That was not my intent. I did not mean for them to be interpreted as predictions of the future; I meant only to express my own opinion of one possible outcome. I have edited my posts to reflect this.

EDIT:

I agree those very well could have been interpreted that way, which is why I edited them (and will go back and review them again as I'm in a rush now). What I wrote and you quoted is my own belief and is not meant as a prediction of the future or investment advice in any way. I was under the impression that people were questioning why a demurrage currency could ever have value, and why if it's not supposed to be hoarded are core developers participating in speculation. I offered up my own viewpoint merely as an example, not as an advertisement.

I thought I had qualified my statements as such, but it seems the irrational exuberance of the last few days I haven't been as careful with my words as I should have.


Yes, but freicoins currently have (approximately) zero value. Any future where Freicoin has even the smallest usage would necessarily involve freicoins having nonzero value. Between here and there deflation is mathematically the only possible outcome.

Fiat currencies have dealt with this by using the state prerogative to set exchange rates and print money or absorb losses as necessary. We don't have that power, so unfortunately we simply need to accept that there will be a period of deflationary speculation prior to (possible) price stabilization, 0% interest, and all the rest. We're simply being pragmatic.

doublec, I'll make writing up an explanation of best practices for handling demurrage a top priority, but it'll probably have to wait until tomorrow. I might be able to extract out some code from my projects to share.

EDIT: but the short answer is: attach a "RefHeight" field to each balance, and each time a balance is used by the system, check if the balance is out of date and if so apply demurrage for the intervening blocks and update the balance. If you have a double-entry system you can even keep track of the loss due to demurrage in a special system account so the books balance.

Do you know what you just valued your time at?

I am. Anyone with coins to sell PM me an offer.

When the price of freicoin moves, it will could be by a lot more than the few percent you will lose by holding on to them for a few years. If the price moves up the number of coins in active circulation will also increase as speculators cash out their holdings. Eventually as economic growth levels out even the most bullish speculators convert their holdings into bitcoin, fiat, or real capital, the monetary velocity stabilizes, and the price of freicoin stops increasing.

It'll be a rough-and-tumble couple of years, no doubt. But I don't see any reason that it couldn't stabilize once the real Freicoin economy is built up (and the Foundation funds will play a large part in jumpstarting that).

Rome wasn't built in a day.

Yes, but only the foundation feels that drop directly. It's a smooth transition for the miners.


We have to be careful to distinguish between now, a scant few days after the currency has launched and no services are available, and years from now when the Freicoin economy is fully developed. In the long term, Freicoin may reach a steady-state value, and not move much up or down in buying power. But for now, any valuation is speculative, and for someone bullish on Freicoin this would be a good time (probably the best time) to pick up cheap coins.

In the long term cold storage of freicoins is a losing proposition, but for now it makes sense under some assumptions. Freicoin's value will be speculative until an economy develops around it.

Tax? I don't see that. Freicoin has a permanent subsidy, which goes 100% to the miners - only a hard fork can change that. The 80/20 split is with respect to the initial distribution. There are many ways a currency can be rolled out. When the Deutschmark was introduced in Germany every citizen was given a one-time equal allowance. Early-on we discussed similar distribution schemes for Freicoin (such sending one-time amounts to email addresses, phone numbers, etc.), but were unable to come up with anything free from exploits.

The Foundation-grant model is a compromise. The currency is given out to grants which promote economic development and goodwill (preferably by means of charitable causes), selected by an open competitive process. Once these coins enter the economy they are not taxed in any way, and the Foundation never sees those coins again. When the initial distribution runs out, the Foundation winds down its activities and disbands.


And yeah, my single Radeon 5850 did a little better than @galambo, but not by much. We had a very long beta process, and a coordinated release with announcements on our forums, IRC, the ripple mailing list, twitter, and a few other locations. Almost immediately we were all swamped with miners & the network hash rate has been increasing exponentially since launch. Already my mining payout is hardly worth it and I'll probably take it offline after the next difficulty adjustment. To my knowledge, none of the core contributors are professional miners, and mining is an increasingly professional game. Combined together we probably own little more than a shrinking few percent of a rapidly growing pie.

The 254.53671561 in the genesis block went to Satoshi, out of respect.


Here are updated versions of the total-coins-in-distribution graph:



and block-reward (miners receive the shaded regions in green and red):

Let me reiterate: 80% of the initial distribution. This shuts off on block 161280, and the perpetual reward (4.9% of the monetary base per year) goes to the miners only.

This is a different way of handling the initial distribution. Coins will enter the marketplace through mining, and through purchase of goods and services by a community-vetted process of grant proposals.

Freicoin complements Bitcoin in a way very different than Litecoin. Bitcoin is designed to be a better gold than gold itself, and so we can surmise that switching to bitcoin as a day-to-day currency would be similar to a reversion to the gold standard. The Austrian school of economics is the only framework I know of that actually considers gold as a currency to be good thing. Austrian economics may be popular on this forum and among crypto-libertarians in general, but it's actually not a mainstream position. In fact, most economists would consider it obsolete/discredited, but them be fighting words here

Now don't mistake the above as an apology for central-banker regulated Keynesian inflationary currency. Freicoin is a third option: a currency which is intrinsically perishable was shown first by Gesell and then later Bernard Lietaer and others to be fair for both consumers and merchants, recession-proof, and otherwise solve the problems inherent in both inflationary and deflationary currencies. Freicoin is the medium of exchange bitcoin will never be, but even if freicoin completely supplants bitcoin as the currency of the future (as I obviously think it will), bitcoin will remain a premier vehicle for wealth storage.

Freicoin and Bitcoin fulfill two completely different purposes, although Bitcoin has until now been marketed as serving the same purpose so confusion is inevitable.



Freicoin is not pre-mined in the sense that previous alt-chains have been. It does however set aside 80% of the initial distribution to hard-coded addresses that are currently kept in cold storage. These funds will also be distributed by means of Freicoin Foundation grants. In the next few weeks we'll have a website setup where people can submit and comment on proposals in the categories of economic development and/or charitable work. At regular intervals we'll pick and fund diverse set of proposals until the entire fund is used up. This is just a different way of handling the initial distribution.

@subSTRATA, there will be conflict-of-interest guidelines for dealing with core developers/foundation staff who submit grant proposals.

Which I do. @Impaler has been a positive contributor to the Freicoin community, and I am sure will do the same here.

IIRC the first release of bitcoin wasn't posted publicly until a week or so later. Satoshi probably wanted to run some tests to make sure everything was working correctly.

But Jan 3rd is the date in the genesis block, so that works for me

If any mods are reading this, I can vouch for Impaler. He's been an active, positive contributor to the Freicoin community.

There's also a p2pool instance up at http://pool.freico.in:9638

If you think there are security ramifications, email Gavin directly.

I'm the primary developer. @jtimon originated the idea and has been involved since the start. There's a few other people who have contributed code, and they're mentioned in the "About" dialog of the client.

Actually this one was eventually rejected. But to handle demurrage properly we made a switch to exact rational arithmetic internally, which would make it trivially simple to implement sub-satoshi support such as using decimal64 for amounts. It'd be a hard-fork, however.

You are conflating money-as-store-of-value and money-as-medium-of-exchange. Which is understandable as nearly every monetary system in existence makes the same mistake.

With Freicoin we are purposefully making a system that people will not want to use as a store-of-value. If you're sitting on a pile of freicoins wondering what to do with it, the answer is simple: invest it in something else. That something else could even be bitcoins, which complement Freicoin as an excellent store-of-value (but terrible medium-of-exchange if you're anything other than an Austrian-school economist).

@dreamwatcher: are you handling demurrage correctly? I can help you out.

Join us on #freicoin on IRC.

It's purpose is to lower basic interest rates to 0%, which has far reaching consequences. The best economic overview of Freicoin is available from our about page: Freicoin: a P2P digital currency delivering freedom from usury.

For a detailed analysis of the economics underlying Freicoin, go to the source: Silvio Gesell's Natural Economic Order.

Freicoin outputs lose value by a factor of 2**-20 with each found block, resulting in a loss of approximately 4.9% per annum (assuming constant hash power).

Freicoin has a maximum monetary base of approx. 10**16 satoshis (100MM), albeit with a perpetual reward equal to the number of coins lost to demurrage.

I wouldn't call the Indiegogo failed since it payed for the build and deployment infrastructure and kept us solvent We just had to scale back our scope a little bit.