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1761  Alternate cryptocurrencies / Altcoin Discussion / Re: [ANNOUNCE] EnCoin - An alternative with a completely different paradigm on: September 28, 2011, 04:29:44 AM
I have a long thread on this forum about how one does fractional reserve banking with any non-fiat currency including gold.  I can find it for you.

I would be interested, sure.

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Of course I understand. That is why I came here. I would call it 1 ENC = $X = 10kWh. It's a wandering target but at least it is constant with respect to each individual's lifestyle.

No, 1 ENC will not = $X. It will at a specific point in time, but over time that figure will change again and again as fiat is devalued and/or electricity prices increase. Both 1 enc = $2 = 10kwh and 1 enc = $4 = 10kwh are valid figures depending on when you look, so you can not fill in $X unless you have a much longer and more complicated equation. I'm not trying to peg it to the dollar or any other currency, I'm trying to peg it to 10kwh.

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Point understood. But stores are still going to adjust their fiat prices to what they want. After that, they'll look at ENC and decide if a price change is to their advantage. There is no *fair* price! Just the market price. :-)

Yes, but I mean that in the sense there is no need to worry about a short-term spike. If a loaf of bread costs 1 ENC, unless something happens to significantly change the costs of making a loaf of bread, theoretically it could always cost 1 ENC.

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I'm not sure why you see a benefit to charging yourself a transaction fee for your own service. Or for peers to charge a transaction fee to other peers providing exactly the same service. See Internet Peering for the best example of what I'm talking about.

Not this again.

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Are you saying it is OK for it to take 1,000 times longer?

It won't take anywhere near 1,000 times longer. There is no cap on how many trustnets there can be. With demand that high, many, many more will form. Once the demand is filled, a lot of them will quit leaving the ones that were around before to keep securing the network.

Now if the network contracted by 1,000 times, it's a different story, because the only pressure to counter that is the transaction fee and my yet undescribed additional deflationary measure (which is meant for long term). But odds are if the network has contracted 1,000 times, it's dead anyway.
1762  Alternate cryptocurrencies / Altcoin Discussion / Re: [ANNOUNCE] EnCoin - An alternative with a completely different paradigm on: September 28, 2011, 01:42:20 AM
I wonder if calling TrustNets Freenets instead would cause any confusion with the freenet protocol. I'm trying to think of something relatively catchy, but I dunno. I need suggestions for proposal 3.0.
1763  Alternate cryptocurrencies / Altcoin Discussion / Re: [ANNOUNCE] EnCoin - An alternative with a completely different paradigm on: September 28, 2011, 01:11:26 AM
I glossed over this post and I feel like I have to address it, since there is a misunderstanding.

In general I think the video was full of crap.

Why? Sure it's over simplified, but it's also like 4 minutes long.

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I do want to point out that if EnCoin is intended to have a stable value base. That makes it trivial to create money "out of nowhere" via lending. It's also simplifies creating fractional reserve banks. More money "out of nowhere". This is on top of the new mining currency created "out of nowhere".

There is no Fed in encoin. So if it gets popular enough to where banks form, the people have the power over the banks, not the other way around. Banks can not just "create fractional reserve" because the network won't accept money that does not exist. So for a bank to accomplish this, there'd have to be a gigantic network layer over the top of encoin that supports fractional lending. And no one has to use it if they don't want to. Alternatively, regular banks could use encoins as backing for their fiat fractional reserve lending. That still does not make any more encoins appear from nowhere, and fiat money is useless on the encoin network.

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Only bitcoin like currencies that aim for ever increasing coin value (price deflation) discourage this "out of nowhere" money. There is a thread called "lending at negative interest" or some such where I disprove that silly logic.

On the contrary, the way bitcoin was designed (which, admittedly, might be necessary for a primarily deflationary economy) makes it trivially easy for "out of nowhere" money. Astronomical hordes (wow hordes or hoards works here, isn't that cool) of coins with no backing whatsoever and are unaccounted for in the economy make up probably 30-50% of the bitcoin worth. I've said it again and again, so many people have the power to crush the economy under their foot on a whim, and this power only GROWS and is given to even more people with less astronomical sums as time goes on and bitcoins become more scarce.

In another thread I pointed out that if satoshi only held on to 100k and 20.9 million coins were distributed to 1 billion people, the selling of those 100k would cause 1 BILLION people to lose 0.5% of their net BTC worth, and of course, satoshi gains that worth. That has no other definition other than mass inflation (edit: and transfer of wealth, of course).


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I certainly don't want to penalize the spenders and remove currently circulating ENC. That's exactly the wrong direction. The refund simply means, "Do no evil!"

But who best to give the newly created money too? Certainly not to someone who intends to hoard it. That won't change ENC exchange values at all. I could give it to those already spending. Perhaps by returning DOUBLE the tax to everyone in the transaction. That doesn't guarantee that they will circulate it though.

I hate to say it, but you are still missing a key point of my proposal: the price tends to 10kWh. You do not need to encourage or discourage spending or saving. You need to focus on encouraging a stable price, the other two will work themselves out just fine. HOPEFULLY, as I have stated in other parts of this thread, this means that the exchange rate may go a little crazy, but merchants do not need to worry about continually adjusting their prices vs fiat, because eventually the price will work itself out.

In encoin, hoarding is saving. There really is a difference. One person's hoard has virtually no effect on the economy, even if it's large. First, because to get a large hoard he would have had to save for an incredibly long time (14 ENC a month for an average computer) and by that time the market will be big enough to absorb it without batting an eyelash; and second, because the currency is backed by electricity. As frivolous as that may sound, it gives a guarantee that effort was put into creating these coins, and they do in fact have an intrinsic value. Beyond that, there is little incentive to hoard in times of deflation because the market is demanding more than the coins will eventually be worth. You'd be silly not to sell unless you thought demand was going to increase even more--and you DO NOT, I repeat DO NOT have enough coins to make a difference in demand by hoarding like it was so trivially easy to do in bitcoin. Someone else will just mine instead and take the profit. You are trying to fix something that doesn't need to be fixed, it will work itself out.

That's why establishing a fixed, unchanging transaction fee is important; sorry no refunds.

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I thought that the number of new coins being created should somehow be related to the current amount of coins *circulating*. Those are the ones that affect valuation. The tax is also related to the number of *circulating* coins. If the total economy is small, you need small efforts to affect change. If the total economy is large, you need larger efforts.

NO. Tongue You are proposing manipulating the currency instead of manipulating the people who make it and spend it. While manipulating the people sounds terrible, all am I saying is that they will be guided by obvious factors when the time is right. Manipulating the currency is BAD ECONOMIC POLICY. You can't predict the effects. You can't be sure you programmed it correctly. Encoin is trying to get away from that horseshit.
1764  Alternate cryptocurrencies / Altcoin Discussion / Re: [ANNOUNCE] EnCoin - An alternative with a completely different paradigm on: September 27, 2011, 11:08:18 PM
I have some questions about the non-linearity of the cool down mode rewards. But I want to think about things more in light of this insight.

Are you referring to 1/8th for 1/10th? That is because if coins are down in value, 1/10th is still losing money to mine--ahem I mean secure the network. Tongue I am trying to keep people from leaving in an extended period of bad economy, one of those big contractions we discussed earlier.

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I agree completely. But I want to point out that a lot of the benefits you are referring to come from trust in the humans behind the TrustNet abstractions. You can't chat with the code and ask it to vote on its best interest. I still think "Trust" means humans trusting humans. Compliance means nodes can't cheat.

Well, how about Reputation then? Does that satisfy your need for a better term? Wink Compliance points has a pretty awful ring to it.
1765  Economy / Speculation / Re: How would you increase the price of Bitcoin? on: September 27, 2011, 10:47:49 PM
Brainstorm:

You could create a Bitcoin trade competition together with MTgox to get newcomers into Bitcoins.

Example.

To join, you need to buy bitcoins for say $100 to your bitcoin adress at say MTGox.

Send half a bitcoin to the competition adress.

Than you need to trade the ones you have.

Now the one who can trade these to the highest value will get $5000
The runner up will get $2000 and the thirdplace would be $1000 etc.

The winners also get to keep their Bitcoins.

The competition will only run once atleast 1000 persons have joined.
They must not have an account at MTgox previously.

This would mean that there will new people buying bitcoins for $100.000.


More speculation, that is precisely what bitcoin needs.
1766  Alternate cryptocurrencies / Altcoin Discussion / Re: [ANNOUNCE] EnCoin - An alternative with a completely different paradigm on: September 27, 2011, 10:28:37 PM
Your other post is much more enlightening. Thank you for that. I will respond in detail to that in a few minutes.

Cheesy

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And important point is knightmb doesn't have to worry about anyone stealing his existing coins. Even if everyone else stops mining, and someone has 100% of the CPU power, they still can't generate compliant transactions to take them. They also cannot fork the block chain and erase them. His transactions are long behind bitcoin's programmed in (mandated consensus) block locks.

You say that as if this is possible in encoin. It is not. I was detailing a potential attack and how it was effectively worthless (actually, 6 million south of worthless). People misunderstand the scope of how the sybil attack is being defended against in my proposal. I was trying to clarify.

And no, he doesn't have to worry about anyone stealing his coins, he has to worry about the network becoming unstable and his coins being completely worthless (and we have to worry about him making our coins worthless in a sell-off). This is what I believe will eventually happen in a sustained 51% attack. Once the resources are gathered for that 51% attack, it will be easier and easier to continue it or start it again as miners are discouraged that they are not mining nearly as many coins and users are discouraged that transactions are not being confirmed or transactions that have been confirmed are being unconfirmed. Cascade of effects. I have seen people say, "well lol their coins will be so valuable they'd be stupid to take the network down."--referring to the attacker. This is the kind of logic that goes into thinking the only attempt would be a double spend. *all* factors must be considered, and I believe an attempt to take the network down has been grossly under-discussed.

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I completely understand your destroyed transaction fee and its purpose. I put a similar Tax in my post on the subject.

Then why did you put refunds in? Refunds are senseless to what the fees are trying to do. You made the system more complicated and convoluted with different difficulties et al.

Without the tax, and if you concede that mining needs a reward since it secures the network (or from a different perspective, securing the network needs a reward and it needs a secure way to pay that award which is achieved by mining), a perfectly stable economy is impossible as it will continually inflate.
1767  Alternate cryptocurrencies / Altcoin Discussion / Re: [ANNOUNCE] EnCoin - An alternative with a completely different paradigm on: September 27, 2011, 09:31:46 PM
I may be wrong, but I believe this sytem is flawed in the same way Encoin is. It assumes an equation will remain constant over time but it is more likely that it will vary. I'm referring to the assumption that an increase of X in difficulty will equate to an increase of Y dollars in the cost of mining. In the future that equation may change to X*1000 difficulty = $Y in cost, so because difficulty can only adjust linearly then at some point it will start playing catch-up with technological progress and so hyperinflation will ensue because it will always be profitable to mine.

Now if only you understood that an increase in X difficulty is an increase in Y cost is precisely not how encoin works, maybe you would feel differently. It is based around market factors and incentivizing the creation of coins when it is profitable, and accounting for it when it is not in a way that still keeps the network secure.
1768  Bitcoin / Bitcoin Discussion / Re: EU Antitrust Commission opens investigation in e-payment market on: September 27, 2011, 08:16:08 PM
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The EPC is the coordination and decision-making body of the European banking industry for payments. The Commission will undertake a careful examination of the standardisation process to ensure that competition is not unduly restricted, for example through the exclusion of new entrants and payment providers who are not controlled by a bank. Excluding competitors in the online payments market could result in higher prices for web merchants and ultimately consumers.

Translation:

We want to make sure the online payment system does not get too far away from the control of the big banks.

It is an anti-trust investigation against BANKS trying to fuck over NON-BANKS from getting into a lucrative market.
1769  Alternate cryptocurrencies / Altcoin Discussion / Re: [ANNOUNCE] EnCoin - An alternative with a completely different paradigm on: September 27, 2011, 07:44:02 PM
According to satoshi, and I agree, the long term security and stability of bitcoin is in the hands of bitcoin owners. Meaning people who own/hoard bitcoins have intrinsic interest in the security and stability of the system. These people will always have an incentive to run honest nodes. Self-interest causes them to support the currency and make sure the system is free from fraud.

I used to chat on this forum with a guy with the handle "knightmb". He owned 371,000 BTC. At current prices, knightmb's market capitalization is over $1.5 million dollars. He has a serious vested interest in the stability of bitcoin. From what I read, he no longer mines. I'm absolutely sure that he keeps an honest node running continually though. It is necessary, and trivial, for him to monitor the overall behavior the network. He can see at a glance that everything is in perfect compliance. If he notices non-compliant transactions creeping into the log, he will be the first to phone the developers and post a notice of an attack in this forum. If he has spent a single kilowatt of electricity on this monitoring in the past year, I will be shocked.

It's great if he comes here and makes a forum post. That doesn't mean it fixes anything. Bitcoin is still limp-dicked by an attack and going nowhere fast. Please read what I said again about what a continued attack against the network could accomplish. And AFAIK, unless he is looking and checking every single transaction that goes through the system, there is no automated checking for double spends or the like.

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There is a transaction fee in bitcoin. But, it was never designed as a reward system. It was a preemptive defense against someone swamping the system with needless micro-transactions. (See the code comments.)

The ultimate end design is to keep people mining when there is no longer any significant award from the block payout. And stop implying my transaction fee is a reward. NO ONE GETS THE TRANSACTION FEE, IT IS DESTROYED. IT CREATES NEW DEMAND FOR COINS. IT IS CONTROLLED DEFLATION. EVERYONE WITH ANY BALANCE WHATSOEVER BENEFITS.
1770  Alternate cryptocurrencies / Altcoin Discussion / Re: [ANNOUNCE] EnCoin - An alternative with a completely different paradigm on: September 27, 2011, 07:40:13 PM
I just don't understand your concepts well enough to say, "let me propose an encoin like system, except..." Had I done that, I would have obviously been talking out my ass. I have no idea why you made most of your design decisions. Like say, why you changed 10 minutes consensus periods to X hours. How each miner is benchmarked against kWh. Or how effort based new coin allocation attempts to affect monetary policy.

All right, I'm going to at least try to convey my logic on how these systems converge into a stable price point in one post.

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   Network Trust Block difficulty will be based around an average network being able to find one block every six hours. 6 hours x 50 people x 200Wh = 60kWh or 6 ENC.

200Wh is the BIG MAGIC NUMBER of encoin. The 6 hours and 50 people are variables. If the average network had 100 people, the average network would have to find one block every 3 hours to equal 6 ENC. If the avg network was 25 people, it would be 12 hours. The hash algorithm difficulty would be based on this in the same way as bitcoin's except for like so:

200Wh * NumTotalUsers = total kWh ASSUMED to be used by the network and thus the goal for the average amount of coins awarded.
Hash/s / NumTotalUsers = AvgUserHashRate
AvgUserHashRate == 200Wh

In reality it is more complicated than this since not every user will stick around for the whole block and so on. I guess "AvgNumTotalUsers" might be a better variable name.

Now, if everybody is using exactly 200Wh and has the exact same hashrate and has the exact same cost for electricity, we are living in a perfect world. Obviously all kinds of things will affect this, and the user will have to determine in their own case whether or not it is profitable to mint coins.

BUT--because I mentioned there are voteable payout structures within each TrustNet that can help smooth out variations in efficiency. For example, set payout structures based on finish for best hash. 1st place hash always gets X%, 2nd place always gets X%, and so on (this is not how it works in pools and it simply can't be done this way). This will keep the race for the newest and best hardware down to a minimum, and people with inefficient hardware can siphon off a bit on the people with more efficient hardware (I'm talking in terms of Mhash/W or Mhash/J, please don't misinterpret this). But there will be a minimum to qualify, and a requirement to be present until the end of the block, and so on to keep abuse down. These are voteable properties (trust modules--another terrible name I know) so they can be adjusted down the road in the face of new exploits or whatever. Kinks will have to be worked out.

The point is to award electricity, not efficiency as I stated before. Encoin will require less of a hardware investment because of this which means it can potentially draw more people in. More people == more popular == currency is valued. And hardware investment uses a god awful large chunk of any ROI you might see for a very long time. So the less hardware investment the better. We're looking for sunk costs here.

Now with the whole TrustNet system, it is almost like a game. Gain levels (trust), get more coins, be able to join respected networks, and so on. Who knows, I may come up with a shitload more ideas (aliases for trustnets and users is one, cheaper global messages could be another, all kinds of things to help make it a community). If the network doesn't like them, they don't vote for that module. If eventually people do and the vote is >50%, then it becomes part of the network. It's so much more flexible, although it may be hard to see at this point. Nothing that trustnets can vote on will be able to change the value of the currency though. Clients will not accept that unless there is some other designer who comes along and decides to fork it. The potential for that can't be denied, it is the nature of open source.

But *anyone* can always become trusted and get the benefits. They just have to stick around awhile. And for every person you can convince to stick around, the more secure the network is. This does not mean the more hash power there is because of the cool-down and the ENC benefit. That stuff has to be worked on in a little more but let me give a quick example:

Say the ROI on a typical minted coin is 33%. An average coin costs 10kWh, say the average price is 0.15/kWh, so $1.50+33% = $2.00 sell price. Market "crashes" to $1.60. TrustNets go into cool down mode and only mint 1/10th the coins at 1/10th the electricity for 1/8th of the award--I'm thinking of allowing 1/2, 1/10, and 1/20 but we'll see. Now 0.75 ENC is made for the cost of 0.6 ENC and people who need to make money to see any use to minting get a 25% ROI inherent, but on a very small amount. If the economy is routinely stable, people can run Encoin as essentially a background process that uses very little of their GPU. The computer can still be (almost) fully used. Yet the network remains just as secure as before. It avoids proof-of-work being the end-all be-all form of consensus.

And all kinds of neat things can be done when you can rely on consensus in lieu of proof-of-work. When you can know how many people are out there and what the network looks like. When you can vote on little details of how the network operates. When you can chat with your fellow TrustNet members. When you don't have to worry about the network becoming vulnerable if the hash rate drops. LOL when you don't need a 8gb/s connection to use it, or download a 1GB block chain before you can even see your first transaction. I have a vision, and that vision is Encoin (but possibly by a different name hahah). Smiley

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You gave constants for coin creation that seem unrelated to the transaction fees. I don't understand why you chose those constants and why (as both are part of monetary policy decisions) they are unrelated. If they are place holders to be calculated later that's OK. I just genuinely don't understand yet.

Coin generation has to be based on kWh, it can't change because then 1 ENC != 10kWh. So the only way to constrict the economy when in need is by transaction fees and allowing coin generation to securely reduce in output. They can not be tied together. Transaction fees could be variable, and perhaps there could be two fees, one for stable/expanding economy, and one for contracting economy. But this would have to be voted on by the TrustNets, the software can't decide on its own, it is against how I think this should work. That could piss off people who don't make coins. So I would really like to have a transaction fee set in stone.

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What I'm trying to understand is to what value/function does this system converge: If a new ASIC is 100 times more efficient? If a big new vendor joins the network? If the price of electricity spikes? If in any situation, the value of coins tends either to zero or infinity, I know the algorithm is not stable.

If some new thing that only 1 or a few people had was way more efficient, then they would siphon some money off of the new coins being made. It's hard to calculate how much, but the bigger the network, the less it will take from each coin (and I have even more ideas to lessen the impact of this type of thing, but it is for a much more advanced version of the proposal). I don't know what you mean by a new big vendor joining. I don't see how the price of electricity could "spike" especially across the entire world at once. It should be a gradual process that will gradually increase the value of encoins vs fiat. The value of coins tends to 10kWh, whatever 10kWh is.

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To combat increases in hardware efficiency over time, you propose rotating algorithms. Rotating doesn't seem to work, because if someone is willing to build an ASIC they might as well keep it around for when rotation comes back. 4 algorithms, 4 ASICs. Run when appropriate.

No, I proposed changing algorithms. I did think of this exact same scenario, believe it or not.

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Beyond that, your concept seems to require competing engineers. Who decides if existing hardware is too efficient? Who gets to choose the next proof-of-work algorithm? How do you make everyone else adopt those new rules? That seems like a different kind of consensus building completely unrelated to your TrustNets.

If by "too efficient" you mean in the future where everything uses less electricity, I have an idea that will add in some deflation to the economy slowly, over a very long period. And it is simple and regulated and would not cause any drastic consequences like satoshi's boneheaded award halve. This is what I was referring to when I said I didn't want to give something away yet. This deflation can still be counteracted by increased minting and so on if necessary. The proof of work algorithm will be changed randomly, every X primary blocks, by using a hash of the previous block. When the developers (or anyone with clout) releases a new module with a new, futuristic hash algorithm, it will be added to the pool of algorithms already in use by a TrustNets vote. The vote is not a one time thing. When people upgrade their client, they will have an option to vote yes or no to this new potential change to the network. Then the client will automatically cast their vote during every primary block cool-down phase. Once >50% agrees, then it is added as a valid module.

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I'm genuinely interested in understanding how your system meets its monetary policy goals. To me, all the other bits are optimizations to previously solved problems. They are interesting in their own right. I'm just interested in monetary policy first.

Let the people control whether or not coins are minted. Coins are always minted for approximately the same cost, so it is not like they are voting them into existence from nowhere like fiat. They always have an inherent value of 10kWh. Transaction fees are a mild deflationary measure to counter over-minting and low demand without requiring an expansion of the economy, even though stable economies tend to always expand as population increases.


I'm going to give some reasons why I chose 200Wh over 100 or 300.

100Wh disadvantage:
* Electric value enters the economy at a slower pace. People would have to adjust their GPUs to make sure they are using only approximately 100Wh, half or whatever it comes out to be. (I plan on having a helpful calculator in the program.)
* With a higher difficulty (time * computation, I'm referring to time here) of adding value to the economy, extreme deflation is a lot more likely if the network booms.
* Psychological. A month of effort nets you 7.2 coins if I keep the 10kWh figure. I could make it 5kWh I suppose.
* Potential for abuse. Hacked clients *will* come out that divert half of your GPUs resources to one node and half to another so that you can make double the profit. This isn't a huge problem, but by restricting it to 100Wh you are allowing easy access for some people to have this advantage over others. I suppose, in the end it really doesn't matter but it would waste network resources just to allow people who want to go full blast to go full blast.

100Wh advantage:
* FPGAs and what have you have less of an impact. While they're still going to be more efficient, they are not siphoning off as much of the economic value.
* Future cpu/gpu electricity usage going down could have less of an impact because instead of going at half the normal rate they could go full blast or whatever ends up being the equivalent.
* Since deflation is more likely in a boom, it would encourage more people to be part of a TrustNet (blah blah whatever you want to call them).
* There would be less "extra coins" in inflationary periods. e.g. the inflation won't be as big because people are not putting in as many coins before they figure out it's happening. So it could bounce back quicker.

300Wh disadvantage:
* A lot of people may not be using 300 watts worth, so they are getting a bonus even though they are not using as much electricity (assuming an efficient card).
* FPGAs could have a much larger impact if they become any significant portion of the economy.
* lot of extra coins in inflationary periods, may take a very long time to settle back to equilibrium.
* lot of extra coins in deflationary periods, that won't last long and the demand will probably all be grabbed up by anyone that was there before the boom.

300Wh advantage:
* basically the opposite of everything in the 100Wh disadvantage category.
1771  Economy / Speculation / Re: How would you increase the price of Bitcoin? on: September 27, 2011, 02:59:48 PM
buying 10,000 usd worth of btc

can i have that 10,000 usd now pls
1772  Alternate cryptocurrencies / Altcoin Discussion / Re: [ANNOUNCE] EnCoin - An alternative with a completely different paradigm on: September 27, 2011, 09:46:03 AM
I wrote down the concept here. I think it got lost in all my ranting. There is no central server concept. Fully distributed. It's not that I don't use proof-of-work, its that I don't require proof-of-work for security. That makes mining optional except when it is actually appropriate to create new coins. In price inflated times nobody has to mine.

"For the sake of discussion I'm going to propose a hybrid system that's like bitcoin, except that instead of using mining to add the next transaction block to the chain, it adds the block through consensus."

Can you say how that consensus is achieved? Because that's a big gap in logic to just assume everybody will agree with nothing to back it up. What if one node disagrees just to spite you? How do you guarantee every node gets every transaction? How are all of these nodes communicating? How do you know if you've even reached consensus without knowing how many nodes there are?

I mean you could basically copy everything I've said about TrustNets, but make it so that they only mine if they want to. Oh wait I've got that covered with the 1/10th or 1/20th cool down mode with the 1/8th or 1/16th reward to ensure that they keep on doing it. Yes, they're still mining, because they're actually gaining something from it. By what incentive do you plan on keeping these people around as trusted peers, or whatever you want to call whoever reaches the consensus? The goodness of their hearts? During a contraction, coins are worth less and people are probably cashing out because they're afraid. How many people can you encourage to weather the storm? How do you prevent an attack on the consensus?

"For this discussion, just pretend I can prove that it's a secure process."

that is a whole hell of a lot to pretend, considering it is the basis for a p2p currency
1773  Alternate cryptocurrencies / Altcoin Discussion / Re: [ANNOUNCE] EnCoin - An alternative with a completely different paradigm on: September 27, 2011, 08:39:11 AM
Yeah, I did feel like I was ranting a bit. ;-)

I feel like you are reading what I write as more critical than I mean it.
I totally support your goal of creating a stable EnCoin currency.
I'm not opposed to you or anyone else calling it "a service" and charging for its use. Discussing those goals, however, is not a priority for me.
I happen to like the client/server part of the idea. It reduces the number of peers that need to communicate.

The "service" aspect is a large part of the economy and how it will operate. You want to know how the price will stay stable? Because of the price of the service and rewards geared towards making the population do what is necessary to keep the price stable.

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I'm still totally baffled by a lot of the names you have chosen. I've been developing software for pushing 30 years now. I know naming things is often one of the hardest parts. The terms "Network Trust" and/or TrustNet have too many ambiguous meanings. As an outside observer I think you should split your discussion into its two separate senses.

second draft, whatever, it's in the works.

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However, later you explained that each "partner" serves as a "host" for clients. It is not clear to me that clients even know that TrustNets exist. Perhaps they see each individual node as fungible automatic "teller" machines and don't care to which bank it belongs.

part of the problem is adding new ideas without going back and looking at everything as whole and re-writing to compensate.

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Well you caught me there! :-) As you know I gave up on bitcoin more than a year ago. I only know of that event from headlines. I was around, however, when the developers deliberately changed the bitcoin client to fork the block chain and rewrite history. It seems there was a bug, and non-compliant transactions had made their way into the block chain. The old clients would accept transactions from the new client, but the new would accept from the old. It was really interesting watching the new chain overtake the old and all the old nodes dumping their entire reality. It really gave me pause.

Well I don't know the details on this so I can't really comment. I'm curious now though.

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I was actually serious here. I think inside your sprawling confusing misnamed concept, is a much simple gem of an idea struggling to get out. :-)

I'm curious how you plan on awarding coins in the system without proof of work. Not saying it's impossible, just genuinely curious. Are we going back to a central server concept? Because that, unfortunately, doesn't interest me.
and "sharing the wealth" has absolutely nothing to do with what the system is trying to achieve. I'm trying to put together a quick qt app to see how some of the numbers could fudge together. I will host it up somewhere when I'm done.
1774  Alternate cryptocurrencies / Altcoin Discussion / Re: [ANNOUNCE] EnCoin - An alternative with a completely different paradigm on: September 27, 2011, 06:08:08 AM
You know, such a snotty attitude isn't very becoming of someone who's trying to rally up support for a purely on-paper idea.

Good luck with your *coin.

Haha sorry, with all the other crap I thought you were JohnDoe, that's why my response was a bit terse.
But "bitcoin isn't fiat" is just another in a long line of fallacies.

from wikipedia

The term fiat money has been defined variously as:
any money declared by a government to be legal tender.[4]
state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.[5]
money without intrinsic value.[6][7]


Yes it might not be pigeonholed into the exact modern definition of being issued by a government, but the sentiment is the same. Instead of governments, it's early adopters that have the ability to "issue" new currency at will.
1775  Alternate cryptocurrencies / Altcoin Discussion / Re: [ANNOUNCE] EnCoin - An alternative with a completely different paradigm on: September 27, 2011, 05:53:59 AM
I'm going to take one more shot at this. Your calling me back here has been fun. I want to thank you for that.

I understand what you are saying about: trust = hash * time vs. bitcoin's way. I don't thing that is "trust" though. I think hash * time = "effort". I'd don't think I'd even call it "work" because I'm not sure anything is actually getting done for the effort.

First of all, money is being paid for the effort. I pointed out that it could cost $6 million to perform this attack against a network with a size comparable to bitcoin's. Certainly no big deal for a government, but it weeds out the script kiddies.

And you are forgetting the other half, that trust can be removed by consensus (via proof of breaking the rules). So all that money and time spent is for naught.

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I'm also absolutely sure you overstate the dangers to bitcoin accounting. In bitcoin if you gain 51% of the hash power and you want to delete a transaction that happened 5 blocks back, you basically have zero hope of accomplishing that. If you have 51% of the hash power you CANNOT generate a fake transaction. You also can't transfer money from one account to another. You can't even do more than stall a transaction with 51% probability.

The dangers you hypothesized for encoin were much harsher than those bitcoin is currently suffers from.

This is what I said: This means, as long as the attacker feels like attacking, the network is interrupted and may be permanently damaged thereafter.

If this were an ongoing attack, transactions will eventually be dropped, confirmations could never be sure, and double spends would be permanent (this is the least likely of intents of an agency attacking bitcoin). Civil unrest ensues, nobody wants to mine anymore, bitcoin crashes--accomplishing exactly what the attack set out to do. It would only have to happen once to prove that bitcoin sucks and is unreliable.

I'd say the entire project going in the toilet is a pretty harsh outcome. But this generally isn't discussed, because double spending is much easier to chew because that will only affect someone else.

Now yes, what an attacker could do with encoin sounds a lot more disastrous, but you have to remember that the honest network is still chugging along with barely a chink in its armor. And clients will know that something is wrong with the network that they're connected to. And assuming the encoin network is on a scale that is big enough to be in the public eye, this would be big news. But I believe I mentioned somewhere in the proposal that IP addresses relating to trustnets would be in the trustnet blocks so that new users can find them. Well, if a user that was only connected to dishonest networks checks back to an older copy of the primary block, odds are pretty good they could find a working IP address to get back on the right network (plus any internally saved IPs). So the chances of a user being duped into this dead network are almost zero. And even if they are, anything that happens on that network has no effect whatsoever on the real network, so it is harmless. The bad network quickly becomes a ghost town.

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I'll let most of this slide, since I'm under a pseudonymous handle. But trust me, I have more P2P experience than you know.

Well, you did remark that "That whole concept is STUPID and IRRESPONSIBLE." about a potential grief attack on the network. Because, like, nobody in the history of the internet has ever tried to fuck up someone else's good time.

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The important part of my message is about compliance to the protocol. In bitcoin, even with 75% of the hashing power, you can't stick a transaction into a block if it won't pass the validation rules. Every other honest node will reject your block. Worse, they'll all know you are a liar. That is what compliance means.

If I have your previous PB balances and all of the new transactions for this period, you had better not try to give me a new PB with balances that don't match the known transactions. If you do, you sure as hell better be able to produce a valid transaction I'm missing that reconciles the differences. I don't give a flying fart if your (hash * time) effort is 100% and my effort is 0%. If the math doesn't work you are still lying. That is what compliance means.

Sure, that is what compliance means, but you are forgetting that this proposal is trying to encompass a future where there could be 2 or 3 thousand transactions per second. I don't know the exact byteage of a transaction in bitcoin, but with having to account for all the small pieces that make it up, it must be at least hundreds of bytes. Encoins don't have to worry about the history of each divisible coin, so they should be smaller. Regardless, at 200 bytes we're looking at 16.5GB of transaction data per day. Gonna take awhile to have every user that makes use of "the cloud" or bitcoin's pseudo-nonymous network to digest that information. So instead of requiring high-level network servers to be a trustnet, instead data will only be available on request. Because a regular user does not need to know every. single. transaction that comes through the network. It is of pitifully poor design if there is another way. I mean, I didn't set out to solve one or two specific set of problems here. Bitcoin has a future problem around data transfers, the solution is, essentially, "get a connection with 8gbit/s internet access" and this is for peers too! https://en.bitcoin.it/wiki/Scalability (note it says transactions are currently around 500 bytes so I was off there)

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For that matter, previous investment of time adds nothing to ones trustworthiness. Say, I take a copy of the bitcoin block chain and validate it. I am now equally as capable as any other node at spotting fraudulent activity. I've spend no time and generated not a single hash. But even if the 10 longest running nodes agree to accept a new block with an invalid transaction in it, I can still publicly call them faulty at best liars at worst. Compliance means agreeing with the specification, not with the majority.

Dude, stop equating trust with interpersonal relationships. And stop ignoring the fact that gaining enough trust would cost millions of dollars in a reasonably sized network. And you are disregarding the fact that one node that knows the others are lying has no way to communicate this information to all the peers. Seriously.

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My recourse to compliance violations is not to bend over and take it because others have 51% of an imaginary quantity. My recourse is to publish the data on this forum. Call you a liar. Call the authorities and start sending out press releases. That is what compliance means.

This is so ridiculous that I want to stop responding.

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If the only digital currencies you've ever seen are bitcoin analogs, I know it maybe hard to understand that most digital currencies and money transfer services strive to not waste CPU cycles or electricity. Expending needless effort is simply not required to guarantee the validity of crypto-currency accounting.

If you changed bitcoin into a client server system with only a single bitcoin server doing the accounting, it would remain equally as trustworthy and secure as it is now. So long as everyone can download the server's history and validate the current state, there are simply very few ways for the server to cheat. If every client keeps track of the most recent couple of block hashes, then periodically checks to make sure they don't leave the chain, there is simply nothing the server can do while still remaining in compliance. Every false move is instantly detectable by even the simplest of client.

Yeah but there is that trivial matter of someone taking down the server and ruining everybody's fun.

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I can show you how to take bitcoin's current implementation, remove the proof-of-work nonsense, and turn it into P2P network of Trusted Servers as you described. In the process you'll lose none of bitcoin's current security. If you want to add back in constant kwh mining and transaction fees, to help sustain a stable monetary policy that's awesome!

If you want to add a complicated history of effort model to rationalize sharing the wealth, that's your own business (literally). It adds, however, neither security nor trust.

Wow I do believe that someone has been insulted. But I'm not gonna be goaded.

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A while back there was a bitcoin hack where a trojan stole wallets and transfered money out of people's accounts. There is nothing in the rules of bitcoin that prohibits that. There is certainly nothing in the rules that enables anyone to reverse that. But the programmers changed the rules and rolled things back.

That is what "Trust" means.

You are referring to a website that was hacked, not people's wallets. I see you don't have a good understanding of the bitcoin protocol and what it is trying to achieve. You are missing some very key points that I am emulating with my design, and completely missing where it diverges and for what reason. I have tried to explain, but you are not accepting or even refuting with sense, so I give up.
1776  Alternate cryptocurrencies / Altcoin Discussion / Re: [ANNOUNCE] EnCoin - An alternative with a completely different paradigm on: September 27, 2011, 05:00:52 AM
Bitcoin is fiat, just like dollars and euros and whatever else. Encoin is not.

There is no central issuer of Bitcoins, and Encoin doesn't exist.

take a gander at this and see if you can make it to the 1:30 mark and beyond:

http://www.youtube.com/watch?v=hx16a72j__8&feature=player_embedded

additionally, this is a lot to ask, but try to see if you can draw any parallels
1777  Economy / Economics / Re: Screw Deflation-To-The-Moon, Bitcoin Needs Help NOW on: September 27, 2011, 04:30:52 AM
Oh, I don't use Bitcoin in that fashion. Sounds great for you though if you know when to enter and exit the market.

That's either because you weren't early enough, or you aren't patient to wait long enough.

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It matters if you are fooled into believing your coins are more valuable than they are because you fail to take everything into account. Assume someone can dump hundreds of thousands of coins on the market whenever they like.

Two things: 1) it's not a matter of "believing" it is a matter of what the market is charging, which is highly dependent on supply (which is highly controlled by the people with coins, aka the elite) and demand 2) not everyone is aware of all the market factors which no doubt is part of the logic of this pyramid game

then of course you counter: "well that's their responsibility"
and i say: "that's called fraud"
and you say: "no it's not"

and i stop posting

Let's be clear, no one is "taking" anything from anyone. Did the people who bought thousands of coins at $.10 USD each "take" money away from the early adopters who sold them their coins? No, they both exchanged fair value at the time.

Yes, let's be clear [insert rehashed bullshit meaningless argument not based in reality ad nauseum]
1778  Economy / Economics / Re: Anyone keeping track of merchant profits? on: September 27, 2011, 03:21:57 AM
I'm not one for ad homs, but you're an idiot.

Think for yourself.


heh, I had the very same argument with p4man in another thread and he wouldn't budge. I was being highly sarcastic for his benefit.
1779  Economy / Economics / Re: Screw Deflation-To-The-Moon, Bitcoin Needs Help NOW on: September 27, 2011, 03:07:16 AM
That example works if you ignore Bitcoins that already exist but aren't being used.

Uh, duh. That's the whole point of bitcoin. Hoard until the price skyrockets then sell. Didn't this already happen? I'm pretty god awful positive it did.

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That would be kind of silly, wouldn't it? Especially when we know the exact amount in existence.

It would be kind of silly if you didn't pay attention to the markets to what actually happened. Sure we know how many there are, but there aren't that many for sale, so what does it matter? We won't know when they will go on sale, so what does it matter?

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Also it's not a one way street. Remove Bitcoins from economy by saving and deflate the total a bit. Put those Bitcoins back in the economy by spending and inflate the total a bit. It evens out in the end.

LOL it evens out by taking money away from late adopters and giving it to early adopters. Perfect pyramid scheme with thousands of earlier adopters vehemently showing it works to encourage later adopters.
1780  Alternate cryptocurrencies / Altcoin Discussion / Re: [ANNOUNCE] EnCoin - An alternative with a completely different paradigm on: September 27, 2011, 02:50:25 AM
By the way, everything I have stated that is not in regards to economic policy could have been done with bitcoin.

The goal of Encoin's economic policy is not to facilitate a large transfer of wealth from late adopters to early adopters. It is to provide a stable medium of exchange. While unpredictable future events (fusion power for one) could slightly devalue the currency, it is absolutely nowhere even close to even being remotely in the same solar system as what someone with 25k or 100k or any large sum of bitcoins could do to the network that is based solely on scarcity with no inherent value to back it up. Please keep that in mind before dismissing encoin out of hand because you don't think that it can work.

Bitcoin is fiat, just like dollars and euros and whatever else. Encoin is not.
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