You simply start an IRS equivalent for enforcing the rates. 

Okay, so it's a bad idea. That's what forums are for though right? Criticizing ideas? That's why I posted at least.

Inflation in it's natural form (supply/demand) isn't taxation at all.

But probably the worst reason for what I proposed originally is that it doesn't account for deflation spirals. If people see that deflation is occurring in the front of a supermarket, they will hold from buying for hopes of a future price decrease, furthering deflation. A situation where you probably want to have some type of 3rd party to stem that from happening.

What about for Bitcoin?

An automated service that allows a goods/services provider to set a fixed price for their product, and the service automatically adjusts that price according to the daily price fluctations. I'm sure this has been proposed before, right?

Well I guess my point is that these days with computers, it really wouldn't be a massive amount of work. Just process the rate at the point of sale and maybe have a sign at storefronts that display that week's inflation/deflation rate.

I'm not pitching this, just floating the idea.

(this isn't about Bitcoin, but the general economy)

Why not just have inflation/deflation adjusted prices? Every week the rate is adjusted and tacked onto/off of the price of goods, services, wages, imports, and exports.

This just seems more dynamic and error-proof than controlling the money supply with the Fed buying/selling bonds.

I'm not really in a position to care to argue for this (dropped the project months ago), but for the sake of discussion:

1.) the internet already is decentralized ... decided to shut off every piece of equipment they had today it
would cause a problem for about a week

Hardly - We pay ISPs in order to use their infrastructure - and we abide by their rules or we don't get access (remember Net Neutrality?). I don't see how you think if ISPs shut down there would still be access. Without their centralized infrastructure, there is no network.

2.) each node would add like 20ms of latency to any connection

Where did you get this number? The overhead of hops in modern wireless mesh networks are routinely under 3ms. With distributed data (guaranteed small packets) 1-2ms overhead would be likely per jump, and with increasing capacity of wireless technology, that means less hops and more reliable wireless transmission.

3.) your proposal looks overly complex

It differs from B.A.T.M.A.N. and all those other systems in that it is distributed data - this is why it looks more complex, because it breaks data up and distributes it in parallel across the network - this increases security and speed at an exponential rate that scales with the number of users.

4.) ISP that state they are not allowed to resell the connection

This isn't about reselling connections - it would require licensing unused wireless bands (most likely wiMAX frequency areas) which is difficult, and one of the reasons I'm not pursuing the idea.

5.) "trusted nodes" on the network are going to need to be able to encrypt data at wire speeds

There wouldn't be any trusted nodes, or encryption - the data is split up (again, distributed data transfer) so that at any local computer relaying data, all they see is a piece of the original request. Maybe they get a password if they are monitoring their through, but without the username it's meaningless. This is why it's faster and more secure to use distributed data transfer, rather than a single, closest to destination route like every other mesh network project I've seen. The only way someone could intercept a request is through a massive, expensive physical infrastructure that spans miles and intercepts each and every piece of a request - hardly worth the time of a hacker looking to steal passwords or credit card numbers.

6.) That's no going to be possible. Unless you put it in a different universe someone is going to move data from one to the other, and then everyone is going to do it.

A "normal" server can't propagate or read the data of this type - servers have to transmit and receive data in parallel across multiple transceivers, piecing the resultant pieces together to form the request. And regardless, it isn't the data that is going to be so worthy of attention, it will be the network itself. This isn't just about being "anonymous" it's about faster speeds, and LEGAL freedom from regulation.

7.) The existence of a free network

For as long as we need energy to support the networks infrastructure, there will never be a truly free cost internet

Nothing like DarkNet - this idea is a completely new and independent infrastructure, and thus would be a completely new internet (no connection into the existing internet). Not just some anonymous proxy service for buying drugs and looking at illegal porn. The idea here is much more than just decentralization and freedom from regulation - it's about speed and remote processing. Like the parallel and concurrent processing in a multi-core processor or GPU - apply the same idea to a network. Like Torrents only an infrastructure designed for that type of processing.

Was reading a previous thread that had some replies about a decentralized internet. Well for anyone interested, I designed one about 6 months ago. I have documents and diagrams for anyone interested in piggybacking from it - I don't have the time to devote to a project this big, so I thought I'd just dump this text wall that introduces the idea. If there is actual interest in this, I might continue to work on it

Here's an image for any tl;dr people: http://oi54.tinypic.com/fjgizp.jpg

How does it relate to Bitcoin? Simple - automate Bitcoins to be the currency for paying/getting payed for being a node in the access mesh. It's an instant success story for Bitcoin if the network catches on.

Now here's the tl part for anyone that wants to read. This is just an introduction, as I have a few other documents and diagrams that go into more technical detail. PS - Chroud and ChroudNet were codenames for the project:

-----------------------------------------------------------------------------------

Intro
ChroudNet is an infrastructure, interface, and philosophical model that represents the creation of new internet and cellular media, in a liberated and consolidated network.  It utilizes the shared relay capacities of all connected devices to form an infrastructure of people, rather than service providers - sending data across connected devices in a distributed, parallel fashion. It is also fully designed and optimized for cloud computing and remote processing. Most importantly, ChroudNet is open for critique, scrutiny, and prototyping.

Infrastructure
It’s based on an ad-hoc, wireless mesh network that relays data in a distributed, parallel fashion. It replaces the current networking infrastructure with people’s devices – cellphones, laptops, desktops, tablets, televisions, game consoles, cars, the list goes on and will only continue to grow. Because of the increasing density of connected devices and the growing capacity for high-speed wireless data transfer over large distances (i.e. – WiMAX), a model such as this has great potential. It would also maintain its relevance with the progression of technology for many years to come - a "true" internet 2.0.

Wireless does have its own inherent difficulties like packet loss - but because of the design, if a packet misses its target at any node, the detection and response is local, so it's much faster.

Building The Network
Probably the largest obstacle to such an extremely ambitious project as this is building the network from scratch. The network would require new hardware and require early adopters. However, once prototypes have been built and standards are developed, the ad-hoc nature of the network means that networks can start locally: providing local services such as news, file transfer, and communication within a city or campus - and then connect with other networks as soon as they reached within distance of eachother. The design for resolving servers is this:

A dynamically cached and updated local interface provides visual access to servers that resolve within the system, based on physical location (GPS) used to direct the flow of parallel transfer, and server identification (such as a global unique identifier). A server would periodically broadcast their presence, informing connected nodes of it’s location and content. Then when a user requests information, the packets act like hound dogs sniffing out the server using GPS and identification information. This way, a device is capable of seeing exactly what services and content are available at any given moment. As local networks grow into each other, assuming they followed a standardized model, they would immediately merge into an incrementally large network.

Front-end (remote processing and client devices)
ChroudNet functionality would be entirely server-side (or cloud-side). Devices would simply act as transceivers with very little local computational capability. Cost and battery that would normally go into CPU and GPU hardware would be directed to networking hardware and battery instead. See services like OnLive. The front-end would be a fully consolidated interface that is visually consistent across all devices (based on open standards). It would present media for the equivalent of voice, television, and internet, in an operating system for all things connected. Such an operating system would offer two things: an interface to the network and its media, as well as a unified subscription model to ease both access and payment for commercial content. Content providers would adhere to a generic, standardized subscription model that can be further defined in software by billing providers. This way, users have their choice of billing methods – again to decentralize the model so that there is no monopoly on any sub-service of ChroudNet.

Media Structure
1.) “ChroudCom” – Voice and video communication service.
2.) “ChroudServe” – Streaming software for home and business. Each service can be free or commercial.
3.) “ChroudPlay” – Streaming gaming. Each game can be free or commercial.
4.) "ChroudChan" - Typical internet, but with much higher capabilities as websites would be processed and streamed server-side (no client-side security issues). Imagine 3D, interactive content that can run native code.

Benefits/Motivation
No service providers – ChroudNet removes service providers like Comcast and Verizon from the equation – including all related cost and regulation.

Consolidation of networks – One network for voice, video, and data. All at the high speed of distributed transfer.

Everything on all devices – Because devices are simply receiving and displaying streams, they will be able to handle all types of data without extra cost of data-specific hardware.

No regulation/policing – Neutral net and communications.

No wires – runs entirely on local perimeter, wireless access. Forget tearing up residential land, installing, and maintaining expensive wires.

Greener – Without a physical infrastructure, there are no repairs, centralized data centers, or service trucks.

Fast – distributed, parallel transfer breaks data into small pieces that are sent over the network effectively multiplying your connection speed by the number of local devices.

Secure – Users in the network only operate on tiny fragmented pieces that don’t equate to anything locally. It’s not until each fragment reaches your computer in collection that the data becomes meaningful at all.

Adaptable – Infrastructure upgrades are as simple as releasing upgraded devices. This means a network that grows just as fast as the technology that drives it. No year(s)-long waits for selected cities to be torn up and accommodated for physical cables.

Optimized for cloud-side computing – The bulk of cloud-side transfer is deploying data, such as streaming video and gaming, from the server. Servers can transmit data over hundreds of its own local tranceivers, travelling in parallel over hundreds of devices, only converging in the jumps before your device. At theoretical peak, 300 jumps over 300 devices, each with a 10 mile radius, could cross the entire United States in the time of a single, 10 mile wireless transfer.

Progressive – As wireless speeds and distances increase with technology, and more users join the network, speed and availability grow exponentially.

Scalable – The network not only automatically scales with its number of users – it actually becomes faster (due to passive:active device ratio)

That's just qualitatively false. At least diversify and buy one of each.

$30.00

hint: price manipulation

We are paying a monthly fee to a large corporation, in order to gain internet access, in order to generate and exchange Bitcoins.

How is this considered decentralized?

Service providers (Comcast, Verizon, At&T, etc.).

Are they not the new banks? They provide the means for ALL transaction and generation.

If they wanted, they could identify the BitCoin protocol signature (or BotCoin trading websites), and forbid it on their networks. Or even charge for it. They have complete rights over the network. And because of the overhead of their immense infrastructure, a new company can't just pop in and offer an alternative.

Yes tootdr, you are correct. Hoarding is the worst possible thing people can do for Bitcoin. It reduces the entry to the market, which may show a short term increase in value, follow by reduced interest and with it falling Bitcoin value.

That's not really how it works. Hoarding is the worst thing people can do for Bitcoin. If entry into the market is hard, people will lose interest and with it the Bitcoin's value will drop, causing a sell-off (a sell-off would be inevitable at that point, but to what degree is debatable).

Also, if interest is low because of hoarding, goods providers have no reason to accept Bitcoin. It needs mass distribution to become stable, and if Bitcoin isn't stable, there is no way Amazon and the likes will start accepting it. If the big providers don't accept it, then Bitcoin will never be a currency.

Is this sarcasm? I can't tell.

Bitcoin is not "real money". Bitcoin is a virtual commodity gone viral. If you aren't being sarcastic, then it is you that doesn't get it. People are buying this currency, waiting for the price to go up, and sell it to make a profit. I guarantee you this is why 90% of the people have gotten into this game. It has nothing to do with decentralization.

That's the point of this thread though.

It only makes sense to spend your BTC on goods and services if it isn't a losing investment. Right now no one really wants to use BTCs because the value is growing too fast. As soon as the value stops climbing, the altruistic crowd will buy goods and services, while the MAJORITY will sell to make their profit and leave the market.

This will be a good lesson in economics (and psychology) for all those who are heavily invested in this idea. People will make a profit, yes, but the currency will lose all appeal.

This is the sad truth of Bitcoin - people aren't buying it to buy Bitcoins, they are buying it to sell it. The ultimate truth is that the demand will flatten, and sell-off will follow.

That's the ultimate question. Why are people buying?

I think it's because it is profitable. But it won't always be profitable, and when it isn't, demand and price will fall, and people that got into the game for profit will sell. Sell-off? Probably. But maybe not.

This isn't the stock market. The Bitcoin market, and its investors, are extremely fragile. It won't take much to topple the house of cards.