Your suggestion of transaction-dependent debasement is similar to what I mentioned a couple of posts back, but as I said then, I fear it would only hurt adoption, as most folks aren't particularly keen on an indeterminate future. There is comfort in knowing exactly how large the money supply will be 5, 10, 20 years from now.

If BTC's success compared to DOGE is in fact due to it's deflationary nature, it's merely perceptual, as both coin's money supplies are presently increasing. Perhaps that's your point. If by "debasing early" you mean making your intentions transparent that the money supply will forever increase, are you suggesting it's better to "advertise" a finite supply with the intention of debasing in the future? The "give the people what they want now and change it later" approach makes sense, but can be quite challenging with decentralized systems

I agree with your statement that the infrastructure isn't ready, but it never will be if there isn't a demand for it. A cryptocurrency has to achieve tx volumes high enough to push the limits of current infrastructure before more scalable solutions will be put in place. I fear we will never get to that point with deflationary money... and even if we do, then what? Hard fork? I don't see it happening at that point. What will happen is a new inflationary alt will be introduced, and we will be right back where we started.

That's why I think it's important to have these features in a currency from the beginning. With a bitcoin style emission, it would be decades before the block reward would start to reverse anyway. We just have to figure out how to educate people and get them to adopt it.

I should clarify... what I meant to say is:

High volume trade is certainly possible with a long-term value storage vehicle, but very unlikely because the properties of such an entity actively discourage it. This is why bitcoin has such a small circulating supply relative to the total available coins... nobody wants to spend their bitcoins when they can just accumulate them and watch the price go up. This is why I don't think bitcoin will ever be a "spending currency" so to speak.

A great currency for trade is one that is both easy to get and easy to spend, and this quality is acheived by deteriorating its long-term value integrity. Bitcoins are neither easy to get nor easy to spend, as the PoW increasingly favors the privileged, and the coin's deflationary qualities force you to fight logic to spend it.

Gold certificates are actually a great example of deteriorating value to achieve volume. Goldsmiths learned very early that they could print many more certificates than they actually had gold to back up, because such few people ever bothered to redeem them. This kind of debasement was an early form of fractional reserve banking, and one of the first steps toward ultra-high volume trade.

Regarding anonymous value storage, I'm saying it's useless because all you really need is anonymous currency. You can use that currency to purchase bitcoins or anything you want with anonymity. "Unnecessary" is probably a much better choice of word.

Anonymous value storage is useless. You could use MRO to purchase bitcoins anonymously (or any other crypto-commodity), and nobody would know you own it. What the world needs is an anonymous medium of exchange.

It seems like what you want is more out of convenience, but you cannot have both. A long-term value store does not have the properties to allow high volume trade.

The idea of "smart" debasement is something that I've been thinking a lot about. Perhaps the block reward could increase or decrease depending on the transaction volume, with less movement requiring more debasement. However, could such a system be manipulated by miners to receive a larger block reward? Additionally, even if we perfected such an adaptive system, I'd guess it would be a tougher pill for the community to swallow than to simply say "3% fixed forever no matter what." If you're suggesting we somehow calculate the debasement on-the-fly to keep trade value steady, that would be an extremely tall order, and not necessary anyway. There are plenty of other vehicles where people can store value, a currency for spending shouldn't be one of them.

I'm not sure what the minimum effective dose would be, but debasement is also important for keeping the wealth distributed and the network decentralized. This is why I think closer to 5% (or maybe higher) might be appropriate. As long as the block reward is high enough for the miners to not rely on fees, then we can cap the tx fee to a small percentage of the block reward, and the payers won't have to enter a bidding war to get their transactions included.

I was totally joking with that last part.


I agree completely and withdraw my previous attitude. I thought transparency of the issue would be smart, especially considering interested parties have already been accused of "conspiring" behind the community's back. I also wanted knowledgable followers of the thread to be aware of the issue, especially if they have interest in MRO. I don't mind where the discussion takes place, as long as the people in this thread to know it's taking place.

Tacotime said he was going to propose a hard fork to address this very issue. I brought the matter to the Monero thread so our whole community could be aware of it and discuss possible solutions.

Besides, this entire thread is essentially the same questions repeated over and over again:
What's the difference between Monero and BitMonero?
Is there a pool yet?
How is Monero any better than BCN?
Are there any pools yet?
What do these weird messages mean in my miner daemon?
Pool status?

I'm sorry, I was under the impression we actually wanted to do things better than the other coins.  Perhaps it's being discussed here because we think Monero has the potential to solve these problems early and be a leader in providing long-term solutions. How silly of me for being so optimistic.

Uh... that's exactly why it is a problem.  If payers have to enter a bidding war to get their transactions included, they might as well go back to fiat.

I've been trying to raise awareness of this issue. The typical response seems to be, "when Bitcoin addresses the problem, so will we." To me this means it will never be addressed.  The obvious solution is to perpetually increase the money supply, always rewarding miners with new coins.

Tacotime mentioned a hard fork proposal to never let the block reward drop below 1 coin:


I assume this is merely delaying the problem, however. I proposed a fixed annual debasement (say 2%) with a tx fee cap of like 0.001% of the current block reward (or whatever sounds reasonable). That way we still get the spam protection without worrying about fee escalation down the road.

Any solution involving debasement, however, will be met with harsh criticism, because "inflation is bad" and stuff.

Unfortunately, I fear you're preaching to deaf ears.  I don't believe many of the folks here understand the importance of the features you're speaking of.  I've stated more than once upthread that mining should be so easy grandma can do it. Pool sizes need to be limited or pools made unnecessary altogether. Transaction fees need to disappear. A fixed money supply won't work long term. I've been saying it. Few listen.

Anonymint, a truly anonymous cpu-only-forever coin would be great, but such features are useless if the community can't even create a currency capable of sustaining itself, let alone remaining decentralized. "One foot before the other" I suppose is what I'm trying to say.

A bitcoin style emission means the circulating money supply will continue to decrease. As block reward decreases miners will become more and more dependent on tx fees. Eventually the transaction fees will be so expensive the transaction won't be worth conducting. You must have a steady debasement or even the smallest currency unit will eventually be too valuable. Ideally, there shouldn't be any tx fees at all.

Bitcoin is only maintaining its circulating supply because new coins are still being created. However, with mining becoming more and more privileged and block reward decreasing, the circulating wealth will dry up and a tx fees will spiral out of control.

Rias, I don't think there is any intentional deception on part of the dev team. Most of what you've pointed out was simply the result of hasty decision making. I know this because I was present for much of it. For example, when the coin was renamed, tacotime, smooth, eizh, david, myself and maybe 2 or 3 other people voted on it. You can say we were being "secretive", but at the time we pretty much were the only stakeholders and accounted for the vast majority of MRO's hashrate. Edit: It's also worth noting that a public naming discussion was attempted, but only resulted in a domain race.

I have little reason to defend MRO as I've stated plenty that I think it has long term flaws and some important decisions were hastily made that I personally witnessed on irc. However, I'm pretty certain there is no foul play involved and these folks took a lot of care to make the launch as fair as possible.

I'm much more interested in your thoughts on HoneyPenny's PoW, as it's claimed to be an improved and future-proofed version of the CryptoNote algo:

https://bitcointalk.org/index.php?topic=577267.0

Bad move. With this solution, the developer has no motivation to curb long-term transaction fee escalation. This would only work if there was a hard cap on tx fees (which can be done with a perpetual debasement, as I suggested above). Otherwise the masses lose.

I suggest an initial 1% per block reward for the first 6 months. As mining becomes more and more competitive, miners will be less able or willing to donate voluntarily, so you can't count on them to support development over the long term. I do believe, however, that 6 months is enough time for a coin to gain traction, at which case it can survive on direct developer donations via the website.

The long term fairness of this approach would be more appealing with some form of perpetual debasement built into the coin's emission curve. I'm sure people are sick and tired of me bringing this up, but it will solve several issues:

1) The developer's early stake in the block reward will not be a permanent percentage of the money supply
2) The market cannot be easily centralized or manipulated from the inside by the super rich, as wealth will constantly be redistributed to the miners.
3) Transaction fees will never have to increase to support mining costs.

A 5% total annual debasement will not necessarily cause inflation.  Inflation only occurs when the circulating money supply significantly increases relative to demand.  A 5% total increase would have a negligible effect on the circulating supply. In comparison, bitcoin is currently debasing at around 11%, and more than 80% of the total supply remains out of circulation.

What I'm proposing would not effect the emission curve until very late in the coin's distribution. When debasement eventually drops to 5%, simply maintain a 5% debasement going forward. This can be calculated as:

If BlockReward / CurrentSupply = 2E-7
All future block rewards will be CurrentSupply*2E-7, calculated after each block, of course.

So block reward will decrease as usual during initial distribution phase, then very, very gradually increase to maintain a 5% annual debasement. This (in theory) would keep the coin's value almost perfectly flat, while simultaneously solving the problems with escalating transaction fees and inner centralization.

Smooth makes solid points, but as I already argued upthread, nobody is willing to actually navigate the illegal/evil marketplaces on the deep web to check for BCN's presence.

If BCN is in fact used for black trade (snuff films, illegal pornography, etc.), how much of that do you think would actually surface to the clear web? I'm guessing none.

Bytecoin is the result of careful production and has too much utility to simply be a premine scam.  My personal opinion is that BCN is definitely used for something, but nobody will come out and say exactly what that is without taking great risk.

It's very different in the fact that with other cryptos, any coin that enters an address must also be spent from that same address. All definitions aside, BCN is still the most "private" coin currently available.  Are you just playing devil's advocate, or are you actually suggesting cryptonote to be no different than not reusing addresses?

Ring signatures are not new. I didnt claim they were. I'm saying cryptonote is an applied concept and BCN is the first working anonymous cryptocurrency. Even if BCN was released yesterday, they'd have already acheived more than any of the other "anonymous" cryptos have been able to.

Are you going to investigate these marketplaces to see which ones accept BCN for payment? I sure as hell won't.


Smooth, I can tell you're an intelligent individual capable of critical thinking, so try not to preposterize what I'm saying. Trade on the deep web is almost entirely illegal. Of course illegal and evil are not the same thing, but quite a bit of deep web trade is evil, by most people's definition.

Which sounds more logical to you?

1. Write an entirely new cryptocurrency from scratch, incorporating an unknown (at the time) but rather brilliant cryptographic technology to secure privacy, all for the purpose of pre-mining the coin for 2 years.

2. Knowing that your product will fill a much needed demand in a very questionable market and choosing to remain anonymous and not promote it until the network is very secure.

To me the latter sounds much more plausible, considering I can think of about a thousand easier ways to create a scam.


Keep in mind the earliest BTC exchanges weren't much different from the spreadsheet exchange exchange we use here on bitcointalk.  The idea that a coin needs to be traded around on cryptsy before it can be used as a currency is ridiculous.  A coin's minability is exactly what decentralizes it and protects it from outside regulation.

EDIT: Speaking of the spreadsheet, you've made numerous BCN sales to people (myself included). We assume that you mined your BCN, but nobody really knows how you're acquiring it. Additionally, nobody knows what I did with the BCN I bought from you. The mere fact that we are trading it for valuable currency means that it does have value, and other folks can easily be doing the same thing.

If bytecoin is a scam, then it's a damn elaborate (and frankly, elegant) one. More likely BCN is a very distributed network that "smells bad" not because of suspicious "premine" activity, but because of the nature of its usage. The developers know that an anonymous currency such as BCN must first succeed in the markets where it is necessary. That is why they are so secretive. They do not want to be linked to the abhorrently evil shit that BCN is used for on the deep web (and you know exactly what I'm taking about).