I don't believe anything was sacrificed. Buying power is now dispersed. We donated it to the Bitcoin network and all who hold Bitcoin benefit. So if you didn't give 100% of your stash to Proof of Burn then you actually didn't lose any buying power. The coins don't exist anymore so you still have the same buying power. If you give the coins away then you just dilute your buying power because the coins still exist.


So the people who barely have a Bitcoin wont notice it? They won't use their new buying power to solve problems in their own life? Why should you give to charity? Charity is not sustainable, and if you don't believe Bitcoin is helping people then why are you using it?



It depends on how many BTC get burned. If enough BTC get burned that it negates the inflation caused by mining then that would have an extremely positive impact on the buying power of people who hold. It's not all that different than the effect from the block reward halving. If you are in Argentina right now you'd definitely care about the inflation rate of Bitcoin.

Financial experts? Economists? At this point the opinions of such experts are less than helpful. Those experts don't believe Bitcoin is real, and don't have any innovation or ideas to offer. There are different schools of thought as to how money should be and one school of thought is that it should be deflationary while another school of thought believes it should be based around inflation, credit, and debt.

At this point in time deflationary currencies make more sense. Buying power should increase over time. People should be encouraged to save. Bitcoin is actually not a good store of value precisely because of miners inflating the currency. It's just so much better than the fiat currencies that it seems like it's a good store of value.

A truly deflationary currency is the perfect store of value to put your life savings into because each year it becomes more scarce. Mining is a necessary evil to secure the Bitcoin network and that makes inflation a necessary evil to pay the miners. If we can have an inflation proof Bitcoin that would actually be better than what we have.

1500 coins isn't going to make much of a difference and wont put much of a dent in the inflation rate but let's not pretend like inflation is what we want. It's just a side effect from mining and no one actually wants inflation. If you do want inflation there is infinitecoin and the dollar.

I don't think it's a wise idea to donate more to the developers than you're prepared to lose should these anonymous developers pack their bags and leave. If you give them too much money they might have incentive to take the money and disappear.

A better idea is to start crowd funding bounties to extend Counterparty. It's open source and these aren't the only developers capable of developing it even if they are the lead developers.

The only result from burning that BTC is a slightly lower rate of inflation. It lessens the impact of mining inflation. So unless you think inflation is a good thing then burning coins is actually what deflation is all about. In deflation you destroy coins while in inflation you generate new ones. When you destroy the coins you decrease supply.

And please no guilt trips about African children. Bitcoin is divisible so no one is going to fall for that. If we burn a lot of Bitcoins it changes absolutely nothing when you can divide the remaining Bitcoins infinitely.

If 5000 Bitcoins get burned the value of those coins is dispersed to everyone. That is actually the most fair way to do it because the value does not leave Bitcoin. If we use the coins to buy some other coin the value leaves Bitcoin and goes into that other coin.

This is why Litecoin is going for $20, it's because people are spending Bitcoins to buy them. Imagine if people burned Bitcoins to get Litecoins? They would still get Litecoins but it would increase the buying power of Bitcoin while they transition.

You obviously don't understand Proof of Burn. The money isn't the same as the value. Value isn't the same as the money. When you destroy Bitcoin units the value itself is actually dispersed which increases the value for all who own Bitcoins.

This isn't like gold or dollars where physical destruction also destroys the value. This is digital. What that means is that value actually is increased the more scarce you make Bitcoin (deflation!).

If you think inflation creates value please check out infinitecoin. It will inflate forever so there will be plenty of coins for African children.

This is not entirely true. What happens if people start destroying XCP in the future for even better opportunities? The only thing you should concern yourself with is whether or not XCP can do what you need it to do as an entrepreneur. If you actually create DACs with it so that demand rises then you don't have to worry about this problem.

All of you who are concerned about the price should be looking for ways to increase demand for XCP.

That 5 million should go to pay developers. Development is way too centralized.

Bitcoin isn't deflationary, it's inflationary because new coins are always being generated by PoW. Please stop spreading that meme.

Deflation does not donate the money, it increases the buying power of all BTC holders including yourself. Because BTC is mined and is inflating, our buying power is constantly being reduced to benefit miners. The miners actually benefit the most from inflation while everyone holding Bitcoins benefits from deflation.

Supply and demand influence price so deflation will create higher prices if demand increases. It's safe to say that for Bitcoin demand is definitely going to continue to increase so everyone will benefit from PoB. It is true that people who have more Bitcoins will benefit too but it's not at the expense of people who have less. Even if you only have 1 Bitcoin you still would benefit as much as the person who has 1000.

XET ?

This depends on the parameters of the coin. Determine the rate of inflation, the total amount of coins, and the amount of demand. If the rate of inflation is low, the total amount of coins is high, and the demand is high, then it's probably a good investment.

But it all depends on the rate of inflation and since we don't know what that will be we cannot know how good or bad of an investment Ethereum will be at IPO.

Levelcoin is offering an interesting algorithm with interesting ideas. The main idea is that PoS voting can be used to modulate the rate of deflation for a coin which has a fixed supply.

If the supply is inflating then I'm a bit more skeptical it can work. If the supply is fixed such as if you lock the maximum supply in at the start (0% rate of inflation), then you can deflate your currencies as a way to increase demand and as destroy the coins as the block reward (if you destroy the coins as a block reward then the reward is dispersed to all coin holders like PoS).

These days we are discussing inflation like it's a good thing or like we actually need it. Inflation is a symptom of mining and only serves the purpose of distributing the coins. If you can distribute the coins, secure the network, and avoid inflation, why not?

I think it's a problem if Ether must be mined. Inflation will take place which will devalue the currency as it's being mined. Inflation should be 0%. In my opinion all the coins that should ever exist should be released at once and if that is not possible then go with Proof of Stake for a certain amount of months or years until Ethereum is popular and widely distributed.

The only problem with PoW is the fact it has to inflate and you have to mine it. The security is good but as you see with Bitshares it's better to avoid PoW. That leaves PoS and PoB and in my opinion the best option is a hybrid of the two.

The problem with setting a hard cap but not releasing it all at once is, you have the same problem as with the federal reserve. Inflation decreases the value so there is no real benefit in going into Ethereum early if you know it's going to have a high rate of inflation and inflate into the trillions of coins.

That is just my opinion. There are advantages to larger numbers for marketing but in my opinion those advantages only make sense if the rate of inflation is very low. Peercoin has a low rate of inflation but has no cap. And with PoB the cap does not even matter anymore because you can destroy the coins to accelerate deflation. If we want to reward the early investors then we want a high rate of deflation and high demand. The total cap is irrelevant.

It's not about seeking approval. They aren't inviting Gavin to discuss politics. Bitcoin is beyond one political ideology. You're an anarchist, most of us here are sympathizers with anarchist or libertarian views, but it does not mean the mainstream Bitcoin user will be and we have to understand that once you invent something you have to step away from it politically. At this point Bitcoin is just a tool to be used for the benefit of mankind.

If the CFR wants to know more about it then someone has to explain it. Just like the Internet had to be explained and Twitter.

If it's set to expire then just pay the XCP fee before the date. Bitcoin doesn't function if no one mines so everyone pays miner fees. If you're running a business and you can't pay the registration fee or whatever fee then you're not really running a business anymore. It's really no different. If you stop paying for your website fees or anything else then it goes down. Businesses will always pay the XCP fee and if its a currency not run by a business then someone will pay the fee.

That and also credit or redeemable assets have to expire by design. If they don't expire then how do you offer credit coups? You can't.



A subscription function could allow for recurring payments. You would subscribe to a feed and it would pay the fee on a recurring basis. You would subscribe and it would automatically pay. Of course you would have to set the maximum fee you're willing to pay in total, but once that is set then it could be automatic. I really don't think it's a big deal.

nLockTime right? You can send your fee payments into the future. So you could pay for your future fees by subscribing in such a way so that you pay it into the future up to a maximum amount and time. If my understanding is right it would even be something which could be seen on the blockchain. The money would just be released at a fixed rate so that you could pay the fees for years in advance.

And also if it's registered on the blockchain for example, if you pay your fees into the future while fees are low, it might be possible to do it in a way where even if the fees are raised you've already paid 5 years in advance. But people who didn't pay into the future, if the fees raise their prices are not locked in.

Then we could encourage people to pay 5 years in advance to lock in those cheap fee rates. People who don't do that will just pay whatever the fee rates are, this would encourage people to pay years in advance and create stability.

And with this information we can now speculate and somewhat predict what kind of price ranges these fees might be. I honestly think the betting function could be one of the killer apps because people like to speculate and there will be tons of feeds. That alone will probably support XCP.

For assets it's harder. You are right we have to do due diligence to avoid scams. For assets such as credits which can be redeemed it's important to deal with reputable businesses. Someone like Maxmint for example has a good reputation as being trusted to do escrows. He has done escrows for me and many others and has a perfect reputation. Someone like Maxmint could issue a Maxmint credit token for his escrow services and I would buy some of those tokens with the knowledge that in the next 6 months I'll probably want to use his escrow services. If I change my mind then I can trade his token for the token of someone else who is trusted and offers a service.

It's still possible to get scammed even like this, but if the tokens are reasonably cheap it's not that much of a risk to buy a small portion.


I just endorsed your escrow service. It's fairly easy to burn XCP and I figured it out but I still give you some business because it's good for the ecosystem of us all.

Couldn't that happen in any prediction market? But if they lose then they get punished so they would have to be very well organized. I'm not saying I have the most detailed or well thought out solution because I didn't put in a lot of time thinking about this but I do believe this is the direction which will lead to the solution.

So now that I've put the idea out there some people who do have the time to think about this can solve this problem. The sooner we start speculating on the fee price structure the quicker the market will determine what the fees ought to be. I do know you can't have zero fees. Free just isn't going to work for any of us who own shares in XCP, Mastercoin or anything else.

I think speculation is the solution to that problem. Channel speculation so that the fee always rests in perfect equilibrium with the market. The speculation will find the equilibrium point.

You could use a sort of distributed betting mechanism to allow players to predict what they expect the fees to be (guess the price of the fee for x?). So if Alice predicts the fee should be over 20 XCP and Bob predicts it should be under 20 XCP they should both bet and put their XCP on the line. The fee should be high enough that neither of them will want to be wrong. One of them will have to be right. So you can actually use speculation to find the price.

Bitshares is going to use speculation to determine the price of bitUSD. The price of Bitshares is determined by speculation via Protoshares. To determine the price for issuing an asset we have to speculate. Speculation will produce a price discovery where the market will decide the maximum amount it's willing to pay to issue an asset. That maximum amount should be the current fee. This would mean the fee would have to be dynamically adjusted in such a way that it adapts to speculation somehow.

One way I can think of to do this is to somehow have a decentralized data feed which is based on the outcome from betting/speculation. That data feed becomes the XCP fee price chart or XCP fee price index. Once the market or the network has made it's decision (consensus) the fees should be set for that hour, or that day.

I don't have it completely figured out though. I may have figured out that speculation can do it in theory but I don't have a detailed practical explanation for how to do it. I just believe that is ultimately how the problem will be solved and the direction you should take.

Practical use case: credit token scheme

If we really want to see Counterparty blow up in usage and in utility, one of the best uses for it is to issue credit tokens. A credit token is basically a coupon which anyone can issue which represents a promise that they will redeem the credit coupon for their goods or services by a specific date.

The idea is everyone will start issuing these credit coupons and due to the expiration date there can be no hoarding. Everyone would be able to trade these credit coupons to get anything they could ever need.

In my opinion any kind of issuance should allow for an expiration date. If I issue a token then it must be redeemed by the expiration date or it is invalidated.

The main problem I see with Counterparty, Mastercoin or any of these is that we are all expected to buy XCP or Mastercoins but then there seems to be no fee structure in place. What can we spend our XCP for in the XCP ecosystem? If that isn't figured out then XCP really has no value until we know what the prices will be in the system.

Fees are fine. I want to know the fees so I can know how much XCP I will need to buy or burn. Not knowing the fees means we might not even need 1 XCP to do all of our transactions. In my opinion the fees should be high enough to make people keep buying XCP but low enough that anyone who really wants to do certain things can do what they want to do.

If it turns out that 1 XCP is all we will ever need then that is clearly too cheap. If 100 or 1000 XCP is all we will ever need it's still probably too cheap but that would depend on the total amount of XCP. So before we can say whether or not a fee is expensive or not we have to know how many XCP will ever exist. With Mastercoin we know how much Mastercoin will ever exist and still don't know the fee structure.

If we talk about demand then I think credit tokens will be in major demand. If fees are too high or too low the market can decide if we put in the ability for people to vote or speculate on the price of fees. So you could actually build a speculation or prediction market to discover the prices of the fees in a similar way to how Forex discovers the prices of different currencies.

So how much should issuing a credit token cost? Use Proof of Stake voting to allow the network to collectively determine or use the market to allow the network to speculate on the fee prices prior to there being any prices.

So to speculate we could set it up as a bet like:

"The fee for issuing credit tokens in XCP will be over 50 XCP?"
     Yes? No?

Or more generalized

"The fee for issuing an asset in Counterparty will be over 1 XCP?"
 Yes? No?


Everyone would then bet XCP that it will either be over 50 or under 50. Or they'd bet it would be over or under 1 XCP. One side has to be right. The winning side profits so no one would want to be on the losing side.
 
Price discovery is going to be critical and if developers don't know what the fees should be then why not build it in so the network/market can decide either by a client based vote or a decentralized betting market?

If we wanted to we could start betting on what we think it will be right now. Speculation is probably going to be one of the main uses of Counterparty along with betting. So should a decentralized bet even have a fee? My opinion is the fee should be set by whoever sets up the bet. So some bets can have fees bigger than others and let the free market determine if people are willing to part with XCP.

This is the best advice you can give someone to secure thier investment. If you're the type of person who can sink 10+ BTC into this project you should be willing to give a few BTC to allow development to speed up, otherwise you might not get the x100 gains you're hoping for.


If we use a fee then you have to do some really trivial up front fee and then have a renewal fee after the expiration date which is a bit larger than the up front fee. If there are no fees at all you will have spam and hoarding. If there is no expiration date at all you end up with the same problems. We will have to find a creative solution.

If the asset is valuable at all then they should have the means to pay the fee. Honestly though this is a difficult problem and I see no way around it. There must be a fee to assign value to any object. So if a name is of value then it must have a cost associated to reflect it's value. Anything in the system must have a way of assigning value to it so how exactly else would you do it if not by a fee?

Almost any activity is economic activity. You could get paid to sleep if people could study your dream activity. There isn't a such thing as uneconomic activity. There is just activity which isn't paid or accounted for. Micropayments will change all of this.

Communism?

We don't need someone else to give us a job. We certainly don't need governments to create artificial employment. We will create roles in society for ourselves which don't have to be given but which we instead become. You become a dad, you don't petition the government to make you a father. If you have time to be a better father then invest more time raising your kids, teach them, play with them, and if you don't have kids then find some game you like to play and profit from it.

There are so many things to do which can be made into economic activity but small minds want to make it seem like we have to obsequiously bow to some master let them decide how we spend our time? The idea you described is communism.

Actually your solution combines the worst of communism, authoritarianism, and capitalism. You want government to create a bunch of bullshit jobs to keep people from doing real work and solving real problems? How about you add professional TV watcher to that list, but only government approved channels.

What is a government guarantee of employment? Enlist everyone into the military and have WW3?