When your reserves are small then yes you might have problems. It is apparently largely because the rest of the world's reserves of U.S. dollars might be becoming very small very soon due to devaluation of U.S. dollars that the U.N. is worried about the entire earthling monetary system...

-MarkM-

Okay here is another idea.

Forget about all this "locking" talk, "locking" bitcoins into your system.

Instead, "simply" (note the scare-quotes, they imply possible cans of worms lurking therein) use your big mac reserves, or maybe more reasonably your reserves of things that withstand time somewhat easier / at lower costs of preservative measures, to try very hard to keep the value of your currency from falling "too low" or rising "too high" in your estimation of how low is too low and how high is too high.

In other words do much as various Freeciv Galactic Milieu nations are doing or plan to do: instead of having only one reserve currency like earthling nations do (the U.S. dollar is claimed in various writings to be 'the' reserve currency for much of earth) they plan to have reserves of any/all currencies they consider 'major' enough in their view to be worth worrying about the conversion rates of their currency to those other currencies.

So for example if you see hamburgers are becoming too expensive in terms of your currency, you would promptly use your hamburger reserves to buy up as much of your currency as possible using hamburgers. In other words you would increase hamburger-demand for your currency, hopefully causing it to become worth more hamburgers than it had been.

Similarly if you see hamburgers are becoming too cheap in terms of your currency, you would promptly use your your-currency reserves to buy up large numbers of hamburgers - increasing the your-currency-demand for hamburgers hoping thus to drive up the price of them in terms of your currency.

I actually nurture some possibly small possibly doomed-to-be-dashed hope, by using hamburgers rather than some possibly a little harder to duplicate, substitute, counterfeit, forge, grow on meadows, etc currency in the preceding verbiage, to lead you to imagine that hamburgers might not actually be the smartest alternative currency to bother trying to keep your exchange rates within a certain range with respect to...

(Instead, maybe imagine each of the other alternative currencies as possible candidates to plug into the idea instead of hamburgers, or even, though it might not be much if any better than plugging in hamburgers, fiat currencies might also be interesting to consider in such roles... Also maybe bullions of various kinds might be interesting candidates...)

-MarkM-

The fact that so many bitcoin enthusiasts don't seem inclined to buy into alternative blockchains is actually a selling point for new chains in some cases.

For example part of the "point" in using chips in poker, or using various game-currencies in various games, is precisely to de-couple the value of them from "real money" so that players can decide for themselves how much they will use each of the colours of chips / types of game-currency to represent for the purpose of any "real money" agreements they might choose to make with each other regarding whether and how the disposition of such things in some game or other is to alter their "real money" positions.

I hope some of the game nations in the Freeciv Galactic Milieu will decide to use for their own blockchain-based currency a blockchain set up in some way that will allow them to open it right up to public "thick clients" and "miners" right from the start. (Such as by having no per block minting of coins just one lump sum of the total coins they will be issuing right in the genesis block ready for them to start issuing them.)

Partly this is because they can thus let other people do the blockchain building for them, partly it is because it eliminates the "but it is not fully universal person to person" objection to the private-net ones such as CDN and UKB, but largely because then we could maybe see actual blockchain-wars happen if some nations think it might be economical to try to double-spend and such on other nations' blockchains.

Some people pay real money in the course of playing games, so who knows, maybe some might "pay" real hashing too to try to gain an economic advantage compared to an opponent...

...I had thought to simply "simulate" such hashing wars by comparing the computer technology level and number of datacentres of each nation but hey maybe actual hashing wars could be more interesting and also maybe more pertinent to other blockchains as actual cases of "weak/cheap" blockchains attacking each other and being attacked by outsiders and so on.

Also if a chain has no per block minted coin rewards right from the start we can see right from the start how nice transaction fees look as rewards.

-MarkM- (World of Warcraft gold actually *tried* to decouple from "real money" didn't it and still often fails to do so?)

Hmm that makes it sound as if miners will keep jumping to the lowest difficulty blockchain, helping bring it into line with the others.

Add speculation, which might at least prompt some miners to quickly scoop up at least a few of each really easy chain just because it is so darn easy and might some day turn out to appreciate a lot in value, and maybe new blockchains are not such a bad proposition afterall.

I am not even assuming all blockchains will mint coins for miners. Some might already have their coins in one central account or group of accounts from the start and only ever offer transaction fees to miners. Maybe they will find they need to offer high fees, depending on the value miners think the coins are worth to them.

Notice that "to them". If a few pop stars decided to auction off their autographs or used underwear or sperm or eggs or whatever their fans would go crazy for in some new blockchain currency, maybe TsunamiReliefCoin or whatever, then regardless of whether the fans think they can resell the coins or the [whatever] that is rare and maybe not even of any value at all to other than some weird market such as "fans of this that or the other person" some folk might choose to mine the new currency instead of straight out buying it.

(Heh, imagine "you cannot bid unless you actually have the number of coins you are bidding", a whole lot of coins could get bought just to compete for that one pair of so and so's used socks or whatever...)

-MarkM-

(Hmm, TsunamiReliefCoin eh? All 21,000,000 coins in genesis block with private key sent to red cross or somesuch, hmm, an idea?)

(Hmm, maybe the whoever, red cross etc, gives us the public address so we don't even know private key only they do?)

How about computing how long it took on average for a block to be generated and if that average climbs so does the minimum transaction fee?

That way if miners wanted to manipulate the (default) minimum fee higher they could all slow down their mining, resulting in the clients sending higher fees to try to bribe the miners to mine faster.

But if the miners mine fast, the (default) minimum fee relaxes.

The target being 10 minutes per block average time to make a block.

(If it ends up taking a full two weeks on average to make one block, maybe quite a high fee could be called for to replace all the mining gear some worldwide disaster presumably must have destroyed or something? )

-MarkM-

Does the price of a big mac fluctuate wildly relative to the price of a beer?

How many beers does a big mac cost?

Aren't they within about an order of base-ten magnitude, therefore pretty much a who-cares proposition as to whether to peg to beer or burgers?

Peer to peer at high speed would probably have to be done by means of digitally signed contracts.

The protection from double-spending is provided by the recipient simply not accepting the same contract twice. If you want to spend to that same recipient a second time you have to issue a new contract to that same recipient, and a contract to a different recipient is totally different and separate.

Maybe if someone issues a whole lot of contracts and fails to make good on them a class action suit could be brought against them on behalf of all the creditors they have failed to pay?

Maybe you could peg it to a quarter-pounder, call it a quarter-pound of flesh, and make a Merchant of Venice drama out of it whereby if you don't' make good on your contract you'd best avoid dark alleys where bounty hunters lurk waiting to collect a quarter pound of your flesh and take a percent of it for providing the collection service.

Of course an actual quarter-pounder would probably cost many of these contracts due to the overhead expense of actually collecting on them. Take a look at the "Ripple" project, in which each user basically gets to issue their own currency. (Debt based, in that it is done by assigning a credit limit to someone else without any proof that they have ever yet actually given you the [whatever] that you are crediting them with.

-MarkM-

http://galaxies.mygamesonline.org/ is coded in PHP.

I have not yet figured out how best to plug the use of bitcoins into its code though.

I might even just use something like mybitcoin to interface it to bitcoins instead of making it require access to a bitcoind instance; I haven't decided yet exactly what approach to take, partly because it turns out the thing is more akin to alpha software than to what i am used to in GNU beta software, despite the "beta" label it came with.

-MarkM-

Unless I actually want anonymity, paying for it might be an un-needed expense for me.

If my prospective customer(s) want anonymity and I do not, who should be paying its cost, them or me?

If a customer thinks a bitcoin is worth more than a MyRetailGoodsToken(TM) or whatever else I set my prices in, they are welcome to prove it by converting it.

I am just as happy to accept Martian Botcoins and can even get some warm fuzzies from knowing Martian Botcoins are not burning up vast amounts of fossil fuel in hashing arms-races. Ditto for BitNickels, Canadian Digital Notes, United Kingdom Britcoins and various other such digital currencies. Admittedly I have not set up to accept BeerTokens yet though.

So fundamentally is it worth my while to contribute toward bitcoin's vast usage of electricity, or even its vast funding of GPU manufacturers, instead of sticking to digital currencies that do not (yet) require such large expenditures of such things?

Until bitcoiners actually buy something from me using bitcoins, bitcoins are as valuable to me as any other currency no one has actually bought anything from me with. Currencies whose users have actually bought things from me seem so much more "my customers" than people who do not seem inclined to actually buy my products or services.

Since mining a whole new currency of your own is cheaper than mining bitcoins AND people who already bought your own new currency alreeady bouht something from you thus seem more like "your customers" than people using other currencies, maybe the fundamentals of coins you create yourself and provide to your customers so that you can peg your prices to them could look better than the fundamentals of bitcoins?

-MarkM-

Since you probably cannot force all products to have the same relative values forever (are buggy whips still the same fraction of a buggy in value? Is one horsepower still worth the same number of buggy-whips as always? And the same number of buggies? With each of these things still being worth the same amount of gold as it always was, and of silver too of course? Etc.) Open Transactions or Loom or something along those lines seems called for. Specifically, something that lets you buy buggies using buggytokens and buggywhips using buggywhip tokens so that a buggy always costs the same number of buggytokens and a buggywhip always costs the same number of buggywhiptokens regardless of what exchange rates might be between the various tokens...

...If not then gee it sounds like I will probably be looking to buy bitcoins from you using your new currency if you have it pegged to big macs and automobiles and other day to day things' prices and yet also sell bitcoins for always the same number of your tokens constantly...

-MarkM-

What circumstances force people to borrow bitcoins instead of, for example, borrowing enough fiat currency to buy such bitcoins as they desire or need?

Doesn't it make more sense to borrow something else and buy bitcoins than to borrow bitcoins and use them to buy something else?

(Unless you expect the "something else" to appreciate in value faster than bitcoins.)

-MarkM-

The part of the money flow as electrical flow model that always intrigued me is the step-up transformer...

-MarkM-

I haven't seen much news on the space-heater and water-heater front lately, but water heaters would be "free" too once "we all have one anyway"...

-MarkM-

Some graphical-game gamers might suggest that GPUs are similarly free since "they all have them anyway" too.

Do they last longer when not actually doing much number-crunching?

-MarkM-

It seems like a pretty good model for a reserve currency.

Keep your wealth in bitcoins until you reluctantly find you need some pocket change to make it through another day or even just another meal, then cash it out to inflationary fiat as close as possible to the time you plan to eat / spend.

Maybe it is not necessary for merchants to accept it directly at all, as if you constantly keep facing those horrible inflationary fiats each time you face the prospect of spending maybe you'll be reminded why you prefer to hold the good currency and spend the bad stuff.

When bad currency forces out good, does that make the good stuff worthless as currency, or just make it worth more as reserve/savings than as pocket-change / spending-money?

Hmmm is having merchants directly accept bitcoins for goods really as important as seems hitherto to have been thought?

(Is having them directly accept gold silver platinum and palladium bullion as important too?)

-MarkM-

I keep coming back to thinking about the transition time between when a Lord would say hey I want you to run my feasting-hall, and put up the materials and labour and so on to build the hall, had his huntsmen and gardeners and fishermen bring in foodstuffs for the feasts and so on...

...And a time when the Lord came up with the brilliant gambit of instead announcing to a large number of wannabe feasting-hall-managers "hey you know what, me and my rich buddies would love to be able to frequent a nice feasting-hall such as any of you fine people could surely manage if only someone would loan you the capital to build it and get it up and running. How about you each borrow enough capital, at interest of course, then me and my rich buddies will maybe actually frequent one of your halls and the rest can be sold into indentured servitude for failure to pay your debts? Heck come to think of it why frequent any one of you? If we can breed a constant stream of suckers er I mean brilliant chefs such as yourselves, we can pick and choose day to day whether to visit any of you and if so which one, and let you all go down the tubes as soon as we have our capital back plus some profit. heck the amusement of the whole setup is itself almost a profit it is such an entertaining notion..."

-MarkM-

Here again I think getting over the fixation/hangup of only ever having one blockchain could help.

Maybe it is possible that by the time the minting of new bitcoins has decreased a lot, bitcoins will also be worth a lot.

Maybe even they could be worth enough that, like $10,000 notes-aka-bills, those who actually use such large denominations instead of exchanging them for smaller denominations will be relatively willing to wait longer and longer times for validation, maybe ultimately to a point where one does not consider a transaction verified until at least one hardcoded-in-clients checkpoint has been reached, fossilising the blockchain past the point where the transaction occurred.

Maybe if we start each next "denomination" (aka blockchain) each four years, when the previous "denomination" (aka blockchain) halves its minting-rate, the inauguration of a whole new blockchain that does give its miners 50 coins per block could help divert some of the frustration some miners - especially newcomers to the industry - might feel at the halving of coins minted in the earlier blockchain.

Wherever the miners focus should be useful for transactions needing relatively rapid verification and wherever the miners drift away from people can either exchange out of into the blockchain the miners move to or simply rely more and more upon actual human observations and checks, possibly including fraud investigations, computer-network attack charges, conspiracy to mess up international currency transfer investigations and so on, to arrive at "final" verification of transactions, ultimately fossilised by hardcoded checkpoints...

Miners having huge hoards of older "denominations" (aka blockchains) might prefer to mine the older blockchain{|s} in order to "secure" their wealth, at least up until the next client-version ith the checkpoints hardcoded that secure their wealth, while those more prepared to exchange their wealth into a new blockchain, or lacking significant wealth in old blockchains, might more readily jump onto the new chain...

-MarkM-

abyssobenthonic, I agree with much, most, maybe even all of your post.

It seemed clear to me that bitcoin was aiming more toward being a savings/reserve currency than toward being one's day to day microtransactions currency. That was much of my motivation for coming up with BitNickels (NKL) for my trading IRC-bots to use for small transactions.

I like your point about the likely lower amount of processor power thrown at whatever the microtransaction blockchain of the day happens to be causing the amount of value any one person ought to leave in that currency to be relatively low{|er}. If true, it should hopefully be another thing helping BitNickels to act like pocket change, being converted {|back} into bitcoins as soon as enough have been accumulated to make the cost of doing so less than the perceived risk or inconvenience or whatever of leaving your funds in such "pocket change".

The reserve/savings currenc{y|ies} can gradually increase in fees even maybe as they come more and more to be used only for massive nation to nation transfer/balancing of national debts / trade deficits rather than by businesses and individuals.

As the supply of BitNickels becomes too small to support their continued use as pocket change, BitPennies can be introduced, and so on as each type of coin becomes too large for practical use as a microtransaction unit.

I think that once one gets over the hangup of insisting there be only one global blockchain used for currency throughout the universe all alone without others present, a lot of the perceived or imagined FUD-inducing 'problems" might kind of evapourate.

-MarkM-

I am not against the proposed suggestions, I am saying great idea how much is it worth to you.

However, I believe you are wrong in your above-quoted assumption set.

These so called central banks of which you speak are in essence an early-adopter-cabal that, for various reasons (possibly including reputation, national reputation, or even (not so sure of this one) patriotism; or maybe even some even-more-practical reasons and rationalisations; and likely also fraud law adjudicators eager to punish them for giving the nation or law or legal system a bad name) seem by and large to prefer to attempt to prop up their ponzi scheme than to "cut-and-run" aka "fly by night".

What is there to stop those who converted early cheap bitcoins into millions of dollars, yen, GBP etc from using a possibly even very large proportion of such holdings to "prop up" bitcoins much as various nations attempt to keep their national currency from dropping too low in price by buying it back using their reserves of other currencies?

If anyone has managed to convert early bitcoins into vast sums of fiat currencies they should be in an excellent position to buy back bitcoins any time the price of bitcoins seems poised for a precipitous fall.

It might actually be very useful for such purposes to deliberately launch a bunch of variants that they *do* treat as ponzi schemes, both to make money with which to prop up the "real" / "original" bitcoins and to "demonstrate" that "no competing blockchains can in fact compete because we the original are so cool and so first-mover-fiat-reserve-rich we can back ours with more fiat than competitors can back competing chains with".

-MarkM-

Quote: "Given no such thing can happen in the proposed system, it's much better than the current one as far as stable medium of exchanges (as averse to crazy speculations and price bubbles) are concerned."

Great, lets do it. What IRC network and channel do you want it to use, or do you propose leaving out the IRC method in this new better currency?

How much better, in dollars cents or bitcoins, is this new currency, exactly, to you personally, as in how many dollars cents or bitcoins are you willing to buy how many coins of it for? There are quite a few blockchains already up and running any one of which might be more amenable than this crowd to simply eliminating the ever-less-minted "feature" from their code, so how many you want to buy will help determine which will be eligible (as in having already minted sufficient coins to satisfy your initial demand for such coins) and how much you want to pay per coin can then serve to eliminate those that consider your offer too low to be worth bothering with...

...Or, looking at it another way, once I know the price per coin you are willing to pay, for how many of these better coins, I will have the info needed to select among the various blockchains already implementing your idea or amenable to implementing it those closest to fulfilling your order...

-MarkM-

Quote: "I challenge you to do the same for intellectual property."

Hmm, I seem to think along the lines of if you copylefted it or released it into the public domain then it is intellectual property, in that other inellectuals seem quite likely to credit you with having originated the idea.

Whereas if you try to turn it into some kind of "other people are not allowed to do things the sensible or correct or best or better or more effective or more convenient way because i already figured out what that way is" kind of crap that is not intellectual property it might even be anti-intellectual!

("I know your intellect tells you the sensible or even obvious way to do this is the best way humans have yet devised or discovered of doing it, but, so sorry, we are prepared to use violence to prevent you doing so...")

-MarkM-