I do think Bitflate coin is really cheap now. But $30 is still real money . I own and buy the coins. I also spend my time writing and reaching out to people. I want to convince more people that this coin is necessary. It's not easy. The market is noisy. You can say given its price, it's a shitcoin. But on the bright side, if you believe in its prospect, it's a great price. The price is near mining cost. At least, you'll know it is not a scam. Someone spent real money mining these coins and sell you at close to their cost.

Speaking of crypto market, although it's saturated with many altcoins, it's stuck. Bitcoin is a lonely king. Nobody really has any idea where the space would go. Maybe, people will eventually come to see my proposal of inflating cryptocurrency. The hard, but great thing in crypto is you can decide yourself. Big money and big name investors have not been effective in crypto. You don't have to follow the marketing and hype. Do your own research and decide.

Bitflate is looking for collaborators. Anyone with technical/marketing bandwidth can buy Bitflate coins for cheap and join the project.

Hi everyone,

Here's my view of 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.

I think, in terms of money use case, there are other categories of crypto money. Most cryptocurrencies try to be some kind of Store of Value. Crypto space has not focused enough on money use cases. I think there is another category of decentralized cryptocurrency: inflating cryptocurrency. I made a diagram to illustrate emerging kinds of cryptocurrencies.

Thanks, it is a fun concept. It could be the next big thing in crypto.

And yes, the reward system does halving until 6.25. Then it turns around and starts inflation of 7%. This is to ensure that it inflates based on its supply of about 19 million. I calculated supply out in a table here:

https://docs.google.com/spreadsheets/d/e/2PACX-1vQueAgcI5ZyqkeFe6qcx7kaAsXJxZD-iZF2eLgduvlkwSl60qB0vN8-VlF2PJ-JFgvRZlUVzBdk8qSO/pubhtml

I implemented it . Bitflate coin is live on mainnet. People have been mining the coins. We're still early. Supply is currently at 2.8 million coins. First halving will happen at about 10 million coins.

https://explorer.bitflate.org/

You can mine the coins or buy it on Unnamed Exchange.

https://www.unnamed.exchange/Exchange?market=BFL_BTC

Bitflate is experimental. Please use pool and exchange with caution.

When I first thought about it, I also thought it could be a fun joke.

If you take the current fiat base, like USD, and inflate at 7% per year, then I think 7% is high. But with a crypto chain, we start from 0.

The reward system is:

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)

It'll take almost 30 years to reach 100 million supply. That is not a lot. Seriously.

Sorry, I took your question as implying that I am a socialist. I don't really know how to answer your question. If I am ok with paying tax for public service, e.g. road, am I a socialist? If that is your definition, then I fit. But I don't think it is fair for the libertarians who pay no tax to drive on the road.

There is cost of running the Bitcoin/crypto network. For the network to be secure, the cost will need to be proportional to the asset price. For example: you don't want the network to cost $1 to mine a $1 million transaction. The cost of running the network would be some percentage point of the active market cap, probably 0.1% to 1%. Someone needs to pay for this. When Bitcoin has no block/small reward, transactors would pay all/more. Hodlers are free loaders. They hold the coins and someone pays for the network operation cost. Inflation is a way to spread the cost out to hodlers. So when it is time to transact, hodlers themselves don't have to pay hefty fee.

Lightning Network is a scaling technology. It's adding another layer on top. This additional complexity will not reduce transaction cost. I think the overall cost of running these networks will increase.

Hi everyone,

New article: Tether Problem Highlights the Need for Inflating Cryptocurrency

Original Post: https://bitflate.org/post/2019/11/05/tether-problem-highlight-the-need-for-inflating-cryptocurrency.html

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

Tether stablecoin is in the news again. This time, Bloomberg reported that one Bitcoin whale may have fueled the price surge in 2017. Tether has pending investigations and lawsuits. Many bitcoiners continue to defend Tether. As a private company, Tether dodged authorities by relocating to geo friendly countries (Hong Kong and Taiwan). There is no way to fully audit Tether transaction record. Tether problem highlights the need for a decentralized and digital native transaction coin.

Permissionless is a key feature of cryptocurrency

It is hard to invent money that everybody on planet Earth agrees to use. Bitcoin is the first successful form of digital money. Permissionless is an important and necessary feature. Permissionless comes with tradeoff. We can’t control its price. Tether team may have good intention. But when they eliminate permissionless and try to control it, things inadvertently fall through the cracks. For example, how does Tether team reliably keep track and reserve fiat for each Tether coin? Tether team may have started with spreadsheets. Later, their software may contain a bug that inflates Tether coin over reserve. When Tether team operates the whole system, it’s really easy to make mistake. In this case, Tether team is wholly responsible. This problem will continue to exist in permissioned blockchain. When it comes to digital money, every participants need to share the responsibility.

Why should everybody trusts one company to create stablecoin?

When you need Tether coin, you go to Tether Limited. This creates a choke point. What if all cryptocurrency usage needs to go through Tether. Assume Tether team is ethical, how do we ensure that its software does not contain a bug. What kind of assurance does Tether Limited offer? The risk of using a centralized stablecoin is high.

Besides Tether, there are other stablecoins: USDC, Gemini dollar. But each coin runs on different software. We run into the same risk like Tether. Libra makes significant improvement. It works based on open source software and governed by an association of reputable members. But Libra is currently facing regulators’ scrutiny. The market is not ready for Libra.

The role of inflating cryptocurrency

How do we break this deadlock to move cryptocurrency forward? I think the space needs a new category: decentralized and digital native cryptocurrency with constant inflation. With inflating supply, people will not hold the coins for just price speculation. With balanced reward system and adoption rate, inflation can create more supply for new adopters. The blockchain is decentralized. The tradeoff is price would not be completely stable. But it is a good tradeoff for being permissionless. As more people become comfortable with using cryptocurrency, they would be more open to stablecoin alternatives like Libra. This is how we move cryptocurrency forward.

Original Post: https://bitflate.org/post/2019/11/05/tether-problem-highlight-the-need-for-inflating-cryptocurrency.html

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

Tether stablecoin is in the news again. This time, Bloomberg reported that one Bitcoin whale may have fueled the price surge in 2017. Tether has pending investigations and lawsuits. Many bitcoiners continue to defend Tether. As a private company, Tether dodged authorities by relocating to geo friendly countries (Hong Kong and Taiwan). There is no way to fully audit Tether transaction record. Tether problem highlights the need for a decentralized and digital native transaction coin.

Permissionless is a key feature of cryptocurrency

It is hard to invent money that everybody on planet Earth agrees to use. Bitcoin is the first successful form of digital money. Permissionless is an important and necessary feature. Permissionless comes with tradeoff. We can’t control its price. Tether team may have good intention. But when they eliminate permissionless and try to control it, things inadvertently fall through the cracks. For example, how does Tether team reliably keep track and reserve fiat for each Tether coin? Tether team may have started with spreadsheets. Later, their software may contain a bug that inflates Tether coin over reserve. When Tether team operates the whole system, it’s really easy to make mistake. In this case, Tether team is wholly responsible. This problem will continue to exist in permissioned blockchain. When it comes to digital money, every participants need to share the responsibility.

Why should everybody trusts one company to create stablecoin?

When you need Tether coin, you go to Tether Limited. This creates a choke point. What if all cryptocurrency usage needs to go through Tether. Assume Tether team is ethical, how do we ensure that its software does not contain a bug. What kind of assurance does Tether Limited offer? The risk of using a centralized stablecoin is high.

Besides Tether, there are other stablecoins: USDC, Gemini dollar. But each coin runs on different software. We run into the same risk like Tether. Libra makes significant improvement. It works based on open source software and governed by an association of reputable members. But Libra is currently facing regulators’ scrutiny. The market is not ready for Libra.

The role of inflating cryptocurrency

How do we break this deadlock to move cryptocurrency forward? I think the space needs a new category: decentralized and digital native cryptocurrency with constant inflation. With inflating supply, people will not hold the coins for just price speculation. With balanced reward system and adoption rate, inflation can create more supply for new adopters. The blockchain is decentralized. The tradeoff is price would not be completely stable. But it is a good tradeoff for being permissionless. As more people become comfortable with using cryptocurrency, they would be more open to stablecoin alternatives like Libra. This is how we move cryptocurrency forward.

I find tail emission a silly idea. It's surprising that people really give it serious thought. They didn't take calculus in school. When supply gets very large, a constant tail emission eventually approaches 0%. It will not add any meaningful change to supply. Tail emission is the same as 0 supply. It buys you some time before increasing the emission. It's patching subsidy so miners continue to mine blocks. It's not a long-term solution.

When I discuss Bitflate with 7% inflation rate, people often say it's already done with tail emission. But tail emission is NOT inflation. It's gotta be a percentage point. I'm doing a chain that inflates for real.

I want to promote Bitflate. I often write blog articles on bitflate.org. But this time, I'm kinda lazy, so I write a Twitter thread.

BTC is an interesting phenomenon. I think it has a high chance of survival. It lives on the narrative. The tech is just a mean. If there ever be a catastrophic event in the future, the blockchain can always fork. We've seen one hard fork before between BTC and BCH. People will flock to the prevailing narrative. If BTC is not digital gold, one of its future forks will be. It's good to own some of it.

Bitflate, on the other hand, is designed to inflate. I'm not sure how it'd play out long-term. Maybe, someone will decide to hard fork and reduce inflation when it reaches critical mass. But I think there would be ways to reduce value loss. Its inflation is predictable. It's possible we'd have two chains running together, one deflates and one inflates. The world is run by contradictory forces.

Hi everyone,

I wrote a new article: Economic Incentives for Inflating Cryptocurrency

Repost here for followers of this topic.

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

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

Skeptic: Your Bitflate coin supply inflates. It’ll devalue people’s bag of money. Nobody will want to hold it.
Me: Inflation creates more coins. More people will adopt it. That’s how it will retain value.
Skeptic: That’s a ridiculous idea. It won’t work.
Me: Yeah, it is kinda weird. But it may work.

Everyone got into crypto because they don’t like fiat inflation. Bitcoin is the pioneer. It has limited supply, really limited, eventually zero supply. This is more limited than gold which has about 1% inflation. Inflation has become a touchy subject in crypto. Most people reject it.

I think this rejection of inflation hinders crypto adoption. This is the reason why I decided to create Bitflate, a cryptocurrency with 7% per year inflation. Crypto enthusiasts question me about the incentives for people to adopt Bitflate. I thought a lot about these. Candidates are the technology, the marketing, the community, the belief, the hope, the opposite of Austrian economics, the solution to cryptocurrency adoption. But I think none of these are the incentives. Inflation is about economics. The answers are economic.

For Bitflate cryptocurrency, I see two incentives: Bitflate Reward System and Bitflate Adoption Rate.

Bitflate Reward System

Although Bitflate chain has inflation, I design a reward system to give more coins to early adopters. The idea is to encourage people to hold on to their coins and create some restriction of supply. I think this create incentives to hold Bitflate coins early on. This way people with coins don’t dump them. The reward system 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)

For the first 3 halvings, Biflate follows the same reward schedule as Bitcoin. But it will switch to inflation after 4 halvings. I think the reward schedule create incentives to hold Bitflate coins early on before Bitflate reaches critical mass. Even with inflation, it will take 10 years for supply to reach 31 million coins.

Bitflate Adoption Rate

After the chain passes its 4th halving, reward will start to increase. There is no supply restriction. Bitflate survival is dependent on adoption rate. There are now 3 possible scenarios:

- If adoption rate is around 7%, the coin will retain its value.
- If adoption rate is greater than 7%, the coin may gain more value.
- If adoption rate is less than 7%, the coin will decline and die.

Long-term Transaction Coin

If Bitflate manages to survive for many years, its adoption will eventually plateau. This is inevitable. At that point, I’m not sure what will happen. People don’t have incentive to hold it. Does it implode and collapse? I think we may be able to develop interest banking to prevent value loss. Because it is digital, it could be easier to manage than inflationary fiat currencies. It may become a transaction coin. Businesses may accept it.

Bitflate is experimental

Despite the two incentives, Bitflate can fail. If Bitflate fails to reach critical mass, it may implode. Price and hashrate will crash. Users may need more than just these two incentives. Historically, authorities force people to use whatever inflationary currencies they issue. On the other hand, people like deflationary assets like real estate, gold, Bitcoin. Bitflate is a new digital alternative. It is better than inflationary fiat. But it may not provide enough incentives.

I'm Bitflate dev here, a crypto with 7% constant inflation. For those who are looking for tokens to invest, check out Bitflate.

I've written a new article about the economic incentives for inflating cryptocurrency. Supply inflates at 7% per year. If adoption grows faster than this rate, there could be value in holding the token. There're 2 incentives for Bitflate:

Bitflate Reward System
Bitflate Adoption Rate

See the article below for more details:

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

Bitflate is experimental. Do Your Own Research.

I think Bitcoin should have a low inflation rate, maybe 1%. It'd reduce price volatility. I think volatility is a significant barrier of entry. It's not about the tech but psychology.

People laugh at my idea of a coin with 7% inflation. They dismiss the idea, call it weird, ridiculous. But calling me a socialist just raised the bar.

Thanks for your interest. Bitflate dev here. Most of the information can be found on Bitflate website. https://bitflate.org/

You can find the coin description in this article.

https://bitflate.org/post/2019/04/14/bitflate-cryptocurrency-with-constant-inflation.html

You can read through the blog articles to find more information. I've collected a lot of feedback for Bitflate now. I'll put them into a whitepaper.

Bitflate is decentralized like Bitcoin. So there is really no central authority to pay and promote it. Bitflate holders should tell others about Bitflate. I myself do a lot of it. I am an investor in Bitflate. But I suggest people to do their own research before jumping in.

Inflation rate of 7% is fairly high. But starting from 0, it'll take almost 30 years for supply to reach 100 million. Supply is somewhat limited. When such a system is widely adopted, I think we can develop banking account with interest to reduce value loss.

It is possible that the world only accepts two options: (1) centralized fiat issuance and (2) decentralized deflationary Bitcoin. People are too greedy to adopt a chain that devalues their bags overtime to open access for others in the economy. Everyone holds on to their bags. We are blocking each other. I think this is a crypto tragedy of the commons.

I'm the dev for Bitflate coin. Here's how I came up with 7%. I thought about dynamically adjusted rate. But the algorithm can be complicated and contentious. It needs to check price and volume from centralized services. These could be sources of rate manipulation. If the chain goes with a constant rate, what is the right rate? I thought 1-4%. But I think these rates are too low, inflation won't make the chain behave differently from Store of Value. I arrive a conclusion: inflation rate has to be moderately high, somewhere between 5-10%. I picked 7% from Rule 72. It has a nice feature. Supply doubles every 10 years.

Gold has 1.5% inflation. For Bitcoin, I think inflation rate of 1% seems to be a long-term viable option.

I'm working on a coin experiment, Bitflate. Instead of limited supply, it has constant inflation. I think inflation can reduce price volatility. When price fluctuate less, I think business can accept it. Bitflate is digital native and decentralized like Bitcoin.

https://bitflate.org/post/2019/04/14/bitflate-cryptocurrency-with-constant-inflation.html

Even though the chain inflates at 7%, if adoption rises faster, I think the coin may gain value. Do Your Own Research.

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

My view: Block size debate is a war that yielded two losers. It's kinda like the Vietnam War (North and South). Both BTC and BCH fought to solve the wrong problem. In the end people are bitter and confused. They still are. The outcome produces two coins that gain no significant user adoption. At the end of 2019, transactions are still low. We are no where near mass crypto adoption for both chains.

Block size and scaling is not the problem. The problem is in the monetary policy of limited supply.

There were brief episodes of hashrate drop during price drop. Bitcoin overall price has increased so its hashrate follows. Other altcoins suffered from hashrate drop. Miners are opex. They'll turn off hash power if there is not expected price increase target.

It's good to see other people thinking about the same problem I arrived to a conclusion: a moderately high rate would work. Something between 5-10%. I ended up with 7% because of Rule 72.

When people think about inflation, they think about inflating from the existing fiat base. If USD inflates 7%, that would be bad. But people are missing the crypto context. With a new crypto, you start from 0 supply. So 7% may be a bit low. I did start a chain for Bitflate. Supply is at 2.7 million coins. I won't hit inflation until 19.3 million coins. I launched the chain a few months ago.

https://bitflate.org/

I also have an altcoin thread for it on bitcointalk. I update Bitflate progress there.

https://bitcointalk.org/index.php?topic=5110495.0