the supply starts in the hands of a
private company.

Believe it or not, there's people that prefer Freicoin's issuance
experiments over btc destruction and xrp privilege, and that's why it
has demand and a market price.

Peer-to-peer was, and unless you have equal rules for all participants it is not peer-to-peer. So yes, provably fair was never in the initial plans... it's just the only way to restore that plan.

Since we're not assuming trust, this requires that every participant goes online and researches every receiving address. Do you think this wasted effort is less than the effort wasted by mining? What about charities which close their websites someday after they've recieved funds, are new users expected to check those? Unless you're requiring trust, every user from now until the end of Freicoin will need to spend energy and time performing verification - it's like meatspace mining.

I don't think I was being clear here. If mined coins allow for matching funds, then any miner who would otherwise donate to charity has a greater incentive to earn them. So if I gain $1 of utility from donating 1 FRC to the EFF, I would rationally mine all the way to $2/FRC. So I pay $2 to mine 1 FRC @ $1/FRC, but get $2 worth of utility. At best, this means the same amount of energy spent.

I think the comparison to XRP is fair. I can understand your argument that seigniorage can potentially be efficient, but I'd like to see how efficiently these coins are actually distributed when the time comes. My guess is that more time and effort will be spent, and most charities will just convert to BTC and then to local fiat.

No offense, but I heard the exact same thing from RealSolid of SolidCoin. There is demand for every single alt coin here.

No aspect of the protocol is centralized. None. Zero. Zilch. This whole initial distribution thing happens outside of the freicoin/bitcoin protocol.

So the protocol doesn't require 80% of new coins go to a specific address under your control? I was under the impression (incredibly sorry if mistaken!) that miners who tried to opt out of the seigniorage would be rejected by other nodes.

If the 80% seigniorage is completely optional and can be configured client-side, my whole argument is invalid.  :o

What do you mean by centralization? Let's taboo the word.

A centralized network protocol requires a specific network resource to be online and available in order for the protocol to work. Examples include a trusted timestamping, checkpointing, or routing server. This is the technical meaning that is prescribed to the opposite word "decentralized" as it applies to bitcoin - bitcoin is designed without any centralized network resource, and so among other things can continue to operate even in the face of powerful but not omniscient censorship. The same is true of Freicoin: so long as your blocks include the foundation outputs for the first three years, you will reach consensus with the Freicoin network.

Calling the budgetary requirements “centralization” is a twist of meaning. I wonder what you mean by that phrase? That is to say, if you taboo'd the word, what would you call it instead?

Hold on, he's got a valid point, the "FRC Foundation/you" control the 80% of FRC created...via a single wallet or not is irrelevant. Perhaps not "centralization," but it is certainly a single point of control. What word would you rather we use?

Single point of control... over that limited supply of coins. 80% of the monetary base, yes, but still finite. (1) Once those coins are spent they're gone. (2) Their movement can be tracked by anybody. (3) If anything funny happened, he market would pull the rug out from under us so fast, there'd be no hope of recovery.

When we conceived the idea of the Foundation in its current form, we were just weeks away from release. Our options were (1) release as-is with 100% miner subsidy and the associated opportunity cost; (2) add a simple, hardcoded budgeting system and issue the coins through non-profits; or (3) spend a year or more developing a fair, decentralized voting system for determining what to do with the coins, which may or may not have worked in its first incarnation. We chose the middle path, but for reference the most championed proposal for decentralized, non-mining issuance is described here:

http://www.freicoin.org/demurrage-should-it-all-go-to-miners-t20-40.html#p354

Are the keys to 80% of the eventual monetary base physically in my possession? Yes. Are we asking users to trust us while we figure out how to start a not-for-profit Foundation and do the distribution legally? Yes.

That's a far cry from a centralized protocol like the fiat banking system, or even lesser claims of centralization like the checkpointing systems that existed in PPCoin or SolidCoin.

Would we prefer a secure, decentralized voting mechanism with incentives structured to provide fair and equitable issuance without undue early adopter bias or vote manipulation? Yes. And while we're at it, I'd also like a pony, a million bitcoin, and to know who shot JFK.

The average time to solve a block is 29.73 minutes, since the algorithm change, a value which is declining as Freicoin miners realize they should not overreact to fluctuations in the difficulty.

Since the changeover in May 3,748 blocks have been solved.

Is anything actually going on with this alt?  What has the "foundation" been up to?

I see the exchange rate is well below a penny now...

Yes, we're assuming some level of trust, but not very high.

If we're honest, the only way to be sure about it is researching
every non-profit address and the charities themselves, or trust
someone else's research.

But if we cheat, it only takes a researcher to locate the proof of
fraud in the chain and show it to everyone.


Future Freicoin users may have to trust that someone took the time to
audit the public accounting of an organization that no longer
influences freicoin supply in any way.


Oh, I get your point now.
You're saying "if only miners donate to the non-profits and 100% of
miners mine at a loss only to give 100% of their earnings to the
non-profits, both systems are equivalent."
If frc is valued at 1 usd, miners profits should tend to decline so
that "production costs" equal 1 usd. But if miners are not counting
the 1 frc they receiving but the 1.1 frc the non-profits will get,
they will be ok with incurring 1.1 usd donation losses.
I'm assuming 10% donation matching by the foundation.
But miners can't mine 800 M frc in 3 years, so someone else will have
to make donations too, even assuming all miners donate everything
they get. And the matching of those donations cannot be counted as
production costs by the miners.


I need to repeat that miner's profit are also seigniorage and bitcoin
also has it. But ANY seigniorage is more efficient than costs because
at least someone gets the value instead of it being completely
sacrificed by the community as a whole.


Well, that's very likely to happen, at least at the beginning, but
it's not the end of the world, someone will buy them and they're
already distributed. Of course, the ideal situation would be for them
to spend the FRC directly, but they converting to BTC and spending
them directly would help expand cryptocurrencies too, and it's not so
much to ask because there's already many things being sold for BTCs.

Maaku and I plan to operate a FRC/BTC exchange and offer automatic
conversion from it. So if you have FRC deposits, you can withdraw/pay
BTCs to any bitcoin address directly (and viceversa).

But for merchants that accept both, you will probably prefer to pay
FRC directly to save bitcoin's transaction fee, the trading fee and
the gap between bids and asks.


Ok, then just trust my word or ask to them yourself: although they're
still reluctant to use freicoin because of how different it is from
mutual credit, there's many people in the complementary currencies
movement that consider it a great improvement over bitcoin, and at
the same time changes a little bit their perception of bitcoin, which
they tend to criticize aggressively.
Finding out that the issuance doesn't require mining but you still
need it for security seems to make them accept the general concept
better.

Hello there,

Reddit ALTcointip bot has just announced its 2nd round of signups for a list of supported cryptocurrencies.

Please see the announcement (https://bitcointalk.org/index.php?topic=357624) for details. Thanks!

-- vindimy

Please, advertise it for free here:

http://foundation.freicoin.org/#/trade

Yes, this is the centralization point of the matched donations distribution. But any censored nonprofit can publicly denounce us.
No one has done it so far.


Yes, profits tend to zero when time tends to infinity in perfect competition (something purely theoretical), so seigniorage to miners should tend to zero with time as well.
The rest is burned in mining costs, basically providing more security than users are paying for.
This is completely anti-ecological and therefore not aligned with Freicoin's core values.
The very inventor of proof of work-based scarcity (https://bitcointalk.org/index.php?topic=15672.msg1873483#msg1873483) refers to this as a "environmental crime".   

I cannot stress this enough, avoiding this waste is the primary reason behind the Freicoin Foundation, supporting nonprofits is just a nice side effect, the "less worse" distribution in my opinion.


I thought you were for demurrage.
Maybe you can find someone here: https://bitcointalk.org/index.php?topic=134629.0
That didn't worked because the Freicoin community didn't think like him, but you could just start a completely new chain.

I won't oppose to a second demurrage cryptocurrency, but the freimarkets crowdfunding thread (or this thread) is just not the right place for starting it.

Freicoin foundation had lots of time to move but seemed idle with the 80% of initial coins. What a shame for such an interesting solution of demurrage. It is very tempting to put this into a new coin with no foundation as the fork you linked in was not a genuine attempt, more of a protest against the solution chosen. Demurrage is a great idea but unfortunately one that people do not want. If the world could be rebooted to use this perhaps it would work, but not in the world we live in.

Perhaps there is time now to retry demurrage, there needs to be a new tier of crypto using a different hashing algorithm. Currently solutions are scattered and there is no standard. Perhaps this is a good time for Maaku to work on the next hashing standard and put demurrage at the top of it :)

Here maaku has started an discussion about republicon. Who wants help to make decision making fully p2p feel free to join and help developing republicoin!
http://freicoin.freeforums.org/republicoin-design-discussion-t738.html

With simply voting through hashing power I see a big waste of energy, there must be something more democratic and energy friendly. Lets help to find such an algorithm!

I would encourage anyone that takes issue with the Freicoin Foundation to express your grievances and propose constructive solutions: how should the foundation spend those coins?

We've taken a hardline approach that the foundation will only spend coins in ways which are chosen in a decentralized way by the community (e.g. matching donations to any registered non-profit). If we are unable to distribute coins quickly enough by these mechanisms then they will simply demurrage away and are issued to miners over a longer period of time. We are okay with that, as a fallback plan if community agreement cannot be reached.

There are other decentralized, distributed, p2p mechanisms that we would like to use to handle issuance, such as the republicoin proposal: using proof-of-stake voting to determine how the coins should be spent on an ongoing basis. There are a small number technical issues that need to be worked out, and a lot of infrastructure built before republicoin could be rolled out. We can use some help on this.

That's not true, the distribution has already started:

http://foundation.freicoin.org/#/donations
http://freicoin.freeforums.org/matched-donations-program-update-t732.html


I don't think there's any problem with SHA256 that needs to be solved [1]
Scrypt miserably "failed"[2] at being anti-GPU and it seems we will have scrypt ASICs soon as well [3]
There's no algorithm (and will never be) for which you cannot build specialized hardware, and in fact (according to some developers like gmaxwell) it seems that memory-hard algorithms ASIC will have a greater advantage in terms of power consumption over GPUs than SHA256 ASICs have. They will also be harder to design and build so there will probably less producers competing (thus causing more centralization, precisely what alt proofs of works are supposedly try to fight).

More importantly, with SHA256 you can have merged mining and leverage the greatest super-computer in the world: the bitcoin network itself.

For all these reasons and probably more I'm missing, no, we have no interest in working on an alternative hashing algorithm.

[1] http://www.coindesk.com/bitcoin-developer-jeff-garzik-on-altcoins-asics-and-bitcoin-usability/

[2] https://bitcointalk.org/index.php?topic=63365.0
     https://bitcointalk.org/index.php?topic=69357.msg808501#msg808501
     https://bitcointalk.org/index.php?topic=143659.0

[3] http://www.coindesk.com/alpha-technology-pre-orders-litecoin-asic-miners/

Distribution should have started a year ago which is where my idle comment comes from. It is good to hear that it has now started using your chosen system but I hope it is not too little too late.

We would rather not distribute at all and let the coins disappear through demurrage, than do so in a rushed, unfair, centralized method. If we destroyed the private keys to the foundation funds, the coins would still enter circulation at around the same rate as bitcoin.

Freicoin was added to voting (https://comkort.com/vote#FRC) at Comkort exchange.

Good luck!

WTF?
I mean...Where's the FAQ?

Could some of you big asic players please join us in p2pool for freicon ..... we have not hit a block in more days than i can count

Hop in for a while please http://pool.freico.in:9638/static/

changing the algo would be crazy


don't let these people even get you thinking


you have a successful coin, one of the oldest alt coins , it runs sha 256 d and that's it.....


the people who want to change algo's are only looking to 'exchange' the coins they mine for bitcoin generally


mostly they have no true interest in the actual alt coin they are mining

I would be greatful if someone can recommend a decent active pool to mine Freicon ,

on p2pool i get about 13% rejects no matter how I adjust difficulty and that is only with 40 ghs

That is normal for p2pool, and does not affect your payout. You may also try http://freicoin.us/

https://i.imgur.com/0a49aDy.png

lol

so?

Who needs Freicoin when you have EZB: http://www.welt.de/print/die_welt/finanzen/article128066476/Deutsche-Sparer-muessen-Strafzinsen-der-EZB-fuerchten.html

(Gesell honorably mentioned too)

exactly when even the creator doesn't care if it goes down, I'd say it pretty much failed. I can't see it from the graph is it already at the point where everybody who bought freicoins ever is in the red? Anyway "I told you so" and if it  haven't been for the freicoin foundation mining tax scam it should have turned out differently, because well it can't be much worse.

I'm not sure how informed you are about Freicoin, but the underlying purpose and design requirements are to explicitly avoid speculative asset appreciation. I see a very flat and relatively stable graph, minus the deceptive spike around the time of bitcoin's runup. That's a good thing.

thank you and to the others who sent pm's with suggestions also....

Bullshit, the unit of account is supposed to represent a stable amount of wealth. It's the whole point of a demurrage scheme, otherwise there could just be constant inflation. What we are seeing here is depreciation of the net worth of the whole freicoin "economy".
Still think you are right? Show a simple time series graph on the transaction value.

No what we are seeing here is a classical example of excessive taxation (to the amount of being fraudulent) choking off any potential for growth.

@ElectricMucus
Whats the point? If you don't agree with Freicoin, then just create your own currency or use one that you agree with. There is no use in wasting time to spend on thinks that you don't agree with.

You must have a very simple personality.

Yes of course :) Why make life so complicated if it could be so easy ;) Simplicity wins!

That's the best what Bitcoin brought to the world, the ability to choose what currency to use.
At least now until Bitcoin has not taken over the hole world...

Now here is something new, you exposing yourself to the complications of arguing with me in order to convince me to stop arguing myself.

Is there timeline or whitepaper of this coin?

I'm not sure what you're asking for re: timeline. Freicoin was released in Dec 2012, and so it's been live for about 18 months now. You can download the latest official version from the website:

http://freico.in/

There isn't a whitepaper because the concept is quite simple. You can read about it in the OP or the official website. There is a whitepaper describing future additions that will hopefully be included within a year:

http://freico.in/docs/freimarkets.pdf

http://freicoinmafia.com/

http://freicoinpoker.com/


Something to do with your FRC... other than exchange it.

these both look pretty cool, impressive, i may try them out !!

The demurrage bothers me.  I was mining this coin as an alternate to BTC until I noticed the coins in my wallet decreasing by a very small amount.  At first I thought maybe the wallet was hacked and someone skimming a portion of my coins thinking it wouldn't be noticed.  To my disgust I found this article explaining it was not only a normal process but acceptable as well.  Seems like bad business to take a buck out of my wallet when I open it.  I don't think it's right and will not mine this coin any longer. 

I'll just quote it for humor value before its get deleted.

You should have spent it! Circulation you know! Consumption ftw! Who needs rain forests.

anyone else see slow or no payout from fed & fab pool ??

that is why we have a mess here in the Altcoin scene.
and also, only ever said to cover your tracks.. by making excuses !

the logic is swiss cheese !

WARNING = ANALOGY TIME

if you owned a home in your own nice affluent neighborhood and your next door neighbor decided to start handing $100 dollar bills out to bums.
then what ?
i would LOOOOOOVE to look you right in your hypocritical eye and laugh my ass off,
when you bitched and complained when your property value was chopped in half
because 1,000 bums had started living in your neighbors front yard..

one of many points (reason(s) "mind your own business" is bad) and examples i can make..
further more the ONLY reason people make excuses for bad behavior publicly is because your guilty of supporting it.
nobody is going to say shit like that and be innocent little angels.. come on LOL

http://freico.in

"This Domain Name Has Expired"

Well, that isn't a good sign.

Expired credit card on the auto-renew. Sadly, the junk registrar I used auto-switched to a spam parking host with a very high TTL. A few days out and the DNS caches still haven't cleared out...

ceuservers.net accepts FRC for their services as wellhavee you tried to contact them? they do not payout until 120 confirms. I know at times they have a large portion of the network and at other times have very low portions of the network. About the only pool that is consistent hashrate wise is mine


Also be aware that I have control of frei.co.in and am able to have a mirror of their site up at a moments notice.


there are people who have an interest in this coin still and it is kicking.




btw, there is a wiki http://wiki.freicoin.us it is run on one of CEUservers boxes and so far so good.




Finally, I wanted to mention that my pool is doing a promo. first 100 people to sign up for an account and mine for 24 hours get 100 FRC credited to their account. The stipulation being that you agree not to cash out the funds and must use them for trade or donate to orgs listed here https://foundation.freicoin.org/#/donations.


FreiCoin is an older established altcoin with innovative features that are not in other coins, while you may agree or disagree with demurrage, you must admit to the value in it's uniqueness. While many other coins seem to be in it for the short term, the lead devs here are in it for the long haul.

the fact that they have created something that is not just a clone should give people some interest in wanting to give it value. It brings something different to the table. While our libertarian views may not be happy with the demurrage fee, look at it this way:

THERE IS ALWAYS A PERPETUAL BLOCK REWARD! Unlike other coins (such as DOGE which have unlimited coins), this coin has a hardcap limit at 100 million....

Another way to think about it: using a little antminer thumbstick and mining for an hour or two a week will avoid demurrage and will even gain you some coins.


Is everyone going to like it? naw, but there are some really interesting things under the hood and the FreiCoin community is very inviting, open, educating, and encouraging. plus maaku and jtimon (the lead devs) can actually be reached and will talk to you without talking down to you.

Hmm I don't know if got it right, but so or so it made me reflect...
I also think, that "mind your own business" is "bad".

And yea I still think that Freicoin or something like Freicoin  has a big potential to boost a fair economy.
And yea maybe we have messed it really up.
The thing I wanted to say above is, that crypto currency gives us a big freedom to create a diversity how money could be in an global scale and that we should not wast our time in blaming others when we could use the same amount of time to create an better alternative.

But if the point is yea we messed it up, and yea we could have done it much better and yea lets reflect honestly and learn out of our failures, than I am all for it!

All the good,
Arcurus

 

note i just want to say that there is no issue at all with feddie's pool payouts, that was resolved and he showed me a dice game that uses Freicon looked good and I tested it out too !! 

Network difficulty was really up and dropped down a bit last night but is on the rise again. 

FRC hit bleutrade.com

Welcome home to Bleutrade
Come sell some coins at https://bleutrade.com/exchange/316 so we can create a market.
to help us get Freicoin on http://coinmarketcap.com/

Welcome to Brazil  ;D the friendliest crypto Exchange in the universe

awesome, how are you handling demurrage?

If you remove bitcoins from circulation the remaining ones will become more valuable.

Is there a need for a Freicoin android wallet?

Is this coin still got any life in it as seeing lots of alts slowing down these days and just more and more coins poping up everywhere.

Fully alive  ;D

Mobile wallet was released at the Freicoin Alliance website.

yes , i agree fully alive, in some ways more than ever, also anyone who has been around can easily tell the difference between something that has been around for a few weeks and has a hundred thousand posts to the thread and something around for a year or several years, no matter how many posts are on the thread. 

Sometimes excellent projects are just totally overlooked by what has morphed into the alt coin worlds own "press" which for the most part only writes "sponsered" stories. 

Those who are truly "in the know" , "know" what projects are viable for the future for any number of reasons ranging from design, technology, competency of the development team and most of all 'honesty'.

Congrats  fedde  on the mobile !!
 

This is the official thread of FRC??
What happend with 80% the foundation had? (i had read something like that in other threads)
Any proyect going on? FRC Team?
Thanks!!!

There are several places to look for both new and old projects.

Foundation Web : http://foundation.freicoin.org/#/ (http://foundation.freicoin.org/#/)

Freicoin Alliance : https://freicoinalliance.com (https://freicoinalliance.com)

Freicoin Forums : http://freicoin.freeforums.org/ (http://freicoin.freeforums.org/)

I've been checking those links and still missing some info
This is the official thread of FRC?? (If the answer is yes, sorry but the OP doesnt look like that)
Richlist?
What is the Foundation Fund address? (so I can check the money is still there. Sorry but I feel you can dump all your coins too easily if cannot even check it)
Thanks for your help @fedde

http://freico.in/static/images/how/coins_in_distribution.png

Possible this can be used?

https://github.com/joeswhite/FoundationCoins

Found in thread http://freicoin.freeforums.org/post7827.html?hilit=FoundationCoins.php#p7827

Sun Nov 17 6:50:22 UTC 2013
Current Block: 44359
Total Coins on Block Chain: 32,258,509
Total Coins in Foundation Control: 22,003,968
Total Foundation Addresses With Funds: 89
Total Coins Yet to be Distributed to the Foundation: 57,996,032
Total Coins Left to Mine: 67,741,491
Total Coins in End User Circulation: 10,254,540


Guys your the fucking Rostchild of Cryptos and I am a bad investor for having this coin. Shit!!

Comparing  the family that has made more money from lending in history with a currency inspired one the works of possibly the economic author more critic with interest in history?
Anyway, I don't think you've been a bad investor, just a bad speculator. Investors invest in productive things like producing goods (aka real capital), companies, infrastructure...
I don't think buying abstract symbols of value (aka non-credit money ) should be considered "an investment".
 

Did he said something about the premine?



Truuuueeee


Some coins offers services like Videocalls (cheaper than Skype), others are trying to achieve mass adoption. Those are investments.
The ones that no ones cares about are for especulation

No my point is that money or any abstract token is not real capital (producing goods) and thus buying those is not an investment.
Sure you need to eat but buying food is not an investment because food is a consumer good. If you buy amazon gift cards, you wouldn't cal that an investment.
Also tokens redeemable for centralized services (like video calls) don't need to be a p2p currency. They could just as well be colored coins or any other tech for issuing assets.
They don't need to have a floating exchange rate either, the issuer could sell them at a fixed price (again, like gift cards).
So buying these so called "appcoins" is also speculation, nothing different there.

Anyway, we're getting offtopic...

I invest in projects with:
1) Product (some include in the wallets: VideoCalls, Stadistics, Exchange, whatever it helps for mass adoption)
2) Placement (where people can buy it = exchanges)
3)Promotion (people need to hear about it)
4) Team (Dedicated people working on the project)
5) Focused strategy (they all know what are their objectives)

If they dont have this, you can call it speculation.

The competition is how many people using your coin you can achieve

Can i have some addnodes please? Only 1 connection for me.

you must be kidding,


set your conf file to
listen=1
daemon=1

node had 30+ connections at all times !!