Thanks for the welcome.


I think that the bitcoin system has some awkward aspects, in a word. The idea of generating (and verifying) coins through lengthy but otherwise meaningless computation is not very inspiring and introduces an inefficiency that is a barrier to widespread adoption, if it is not absolutely necessary. Then there is the problem of sustainability as the computational requirements appear to grow indefinitely over time. Finally, a finite number of coins can be hoarded and/or lost over time.


I'm a big supporter of decentralization also. Therefore, a distributed peer network seems essential. However, I think it's reasonable centralize the creation of coins, perhaps on a temporary basis only. Once created, they then would then be managed by the network. As they exist, bitcoins have a single point of origin to some degree anyway. For example, one person decided the total number that could be created.

One suggestion I have is to generate coins as "rewards" for charitable donations. One or more suitable non-profit entities would be designated (perhaps by popular vote), and if an agreement can be made with the entities to reward donors with coins, then every coin would be created by a meaningful act of generosity. I know I would feel good using such coins knowing of their origin. People give money to non-profits/charities anyway, so they would find themselves with a supply of coins to use and many would find ways to use them.

A coin could be identified by a unique ID, and digitally signed by the non-profit as authentic and as belonging to a certain donor as identified by their public key. When the donor wanted to use the coin, he would digitally sign the coin over to a new owner with his private key. A chain of anonymous ownership would be created connecting the coin to a trusted source, which provides a public counter of the last coin ID issued. This chain would not be very difficult to verify, compared to bitcoins.

It would be the role of the network to dynamically store all existing coins, and to prevent counterfeiting (if possible with this approach -- that is the question). I think the computational overhead would be much less than with bitcoin.

It is an open question whether to limit the number of coins produced. I like the idea of switching to a completely decentralized network once coins are no longer generated, but then there would be the possibility of hording (aggravated by expected attrition of coins) and the coin records would grow indefinitely. So, I lean toward ongoing production of coins, perhaps with demurrage; perhaps competing series of coins generated by different designated charities. I expect that there will always be (and should be) competing currencies anyway. I like the idea of currency as a flow rather than as a scarce resource, and a system with steady production and retirement of coins fits the former concept best.

I've tried bitcoin twice, once over a year ago and again a few months ago. Both times I lost interest. I like the basic idea, but wonder if it can be improved. Is there a place on this site or somewhere else to discuss bitcoin alternatives?