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It is to me an apparent contradiction: either you have external information or you have a distributed algorithm that can compute it's own energy use. There doesn't seem to exist another way to reliably move from hashes to KWh. Something as generic as Moore's or Kommey's laws can't provide stability in the short run.
Correct, there's no way to enforce 1kWh = 1 coin, this would have to account for the varying electric costs of different areas as well as the efficiencies of different cards, and there's no way to do that. Its not for the protocol to know its own electrical usage, its for the miners to decide what the cost is of producing them and if its profitable to sell. |
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I agree that the idea isn't too well thought out, but I think the idea is more to fix the ratio of difficulty to reward. Thus, as the difficulty goes up, so does the reward. As difficulty goes down, reward goes down. Difficulty could still be adjusted to maintain a steady 10-minute block window.
Thus, when the price spikes as it recently did, it becomes incredibly lucrative to mine and sell bitcoins. Everyone and their grandma starts mining, driving difficulty and reward both way up. The increased reward causes bitcoins to flood the market, putting downward pressure on prices. A similar pressure happens in the opposite direction.
The problem of course is if you are trying to create a stable coin there are extended periods of time when the appropriate thing to do is to generate ZERO new coins. That makes mining unprofitable for everyone,so everyone stops. In a bitcoin style framework that means that block creation gets seriously delayed and transactions don't get confirmed. After a while difficulty drops to speed the process back up, but the supply&demand exchange value hasn't necessarily fallen with difficulty so coin creation starts again. Even though the correct monetary policy may be to still create ZERO new coins. As far as I can tell this doesn't produce a stable currency. It osculates tending toward a zero coin value. (continuous over production of coins) It also tends to drive the difficulty level down along with the coin values. Not a zero coin value, the baseline of the coin value is determined by the cost of its production. In such a system there is no such thing as 'over-production', as miners have no incentive to sell coins for less than it cost them to make, thereby restricting supply and applying upwards pressure. Also price as a product of hash rate (cost does matter):  |
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Post updated to reflect position.
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Link has been updated to a private host.
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Sorry, turns out the bitcoin based file host i used didnt like people using it for free, lets try again...
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Hi, I would like to present my proof on how to make a stable cryptocurrency. By far i am not the first to think of these methods, but i hope to present a viable solution for implementing them. qbit³ - Whitepaper.pdfI should clarify the development aspect of this, I am not an engineer, my specialty is in system design, what i am submitting is the front end that will enable end-users to easily grasp the value of the currency as it relates to major currencies, all while maintaining the value and stability of the currency in light of market conditions. Like all good design, this is done in simple form as outlined below. Should another creative mind have solutions to backend problems like efficiency, resiliency, and scalability, these two solutions could be merged to form the next cryptocurrency. Steps to produce a positive end-user experience throughout the course of the currencies life: 1. Remove the 21million limit. 2. Set the currency decimal place to .001. 3. Set the block reward at .001, and then to scale linearly past 1 Terahash to 1qbit @ 1 PetaHash, and so on. Theory: Other stable-value currencies that toy with the idea of money destruction, time penalties, or free handouts dont address the reality that penalties will never be desirable nor practical in controlling supply and demand, nor will free handouts or any exchange-related action by the protocol. As we can see now it is not shortage of supply so much as it is the perception of this shortage that satoshi created to help fuel adoption of his currency through speculation. In the same way, a system destroying or shaving off coins would be perceived as a currency that automatically loses value, so would freely distributing new currency without anything to back it. This is why i propose that mining is the all essential mechanism to validating the price of a currency, and that to free it from the bonds of artificial scarcity we simply have to remove perceptual limits, and allow the currency to scale with the market. Its as simple as that. No need to unduly reward or penalize users for simply doing what they're supposed to do. Proof: I would like to offer proof that the most recent bubble was not the result of 'hoarding' (lets call it 'saving', what we use to do in the prosperous 20th century), but it was in fact the result of (among other socio-political factors) the increased cost of creating a restricted supply: Hash Rate Vs Market Price (USD), matched by date. The increased cost of producing a Bitcoin preceded the upswing in price by over a month in the beginning of the curve and by a week in the end. Had the cost of producing a bitcoin stayed the same despite network conditions, miners would have been less incentivised to hold on to them in the first place, which would have quelled the price war that led to the extreme volatility that followed. |
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I have a quick question, when I'm selling my bitcoins via the site you are buying them at a lower price then what is the current rate, I just was curious, this is how you guys make money and stay in business right? I'm just curious as to how that buy number is calculated. I would assume it is a certain percentage of the current rate, right? Seriously, I'm just curious about it, that's all.
Buy low sell high, thats the idea. |
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I have tried a couple times now to get a response from fastcash4bitcoins and they have not responded, should change their name to fastcash4bitcoinswhenwegetaroundtoit
When and how have you contacted us multiple times? through email, once about 6 months ago to buy coins, once again recently to sell coin (i was asking about how you price your silver). You indicated we "lost your business". I didn't feel the need to respond when there were real customers who needed support. So beyond trolling what exactly are you doing in the FC4B support thread if you aren't (nor intend to be) a client of FC4B? You lost my business because you didnt respond within a week, then i mentioned this fact to you and you still didnt respond. Now im here mentioning the fact that you have a track record of poor communication and you have acknowledged the fact that a potential customer isnt a "real customer" to you therefore its ok to treat them poorly. |
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would Bob have to make note of the value of btc every time he receives some? If Alice is "helping out" Bob, is this a loan, or gift, or income to Bob? If income or loan, he would want to record each payment, qty and date. The market value can be determined from the exchange rate under a few different ways. So then let's say it was income, and Bob holds onto the coins the entire year. He has income from receiving the coins at the value when they were received. Hey may have unrealized capital gains at the end of the year but until he cashes them out (or spends them) those need not be reported. If instead this was a loan, and bob started repaying, all interest payments would be converted to USDs and he could expense that as interest expense. But other than that it doesn't matter if the value goes up or down on the value of something that was borrowed. Related: - http://en.bitcoin.it/wiki/Tax_compliance Alright so bitcoins are considered a commodity and not a currency. |
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Bitcoin users are affected, you still gotta get your money out.
Thanks for the article, the harder they dig the more i feel like throwing away my plastic and moving back to paper
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Lets say Alice wanted to help Bob out, so shes gives him 100BTC but over the course of a year. Bob is a good citizen and wants to report it as income but he also believes his btc will appreciate so he doesnt want to cash it out just yet, would Bob have to make note of the value of btc every time he receives some? Which metric would he use? Bob understands the IRS doesnt have any position on this yet, but Bob also understands the IRS might attack him nonetheless.
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Wait, why would you shut down just because one bank didnt like your business? Could you please clarify what problem the bank had, they shouldnt of even known what you were doing since you would have been withdrawing cash and accepting coin which would be a completely transparent process to them. And even if you are transferring ownership to your partner, why are you selling off your domains? Why not just let him take over?
The bank has decided we are "Too High Risk" to due business with. The Auctioning of the domains is because I disagreed with Ryan on the Value of them. To be honest I have no clue what the Value of them are. So i decided that the best plan of attack would be an auction to see what the true value is. I've disclosed what my proceeds of the auction of the domains would be and I have bid on them. Alright, but that was just one bank, you also do business with BOA, have they given you problems? |
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I have tried a couple times now to get a response from fastcash4bitcoins and they have not responded, should change their name to fastcash4bitcoinswhenwegetaroundtoit
When and how have you contacted us multiple times? through email, once about 6 months ago to buy coins, once again recently to sell coin (i was asking about how you price your silver). |
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I have tried a couple times now to get a response from fastcash4bitcoins and they have not responded, should change their name to fastcash4bitcoinswhenwegetaroundtoit
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Wait, why would you shut down just because one bank didnt like your business? Could you please clarify what problem the bank had, they shouldnt of even known what you were doing since you would have been withdrawing cash and accepting coin which would be a completely transparent process to them. And even if you are transferring ownership to your partner, why are you selling off your domains? Why not just let him take over?
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How to raise the most amount of fees is really an interesting question.
The need to raise enough fees to incentivize enough miners to protect the network is clear. The question then is, do we raise more fees by restricting the number of transactions and bidding up the cost of each transaction, or by opening up the the number of transactions to near limitless and thus having more, but smaller fees per transaction?
It's sort of like the long debated question by politicians. Do they generate more revenue by raising taxes or lowering them?
I'm sure the answer is something similar to a bell curve.
As gmaxwell alluded to earlier, being stuck at the current limit isn't the answer, and neither is allowing infinite block sizes. There needs to be an algorithm that equitably adjusts the rate of increase of block sizes. I think that would be a much more worthwhile debate than banging our heads against the wall worrying about what constitutes spam and what doesn't.
Actually it's pretty simple. Adjust the block size to allow for a steady 10% bandwidth use of the average broadband speed across all major countries: http://www.netindex.com/download/allcountries/Which right now would be about 1Mbit/s, which approximately translates into 100MB blocks. A 1Mbps connection is barely viable for mining 1MB blocks. You would spend >3% of your time downloading/uploading blocks. At 30MB blocks, you will spend ~100% of your time downloading and uploading your block, forget mining. To mine, you want to keep your time waste in block propogation to a minimum. If you are aiming for <1%, you need to be able to download and upload blocks within 6s. Queue? |
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Why does it take so long?
Difficulty is automatically adjusted every 2016 blocks to target a block solve every 10 minutes. Edit: That doesn't seem too long. Lets say bitcoin becomes adopted by physical retail stores and POS terminals for them are made, would you wait 10 minutes at the register? What exactly is keeping transactions from being processed in seconds? Is it a computational impossibility or a self imposed one? |
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Why does it take so long?
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