Alternative Currency Idea / Suggestion

[Zas]

Hi folks Zas here, rather new to the board, lurker of the Alternative Cyptocurrency board. Yet I'm not allowed to post there or even access this from tor *growl*.  Never mind.

Anyway, if I mod wouldn't mind moving this thread to the relevant board it would be very much appreciated.

Bitcoin as far as I can tell, aims to have a deflationary measure to its system and this is certainly one valid economic approach however it doesn't really engender the idea of a currency because more people are likely to hoard it...at least until it crashes again. Bitcoin is effectively capitalism...probably at its best to be perfectly honest. However these boom and busts can be...minimized.

Lots of people when trying to get into a currency try to mine their own currency and find themselves being vastly short circuited, either by extreme difficulty levels or people with a helluva lot of processing power trying to be greedy rather than actually trying to benefit a currency. My solution then...or at least my idea is the following.

Change the difficulty based on rate of transactions. While there are more transactions increase the rate of difficulty proportionately. While there are less transactions decrease the rate of difficulty proportionately.

That doesn't mean there isn't or shouldn't be a 'cap' to stick to in general. For instance an arbitrary cap could be set at say 3m coins. If these coins are not in circulation; yet there are increasing number of transactions, then supply more coins up to the number. If there are more coins than this cap in circulation, then increase the difficulty until sufficient coins are lost/destroyed back down below the limit. Its possible that someone could hoard a lot of currency and then try to flood the market...but all that doesn't give any effect other than what is already available in bitcoin. Basically, during the times when people are hoarding coins, then miners with lower end computers would be more encouraged to take part which increases the 'pool' size of people playing the game and during the times when people are spending, the value would rise because they're more difficult to mine.

...Anyone want to have a shot?

If there's a coin just like that, please feel free to send me a link!

Edit: I wonder if there's a way to limit the rate at which a machine/ip/node can mine? Thereby making it more tricky for much larger machines to crack through a lot of mining. I suspect this would be better managed through a pool of some kind where larger machines can be encouraged to tackle the times when the difficulty is much harder and leave the CPU's to deal with the easier blocks.

[Zas]

The problem is not necessarily in hoarding or saving but that at the moment Bitcoin isn't treated as a currency it's a commodity. Bitcoin saves its own hide by being divisible...although there's an end point in that (even though the designer built stuff to prolong Bitcoin), however Bitcoin is inherently deflationary, which increases speculation. Speculation in my book (on large scale of course) is bad for bitcoin. people will simply get bitcoins...save them for say a year...cash out later. Too many people start doing that, the coin crashes and deeply. This isn't necessarily bad... it's just rather unstable, it's also a unique selling point for bitcoin. What my suggestion aims to do is to keep the amount of coins in circulation stable.

Now as for slowing down transaction times... I'd recommend that transaction fees be kept for those that are willing to process and add to blocks, perhaps this is something that those with larger computers can be encouraged to undertake instead of mining.

I completely agree with you about inflation but my aim is 0%, neither inflationary nor deflationary and slowing down dramatically towards the end. Much like bitcoin's curve, except instead of the graph being 'Total coins' it'd be Coins in circulation. Obviously though I agree with objectives about investments.

Could you explain Chasseresse because I have no clue what you're talking about >.<; If it's a coin I can't find it.

[Zas]

Hm, that's also a valid point, there's also the people that would 'mine' a coin and then store it which would be a flaw in the design unless once a block was created, that means that it has at least one entry as being in circulation. Of course, the point is that the situation wouldn't be a whole lot different. Bitcoin is doing very well, but I do think there are areas in which it can be improved. Of course, as an alt currency, I think my suggestion would be more stable and therefore easier to exchange at reasonably stable (or at least more stable) prices that Bitcoin as it currently stands.

Oh...one final suggestion. It should work on Linux by default! I'm not sure why everyone is so 'windows' happy. They want a decentralized currency yet a centralized operating system. XD

Ah, nope I'm not Chasseresse >.<;