I come up with a way to incorporate inflation into crypto. The chain is Bitflate. It does reward halving for the first 4 halvings. Then inflation starts. This way, early adopters are rewarded. The chain inflation is never more than 7%. There isn't a flood of new coins. I think it is a way to bootstrap an inflating crypto.

0: 50 (supply: 10 million)
1: 25 (supply: 15 million)
2: 12.5
3: 6.25 (end of halving)
4: 6.56 (start of inflation 7%)
5: 7.02
6: 7.51
7: 8.04
8: 8.60
9: 9.20
10: 9.85 (supply: 31 million)

Even though supply inflates. It is still limited by its inflation. Supply reaches 31 million coins in 10 years. Bitflate is still early and experimental.

Join Bitflate community: https://discord.gg/utnEyp8

I think Ethereum and crypto in general are stuck. Bitcoin has settled into digital gold. Ethereum has not found its use case. Its community still pitches lots of ideas. I wrote a post about Ethereum prospect. TLDR: ETH is not looking good, for now.

Original Post: https://bitflate.org/post/2019/11/16/ethereum-and-computer-language.html

Bitflate is a cryptocurrency with constant inflation of 7% per year.
This article reflects author’s opinion, not Bitflate community.

When I first got into crypto in 2017, the first project I looked at was Ethereum (ETH). It captured a lot of attention from the market. I’m a developer so I have the skills to dig around a ETH development framework, such as Truffle. I find the whole ecosystem confusing. The idea of smart contract and programmable blockchain sounds fancy. But like many things in software, fancy is a gloss for complex technology that doesn’t work. I followed ETH development. I didn’t find a good and simple use case that really gains adoption. I think CryptoKitties was probably the most notable project.

After ETH, I studied Bitcoin (BTC). I find it is more focused. BTC only wants to be money, in particular, digital gold. BTC clearly captured this market. ETH is like a research project. ETH is general purpose and programmable. It lacks focus. Their leaders often change narrative and pitch endless new ideas.

It is easy to go down the rabbit hole and attack each other. Some readers challenge my view on ETH. I write this article to explain my view about its prospect in the market.

Three success factors in crypto: use case, use case, use case

I use this real estate adage (location, location, location) to emphasize the importance of use case. Cryptocurrency is a new space. The most important factor that determines long-term success for a crypto is use case. For example, Bitcoin (BTC) is digital gold. zcash and Monero are privacy coins. Dogecoin is meme, fun, tip coin. Bitflate is inflating coin.

ETH pitch is general purpose, programmable blockchain. It is supposed to conquer all markets. But since it is general purpose, it doesn’t do anything particularly well. In digital gold use case, it is trailing far behind Bitcoin. Its programmable capability opens gateway for scams. Post ICO craze, ETH community has moved on to the next pitch, decentralized finance, DeFi.

It is easy to look at ETH history and point out many flaws. But if we think of it as an experimental, research project, we can learn some things from it. I suspect BTC sidechain idea is an effort to compete with ETH. Not everything in ETH is bad. But how do we gauge its success? From my software background, comparing ETH to computer language will give us some glimpse about ETH prospect.

Ethereum as computer language

Ethereum is a programmable blockchain. It’s supposed to be programmable, like a computer language. I find they share similarities. Computer language is obviously programmable . One lesser known fact about computer language is almost all of them are general purpose. That means you can actually program anything with a particular language. For example, Java is a high level programming language. But it’s possible to program an operating using Java. This is an interesting feature but it is also very confusing. Occasionally, people will use programming language in very different use cases.

Programming language shines in specific use case

Each language is optimized and used for a very specific market. For example, when it comes to operating system, the dominant language is C. In enterprise software application, it is Java. PHP is a language that is used for web development. It doesn’t find much use outside of web development. In some cases, we find languages with multiple use cases. For example, Python started out as a scripting language, then it got adopted for web applications, and recently data science.

Drawing from computer language analogy, for ETH to succeed, it needs to find a specific use case. If ETH community keeps pitching general purpose blockchain, they diminish ETH long term prospect.

Polymorphic Ethereum

It is possible for Ethereum to be general purpose for a long time. It can be a fun research project for many years. Eventually, somebody will come up with a working scenario. This occasionally happens in computer language. Ruby is a lesser known programming language. It was invented in 1995. It did not find any success until around 2005. Interest in Ruby surged because a programmer, David Heinemeier Hansson (DHH), invented Rails, a new way to program web application. He decided to use Ruby as the underlying language.

Perhaps, around year 2025, an Ethereum DHH will appear and figure out a cool use case for Ethereum. Even then, it is good to remember that even with Ruby, its use case is limited to Rails. The applicable Ethereum use case will be very specific. It will not be what we see today in the market.

Disclosure: I’m long Bitcoin (BTC) and Biflate (BFL).

Hi everyone,

I'm Bitflate developer. I don't usually dive into other crypto. But some reader asks me for my view on Ethereum.

Original Post: https://bitflate.org/post/2019/11/16/ethereum-and-computer-language.html

Bitflate is a cryptocurrency with constant inflation of 7% per year.
This article reflects author’s opinion, not Bitflate community.

When I first got into crypto in 2017, the first project I looked at was Ethereum (ETH). It captured a lot of attention from the market. I’m a developer so I have the skills to dig around a ETH development framework, such as Truffle. I find the whole ecosystem confusing. The idea of smart contract and programmable blockchain sounds fancy. But like many things in software, fancy is a gloss for complex technology that doesn’t work. I followed ETH development. I didn’t find a good and simple use case that really gains adoption. I think CryptoKitties was probably the most notable project.

After ETH, I studied Bitcoin (BTC). I find it is more focused. BTC only wants to be money, in particular, digital gold. BTC clearly captured this market. ETH is like a research project. ETH is general purpose and programmable. It lacks focus. Their leaders often change narrative and pitch endless new ideas.

It is easy to go down the rabbit hole and attack each other. Some readers challenge my view on ETH. I write this article to explain my view about its prospect in the market.

Three success factors in crypto: use case, use case, use case

I use this real estate adage (location, location, location) to emphasize the importance of use case. Cryptocurrency is a new space. The most important factor that determines long-term success for a crypto is use case. For example, Bitcoin (BTC) is digital gold. zcash and Monero are privacy coins. Dogecoin is meme, fun, tip coin. Bitflate is inflating coin.

ETH pitch is general purpose, programmable blockchain. It is supposed to conquer all markets. But since it is general purpose, it doesn’t do anything particularly well. In digital gold use case, it is trailing far behind Bitcoin. Its programmable capability opens gateway for scams. Post ICO craze, ETH community has moved on to the next pitch, decentralized finance, DeFi.

It is easy to look at ETH history and point out many flaws. But if we think of it as an experimental, research project, we can learn some things from it. I suspect BTC sidechain idea is an effort to compete with ETH. Not everything in ETH is bad. But how do we gauge its success? From my software background, comparing ETH to computer language will give us some glimpse about ETH prospect.

Ethereum as computer language

Ethereum is a programmable blockchain. It’s supposed to be programmable, like a computer language. I find they share similarities. Computer language is obviously programmable . One lesser known fact about computer language is almost all of them are general purpose. That means you can actually program anything with a particular language. For example, Java is a high level programming language. But it’s possible to program an operating using Java. This is an interesting feature but it is also very confusing. Occasionally, people will use programming language in very different use cases.

Programming language shines in specific use case

Each language is optimized and used for a very specific market. For example, when it comes to operating system, the dominant language is C. In enterprise software application, it is Java. PHP is a language that is used for web development. It doesn’t find much use outside of web development. In some cases, we find languages with multiple use cases. For example, Python started out as a scripting language, then it got adopted for web applications, and recently data science.

Drawing from computer language analogy, for ETH to succeed, it needs to find a specific use case. If ETH community keeps pitching general purpose blockchain, they diminish ETH long term prospect.

Polymorphic Ethereum

It is possible for Ethereum to be general purpose for a long time. It can be a fun research project for many years. Eventually, somebody will come up with a working scenario. This occasionally happens in computer language. Ruby is a lesser known programming language. It was invented in 1995. It did not find any success until around 2005. Interest in Ruby surged because a programmer, David Heinemeier Hansson (DHH), invented Rails, a new way to program web application. He decided to use Ruby as the underlying language.

Perhaps, around year 2025, an Ethereum DHH will appear and figure out a cool use case for Ethereum. Even then, it is good to remember that even with Ruby, its use case is limited to Rails. The applicable Ethereum use case will be very specific. It will not be what we see today in the market.

Disclosure: I’m long Bitcoin (BTC) and Biflate (BFL).

There are a lot of tech stacks already for crypto. I don't think the problem is with the technology. I'm experimenting with monetary policy. I'm making a coin with inflation. I think Bitcoin model, Proof of Work, is good for making decentralized money. So I think building it out of Bitcoin model is a good choice. Another candidate for inflation fork would be Litecoin.

I designed the reward schedule to give early adopters more coins. But some users have asked me about wallet options. That is why I'm doing some research on this topic.

Decentralization exists. Our perception of it is wrong. Some say Bitcoin has centralized mining, not true decentralization. Instead of thinking about absolute decentralization, we should think of increasing money options. Having crypto options is a way to decentralize our money from existing financial system.

Even within Bitcoin, if you take all the forks of Bitcoin into account, the whole ecosystem is fairly decentralized. We have many coin variants, mining algorithms. That is decentralization.

Our lazy brain somehow fools us to think decentralization means search for truth. Decentralization is not about searching for the absolute, centralized truth, one true coin. It's about freedom to choose what we want to do. Decentralization is detachment from existing system. We give it up to find new alternatives. They could be better or worse than what we leave behind. The choice is always ours. Do Your Own Research.

This comment makes me laugh. At least, someone is a degree sillier than me in this forum. But then I realize I have some fiat money.

I think an inflating crypto is a good alternative to inflating fiat. It's true if your fiat money happens to be Venezuela bolivar.

Join Bitflate community: https://discord.gg/utnEyp8

There's a forex trading market where people speculate on currency value. If you take the existing USD base and inflate 7%, that is high. But with a new inflating crypto, we start from 0. Here's the reward schedule I design.

0: 50 (supply: 10 million)
1: 25 (supply: 15 million)
2: 12.5
3: 6.25 (end of halving)
4: 6.56 (start of inflation 7%)
5: 7.02
6: 7.51
7: 8.04
8: 8.60
9: 9.20
10: 9.85 (supply: 31 million)

Even at 7%, supply reaches 31 million coins in 10 years. And 100 million coins in almost 30 years. 7% is a few points higher than target inflation rate for USD. But it is lower than many other fiat currencies.

I think people don't use bitcoin for transaction because of its volatility. Near the end of 2019, bitcoin is widespread and accessible. Yet people have not used it outside of speculative investment. Bitcoin design and feature make it a Store of Value. I think we need an inflating crypto. Many crypto users understands the issue. But they don't see how to incorporate inflation into crypto.

Hi everyone,

Mining update: Bitflate just passed 60k blocks and 3 million coins in circulation.

Block: 60k
Supply: 3 million

60k block here:
https://explorer.bitflate.org/block/00000000000005b50a37e94459ce8be093b8459e4cf26e8aed3baecc02a4549e

Reminder: Bitflate reward will halve from 50 to 25 at 210k blocks (10 million coins). It is designed to give more coins to early adopters. Still plenty of time to get coins before we reach 10 million coins.

0: 50 (10 million)
1: 25 (15 million)
2: 12.5
3: 6.25 (end of halving)
4: 6.56 (start of inflation 7%)
5: 7.02
6: 7.51
7: 8.04
8: 8.60
9: 9.20
10: 9.85 (30 million)

Hi everyone,

Mining update: Bitflate just passed 60k blocks and 3 million coins in circulation.

Block: 60k
Supply: 3 million

60k block here:
https://explorer.bitflate.org/block/00000000000005b50a37e94459ce8be093b8459e4cf26e8aed3baecc02a4549e

Reminder: Bitflate reward will halve from 50 to 25 at 210k blocks (10 million coins). It is designed to give more coins to early adopters. Still plenty of time to get coins before we reach 10 million coins.

0: 50 (10 million)
1: 25 (15 million)
2: 12.5
3: 6.25 (end of halving)
4: 6.56 (start of inflation 7%)
5: 7.02
6: 7.51
7: 8.04
8: 8.60
9: 9.20
10: 9.85 (30 million)

I think there is speculation for inflationary asset. Inflating crypto may inflate slower than its demand. I design Bitflate. Although it has constant inflation of 7%, it is still limited by its inflation rate. The reward schedule is as follows:

0: 50 (supply: 10 million)
1: 25 (supply: 15 million)
2: 12.5
3: 6.25 (end of halving)
4: 6.56 (start of inflation 7%)
5: 7.02
6: 7.51
7: 8.04
8: 8.60
9: 9.20
10: 9.85 (supply: 31 million)

Reward does 4 halvings like Bitcoin before inflation starts. Supply reaches 31 million in 10 years. I wrote about economic incentives for inflating crypto here.

https://bitflate.org/post/2019/11/01/economic-incentives-for-inflating-cryptocurrency.html

I discussed with others about inflating crypto and fiat. I wrote down some thoughts.

Original Post: https://bitflate.org/post/2019/11/14/inflating-crypto-and-inflating-fiat.html

Bitflate is a cryptocurrency with constant inflation of 7% per year.

Bitcoin is the first cryptocurrency. It has limited supply of 21 million coins. Since its creation, Austrian economics is making a comeback. Bitcoin is pitched as digital gold and deflationary asset. The world of economic theories collide: Austrian versus Keynesian economics. The line of divide is clear. Crypto is Austrian. Fiat is Keynesian.

Is the world going to be clearly divided between digital and human? Are we going to swing between these two extremes? When I work on Bitflate, I often think about this problem. Most people dismiss the idea of inflating crypto. I am optimistic. I think inflating crypto can serve as medium of exchange.

Fiat requires coercion

When we discover crypto, we took the red pill and found new freedom. We quickly dismiss the existing monetary system as fake. We were somehow forced to use fiat by authorities. Therefore, inflation is an authority made phenomenon to subjugate us into using fiat. People tell me that an inflating crypto won’t work. It needs authority to force people to use it.

Then, we discover crypto is also fake. It requires us to come to consensus, to believe that it has value. Money, at its core, is a Ponzi scheme. Store of Value cryptocurrency like Bitcoin needs new investors to push its price up. Otherwise, halving supply is a slow death sentence. It happened in many altcoins. And it is happening in Litecoin.

Fiat with inflation over crypto with inflation

This is another type of feedback I got. Some people rather use a fiat issued by authority than a digital native and decentralized crypto with inflation. Maybe, we dislike inflation more than government. Bad economic policies sure can trigger hyperinflation. But inflation is a natural phenomenon. It happens in healthy economy. Low inflation triggers other problems.

I think a crypto with constant inflation is appealing. The most important aspect is predictability. We can find ways to avoid value loss. It is not an asset for long-term investment. But it has its own use cases.

Inflating crypto is for transaction

With deflationary crypto, we are rent-seeking and waiting for price to go up. Holders contribute nothing to price rise. We are discouraged from spending and investing in its ecosystem. The goal of inflating crypto is transaction, not Store of Value. It discourages HODL behavior. Because inflating crypto loses value over time, we are forced to put it to use. We will need to lend, spend, or invest the money.

Is the world either Austrian or Keynesian? Do we need to pick a side? I don’t think so. The world is full of contradictions. Cryptocurrency gives us monetary freedom. We are free to choose whatever money that fits our needs.

Read more about inflating crypto economic incentives: https://bitflate.org/post/2019/11/01/economic-incentives-for-inflating-cryptocurrency.html.

Money needs both inflation and deflation.

Economies always have deflationary and inflationary assets. People often overlook this. Gold, real estate, moat, competitive advantages are some examples of deflationary assets. Inflationary currencies serve as a medium of exchange. They are used for transactions. Bitcoin was created in response to the 2008 economic crisis. It exists and thrives because of quantitative easing, a type of inflating monetary policy.

Crypto just deletes the inflation side of money. That's why it is so dogmatic and doesn't make much sense.

I wrote some thoughts about deflation and inflation in the below post.

https://bitflate.org/post/2019/10/10/the-next-big-thing-in-crypto-using-inflation-to-create-stablecoin.html

Let me fix this problem with Bitflate, a crypto with 7% constant inflation.

I have an odd question. Seems like this is the place to ask. I'm making a Bitcoin fork. I'm looking to create a mobile wallet for it. What are the popular open source mobile wallets? I did some research and found Electrum, BreadWallet. Litecoin has LoafWallet which forked from BreadWallet. Are there any other options?

Just saw this on Pierre Rochard Twitter.

https://twitter.com/pierre_rochard/status/1194399931584450560

"Inflation causes more wealth inequality than luck or skill.

Bitcoin fixes this."

"Due to inflation the USD has become completely unusable as a savings technology, everyone has to immediately invest or consume."

I largely disagree with this. Currency is supposed to inflate. Store of Value deflates. This is why Bitcoin is not widely used for transaction. I hope the topic of inflation will come up more often. Crypto is too dogmatic about bag holding. We need to depart from this one-sided view of the world.

Point taken. I agree there is variance in decentralization. My diagram only illustrated a few in each category. We can argue endlessly about how decentralized a coin is. I came up with a test of decentralization: Can I fork this coin to make something I want? I may not have anyone supporting my fork. But it's entirely possible to do. Bitcoin passes this test nicely. There are numerous forks of Bitcoin at many levels: chain soft fork, hard fork, source code fork. If we include all of Bitcoin's forks into Bitcoin, it'll be the most decentralized. Bitcoin forks also inherit this characteristic.

On the other hand, can I fork fiat to make something I want?
Can I fork Tether to make something I want?
Can I fork XRP to make something I want?

It's not easy.

I think Libra is semi-decentralized. They already published Libra source code. There's an effort to fork Libra with OpenLibra.

People in crypto misunderstand tail emission. Grin outputs linear reward: 1 coin per second. This is a constant emission. As supply gets bigger, this emission eventually goes to 0. Over long-term, it'll behave like zero supply. I'm not sure how their developers decide on this emission. It seems like an effort to differentiate but they didn't really think through.

I came up with the below diagram to show different market segments of crypto. I think Ripple would sit near the Centralization side. I've tried to create a decentralized stablecoin (Bitflate). It has a constant inflation. Some feedback I got is people rather use fiat with inflation. Crypto is only for limited supply. I realize that it is possible we would end up in a world where there're fiat currencies and digital native SoV crypto. In such world, Ripple won't survive.



I'm optimistic that there will be other crypto categories. I'm currently working on inflating crypto.

I feel like I will need to explain this a thousand times. DOGE has tail emission. It is not the same as inflating supply. It's tail emission will become smaller over time relative to supply. Eventually, tail emission will be so small that it'll behave as no new supply. I categorize inflating cryptocurrencies as those with percentage inflation of supply.


When there is price pump, people call it scam. When price is very low, people still call it scam. I launched Bitflate. It has 7% supply inflation. Eventually, everyone's bag will be worth less. Currently, you can buy them for less than 10 sats. This coin is not making me rich.

Bitflate is an experiment to bring inflation to cryptocurrency. I think this new concept will benefit everyone in crypto. I hope people will spend time reading my posts on bitflate.org.

Hi everyone,

My new post on crypto future. Cut through the noise and move forward!

Original Post: https://bitflate.org/post/2019/11/10/emerging-markets-of-cryptocurrencies.html

Ten years after Bitcoin whitepaper release, cryptocurrencies have advanced. But its progress is slow. All cryptocurrencies, including Bitcoin, are just niche speculative assets. We have Bitcoin, Litecoin, Dogecoin, Ethereum, Ripple, Stellar, and many others. Why has a single crypto made into everyday transactions? We still can’t purchase coffee with cryptocurrency. The world of finance remains disconnected from crypto.

I believe the problem is the lack of experimentation with crypto monetary policy. Crypto builders have focused a lot of attention on the technology. Monetary policy changes are hacks to fix temporary issues. For example, Dogecoin and Grin have tail emission. This kind of supply increase is intended to keep miners around. It does little to change long-term supply and monetary policy. Eventually, tail emission will behave like zero new supply.

I have advocated for more experimentation with crypto monetary policy. Facebook recently introduced Libra. I think it is an interesting improvement. Forward to the future, I develop a framework to understand emerging markets of cryptocurrencies.



Between centralization and decentralization, we have a range of currencies. Each of them will behave differently. Centralization will enable control of currency supply and price. With decentralization, we rely on computers to handle crypto operation. We will not be able to control supply and price. In exchange, rules are fixed. People cannot manipulate rules for their advantage. The game is fair for everyone who understands its rules.

Store of Value & Digital Gold Cryptocurrency

Bitcoin is the pioneer and leader in Store of Value (SoV). Limited supply feature makes Bitcoin a Store of Value. Bitcoiners understand the software and its rules. It is extremely difficult to change them. Other altcoins with limited supply will fall into this category. They are competing with Bitcoin for market share. For example, Litecoin positions as Digital Silver. Ethereum is Programmable Store of Value.

I see the following emerging markets of cryptocurrencies.

Centralized and Semi-Centralized Cryptocurrency

On centralization side, we will have improved centralized currencies and cryptocurrencies. Central banks will eventually integrate more technologies. They may record and publish their currency operation on a public digital ledger. Private companies have made strides in providing stablecoin connection between crypto and fiat. Tether is an example of stablecoin connecting crypto and fiat. Ripple and Stellar are trying to adapt crypto software for traditional financial system.

Libra departs away from centralization. Facebook introduced the Libra Association which includes reputable members. Libra software is open source. Libra governance can be more transparent than other centralized currencies.

Interesting development in this category will involve experimentation with software system and monetary policy.

Inflating Cryptocurrency

I think this will be an emerging type of cryptocurrency. Crypto market has overlooked inflation. Being dogmatic about limited supply creates a blind spot. Crypto builder historically dismissed inflation. I think this hinders crypto adoption. Inflation can stabilize price. It discourages HODL behavior. It makes the currency more suitable for transactions. Inflating cryptocurrency can be decentralized and governed by fixed rules. As people becomes more comfortable with using inflating cryptocurrency, they will understand the role of SoV like Bitcoin.

Bitflate is a cryptocurrency with a constant inflation of 7% per year.