Solution: you award people transacting a much larger (in terms of award to volume) percentage of the pot. It's simple to fix this, and I already have.


"Inflation" isn't such a bad word when the new money goes to the people rather than the banks or government. It should not typically cause price inflation at all with the proper precautions in place (like in decrits).


I must point out that a big part of recession is a slowing of the velocity of money. Deflation should *almost always* happen during a recession, but it does not due to price stickiness. Look at gasoline in 2008. Because of the simple fact that gasoline is priced sometimes even hourly, it does not suffer from price stickiness, and it dropped in half. If prices become too high for the average person to afford (respective to salaries and such), minting will become lucrative. And money will be spread into the economy. Yes, this would likely cause slight long-term inflation, but this is exactly what you are asking for. The wealthy are being punished for not moving money and killing the economy; and this new money will spread into the economy and avoid unnecessary suffering. It might inspire the wealthy to stop the shenanigans in the first place after a few economic power grabs fail.

It's a contradiction between encoin and decrits, but they don't work the same way. And there is a third option.

First of all, the energy usage is only one facet. The cost of hardware *does matter*. The human resource cost *does matter*. It doesn't matter what the mhash cost is in real terms is--as long as you can foster competition, people will find ways to do better, and this in turn must raise the difficulty to where the mhash cost is in line with whatever inertiacoin's (potentially original) coin cost is.

The original way I came up with to foster this competition was to algorithmically change the coin award at certain intervals. During these intervals, miners would be encouraged to lower their output, because if they don't, the difficulty is going to increase. However, more efficient machines would not really be bothered by this and would be able to profit handsomely during this interval. However, for whatever various reasons that could thunk up for this, more efficient machines may not want to or can not oblige, and this could cause a longer-term inflation of the crypto CPI.

I will walk you through what I am currently thinking Decrits will do:

1) It will algorithmically determine the number of coins to be created in the next Mint Block, as I call them.
1a) This number of coins is determined by a percentage of transaction volume over time. (note: for this to matter, transactions must be charged a percentage fee, which in Decrits is 0.01%)
1b) This figure will be difficult and costly to manipulate because it will require significantly increasing the transaction volume of the entire network over a period of a year or more while paying those fees.

2) A Mint Block cannot begin until enough money has been transacted to warrant it.
2a) This will be based on either a (large) percentage, equal to, or a (small) multiplier of the number of coins transacted since the last Mint Block.

3) Once enough money has been transacted, those who wish to create money will have to join a queue to begin the Mint Block.
3a) For the first 25% of the queue, 10% of the individual coin award (the amount each queuer will receive) must be supplied in the currently accepted difficulty with a 10% winning hash and an account number. (note: this can *always* be accomplished in 40-50 bytes because of the account ledger)
3b) For the rest, 5% of the award must be supplied. The most efficient are the most likely to start the next block, but we do not want to unnecessarily raise the difficulty if the majority of people are less efficient, so they get a slight bonus. (This will eventually lead to deflation if we do not account for it, and perhaps because of money supply manipulation.)
3c) Once 75% of the the block's worth has been queued, a minimum amount of time must pass before the queue will close. This figure will be based on some percentage of the the average time it has historically taken to create a Mint Block. (This means that magnitudes more powerful ASICs can not shut others out)
3d) If more than 100% have queued before the minimum amount of time has passed, a random selection of the queued minters will be made to complete the block.

4) Once the block begins, all minters are encouraged to mint at once because:
4a) The coin award is higher the faster you finish. Likely +10% for the top 25%, +5% for the next 25%, -5%, and -10%.
4b) Taking longer than an algorithmically determined amount of time (based on prior blocks) will result in penalties of at least 10% and perhaps more. (e.g. if everybody finished past this time, even the top 25% would still only receive -10% of the promised coin award.)
4c) At some point the block will close, and unminted coins are lost.

5) (Tentative) After the block is over, minters will be randomly assigned to groups (probably of 40) to determine the 10/5/-5/-10 payouts.
5a) This means that there will be groups where ASICs fight ASICs and GPUs fight GPUs (NB: obviously not all of them). This reduces the overall profitability potential of ASICs.


To avoid the p2pool-like data spam, the number of coins mined per queuer must be relatively high. I think the target length for each block will be around 5-10 days. This requires commitment from those minting. It will be annoying. And the fee to join the queue could be completely lost. 50% of those queued will make less than the award.

In addition to all of this, we must eschew mordorcoin and give money away for free. Now we know for damn sure that new money is needed with the difficulties associated with minting. The written decrits proposal proposes giving away 5x of this block of coins to transactions and 5x to existing accounts, both randomly (blocks of accounts will be stored together, and this will be the starting point for awarding free money to them because awarding every account is infeasible in a network of any reasonable size). This area can be nitpicked, but I have come up with some very solid solutions.

In addition to that, because network expansion could easily outpace the time constraints set on Mint Blocks, each successive Mint Block within a defined period will increase the tx/account award further. The second block in a row will award 6x to each. The third will award 7x. This may max out at 10 each, or maybe it could go on continuously (perhaps after 20x the difficulty could start increasing say 3% per block; with so much new money in circulation [especially to transactors], if this causes mild deflation it would likely not have any problems being counteracted). So even in the worst case scenario of everyone instantly switching to ASICs and intentionally not raising the difficulty, designing and producing those ASICs will never be profitable. Plus the inflation has to catch up and raise the average amount of transactions over an extended period, or the ASICs will simply run into a wall where they can not mint for extended periods.

How 'bout it?

After lightly reviewing some of the discussion on this, I will admit I was fairly dense to the point you were making about encoin being a mordor currency. Thanks Bubbles for the nickname though. However, after I did get you fleshing it out, I was against it because it created avenues for a monopoly over the money supply and/or a monopoly over the profit of an expanding economy. Shortly after you stopped posting again, I posted the very initial idea behind decrits here, which was my first thought experiment to eliminate those problems. The gist is to make other people money for your hard work mining. Sounds awful at first, but the people mining are only making money because there is demand for the currency, not because they are mining. This wealth must be spread out or I strongly believe you will find yourself with another bitcoin.


This would appropriately define Decrits. I don't think it would even be possible to know if you had a grailcoin because it would require absolute stagnation among all other things of value (and thus as "futile" to tie something to a CPI as it is to tie it to electricity). But a key to making IntertiaCoin work is protecting against moore's and koomey's laws, in whatever way they present themselves. Jumps outside of the curve (ASICs) are actually not that difficult to defend against. However, it would be very difficult to programmatically prevent, for example, the halving of the currency's individual unit value with a sudden halve in the cost of electricity, though.* But things don't actually work that way. In the mean time, if the new currency is distributed equitably among its users, then the inflation caused by this is not nearly as big of a problem--though it isn't the greatest thing for creditors. (Can we be all that mad about that?)

* - please note that if this does happen, it does not necessarily cause this value loss. If electricity becomes less expensive as a natural result of innovation, that is a benefit to all mankind. The price of products and services that rely heavily on energy could easily remain stable in the face of a money supply inflation due to the same reduction in cost of electricity.



Thank you for getting to the point of asking me the question rather than making a judgment. Unfortunately, an answer that will tie it all together requires me to again organize my thoughts. At least I've had a lot of practice. The Decrits proposal was focused on the major technical aspects to get the idea across of how you could create "InertiaCoin", as Red has called it. Even at the beginning of that thread I assumed I could solve certain problems that I knew were present. And I conceded that there are probably some that can't be programmatically fixed. It just isn't knowable. But that does not mean there is not a solution...

It's hard trying to combine the technical and the economical into one thing, and it's hard to explain one without the other. It's even more difficult to explain if I haven't filled in the gaps on how to get from point A to point C either. But I have a knack for finding B. At this point I am, often in a too aggressive manner (personality defect, what can I say), trying to get people to test me on Decrits like Red did with encoin.

My point is, briefly explaining it will only raise more questions, questions that are more suited for that thread. In short, I believe it would achieve a value that would be more stable than the goods and commodities it is valued against. It would very effectively prevent manipulation of the money supply. It would prevent excessive periods of deflation and/or "credit crises". It would prevent banks from being able to control the network. I know that doesn't explain much, but that is a huge change in philosophy from the encoin proposals, and I have designed with them in mind.

It *does not* require external information. I repeat, you are criticizing a proposal that you think I've written rather than the actual proposal. While at the same time you are proposing that the solution is more external information. You are going to run into walls every step of the way in trying to make a system that relies on external information that is also completely decentralized.

It is getting to the point where my time would be a lot more productive just writing the code instead. But I will probably make one more proposal before that point.

In a non-fiat, decentralized currency, the production cost of money cannot be zero.


You aren't patronizing my proposal, you are criticizing a proposal you think I've written.

I think you need to think about StableCoin as being a replacement currency rather than a complementary one. Think bigger and these problems are less important. Besides, these problems are no different than the problems that international commerce already deals with. Any cryptocurrency intended to replace or complement a fiat currency is going to have issues like this until it is accepted up and down the chain. It isn't a strong enough reason to focus on fixing day to day valuations, which I think is detrimental to progress.


You mentioned that I convinced you that a relatively stable currency based around electricity was possible. If that is true, then I think I can convince you that Decrits proposes to be even more stable, less attackable, and more energy efficient by using indirect information and reverse tragedy of the commons scenarios. I guess a simpler way to put it is game theory. Hell, one of the massively helpful ideas was yours to begin with, and I originally thought it was dumb. But for now, it is bedtime.

Red, why such the heavy focus on stabilizing a cryptocurrency against a fiat currency? Do you think the alternatives will still be too unstable? What do you think about a system that forces you to leak information about your profitability if you want to be profitable, and using that as a basis for stability?

I spent a lot of time debating with jtimon about freicoin before it was released. I read a lot of Giselle's stuff during that time, and his candid way of writing made it easy to fall for the allure of demurrage. But, imnhso, it attempts to fix problems that are too narrow in scope. And borrowing heavily from bitcoin, Freicoin is still set up as a commodity, but now a commodity that no one wants to keep.

It's nice to see some new voices speaking about Freicoin, but demurrage, like deflation, is a concept that only works without competition.

Which is why I said the community would have to agree since they'd have to voluntarily use the fork with the change. However, you only need a 75% majority of miners because 49% can power the network while the 26% 51% attack the 25% left.

I think it would be hilarious if a majority of the miners (and I suppose the community would have to agree) decided to set a date where coins still unspent from blocks prior to say 30,000 would become unspendable. Then we could answer the question of satoshi's intentions once and for all.

Moore's law, by golly, I totally forgot about that.


Luckily I haven't proposed an algorithm that attempts to find out the energy consumed or its cost.


Bitcoin's coin production is replaced by transaction fees. Transaction fees are essentially coins that are mined again. Admittedly my early designs followed the currency of Mordor scenario (edit: to a much lesser degree than what you described in the link--too long to explain), but that is nowhere near the case in the Decrits proposal.

I apologize for the sarcasm, but I've spent a lot time trying to convince people that there is an outside-the-box way to accomplish this, but I still always hear the same "problems" that the outside-the-box thinking is directly addressing. I might actually just be a lot further along than you give me credit for.


I don't know why because your meaning was fairly obvious, but I was thinking of the actual CPI when I said arbitrary. "If a loaf of bread costs 1 DCR in 2012, then a loaf of broad will cost 1 DCR in 2050, assuming the production costs of bread and money have not changed." This idea has been my cornerstone.

Instead of targeting a long term fiat exchange rate or something as arbitrary as CPI, why not create your own target based on hardware costs, electricity, and time and foster competition among miners to keep this target honest. "But it can't be done!" Well I wager it can.

Step 1: separate currency creation from securing the network. This is a huge task and one that has been solved in the Decrits proposal.
Step 2: find a way to force miners to compete against each other in who can create coins faster by offering incentives. In addition to this, difficulty must only increase, not decrease (this can only happen if step 1 is in place). See the Decrits proposal.
Step 3: while the technical supply of coins must be unlimited, the realistic amount of coins that can be created in a certain time frame needs to be tied to network activity. To make network activity "honest", a percentage of each transaction must be taken as a fee (Decrits proposes 0.01%).
Step 4: defensive measures must be in place to protect against attacks on the difficulty via ASICs or pooled power. See deeper in the Decrits thread.
Step 4a: make mining create only a portion of new coins with the rest being given away in a lottery to reduce the "hardware tax" as I call it, so that you don't need to be a miner to make a profit using the network. This reduces the power that, for example, a region with cheap electricity would have over one with expensive electricity. It also means that few coins actually need to be paid for in hardware/electricity/time, which as we all know is a complete waste.

And billion other things that would make the network better and more efficient for fun.


I would suggest checking out Decrits before potentially reinventing the wheel. Although I mention several times in that thread that many ideas are tentative, they are not so tentative in the 6+ months of delving down and refining since.

I'm the one picking what I want to see? You are the deluded person who thinks that determining how much BTC satoshi controls is the same as revealing his identity and that is your pathetic reasoning for telling Sergio to do something useful. You are the one that believes protecting satoshi's identity is more important than informing people about the hidden dangerous of bitcoin. Gee I wonder why.

Would selling 1M bitcoins do no harm to anyone? What you want is for this information to remain hidden because it is very damaging to bitcoin's reputation. No one who has not invested in bitcoins gives a shit about who Satoshi is. What they will care about is that this mysterious inventor has the currency by the balls.

I'm pretty sure I stopped doing that while you were still around, but maybe it has been that long.


dacoinminster: how have we not ever spoken? Or maybe I've forgotten. What have you written in regards to stable prices? Have you read the decrits and/or encoin proposals?

I think you mean, why don't you do something that doesn't threaten the bitcoin economy. Confirming or nearly confirming that satoshi does indeed have 1m+ bitcoins is not good news for the knob slobbers.