The economic model behind Bitcoin is flawed

[deisik]

Because they would want more coins? If they are worth anything, of course. If they aren't, what's the purpose of your "money" then?

You are missing the point. They can worth some value, but it doesn't mean it's more than you spend to get it. As CPU mining of Bitcoin now.

Okay, you say that mining right now is more expensive in general than the price of the coin, no problem. But what the heck are you doing here advertising new coin if it is not profitable to mine at the moment?

Namely, where is our interest hidden? Why should we care, really?

[z0rg1nc]

Because they would want more coins? If they are worth anything, of course. If they aren't, what's the purpose of your "money" then?

You are missing the point. They can worth some value, but it doesn't mean it's more than you spend to get it. As CPU mining of Bitcoin now.

Okay, you say that mining right now is more expensive than the price of the coin, no problem. But what the heck are you doing here advertising new coin if it is not profitable to mine at the moment?

Namely, where is our interest hidden?

Right now it's still profitable, as price up from 100btm/0.001 btc to 4000 now (we got public on bTalk 8 nov), but it's not for a long time. I ever thought money is for trading, not for mining. We have instant (10-20s due to i2p) transactions, low fees, easy integration. We never advertise investing\saving as primary target, but it's really useful as microtransactions tool.

Our interest is not hidden - we can print the money as it's our system.

[deisik]

Okay, you say that mining right now is more expensive than the price of the coin, no problem. But what the heck are you doing here advertising new coin if it is not profitable to mine at the moment?

Namely, where is our interest hidden?

Right now it's still profitable, as price up from 100btm/0.001 btc to 4000 now (we got public on bTalk 8 nov). I ever thought money is for trading, not for mining. We have instant (10-20s due to i2p) transactions, low fees, easy integration. We never advertise investing\saving as primary target, but it's really useful as microtransactions tool

I agree with that, but, look, if mining is still profitable, people will be mining the coin just for the purpose of converting it into fiat (BTC) later. When it finally becomes unprofitable to mine new coins, you are stuck with a shitload on new coins that nobody cares for...

Until it somehow becomes profitable to mine again, of course

Our interest is not hidden - we can print the money as it's our system.

I meant our interest, that of users, not yours (as an entity behind this coin)

[z0rg1nc]

Okay, you say that mining right now is more expensive than the price of the coin, no problem. But what the heck are you doing here advertising new coin if it is not profitable to mine at the moment?

Namely, where is our interest hidden?

Right now it's still profitable, as price up from 100btm/0.001 btc to 4000 now (we got public on bTalk 8 nov). I ever thought money is for trading, not for mining. We have instant (10-20s due to i2p) transactions, low fees, easy integration. We never advertise investing\saving as primary target, but it's really useful as microtransactions tool

I agree with that, but, look, if mining is still profitable, people will be mining the coin just for the purpose of converting it into fiat (BTC) later. When it finally becomes unprofitable to mine new coins, you are stuck with a shitload on new coins that nobody cares for...

Our interest is not hidden - we can print the money as it's our system.

I meant our interest, that of users, not yours (as an entity behind this coin)

Ah, read as "yours" (usually it's the first question sry).
I guess most interested are site\service owners, as they will be able to accept some funds, and users gets after them. We'll have some end-user oriented services but it will be later.

About stuck - user can buy our currency for BTC or selling some service\goods and so on. Due to exchange fees it will be ever easier to mine 1 coin than buy in somewhere so playing with any self regulations system (as our forum take a look) will work still. But generally without real life usage we are in trouble yep.

[deisik]

Ah, read as "yours" (usually it's the first question sry).
I guess most interested are site\service owners, as they will be able to accept some funds, and users gets after them. We'll have some end-user oriented services but it will be later.

If I got your point correctly, you are waiting when it becomes unprofitable to mine any more (i.e. after the pump-and-dump stage is over), and accept this coin as a payment for "some end-user oriented services" of yours, right?

Now it is time to actually ask what is your interest, since you will essentially be offering services for free

[z0rg1nc]

Ah, read as "yours" (usually it's the first question sry).
I guess most interested are site\service owners, as they will be able to accept some funds, and users gets after them. We'll have some end-user oriented services but it will be later.

If I got your point correctly, you are waiting when it becomes unprofitable to mine any more (i.e. after the pump-and-dump stage is over), and accept this coin as a payment for "some end-user oriented services" of yours, right?

Now it is time to actually ask what is your interest, since you will essentially be offering services for free

There has not been "pump" and will not be by design, that end-user services will not be soon. I'm waiting some integration review now to understand api design flaws It's useful already without any additions for "look previous post" guys. Like spam protection systems etc.

Services are not for free just for our currency. I din't understand the part about my interest. In the future it'll look like "tax" for miners i guess.

[deisik]

Ah, read as "yours" (usually it's the first question sry).
I guess most interested are site\service owners, as they will be able to accept some funds, and users gets after them. We'll have some end-user oriented services but it will be later.

If I got your point correctly, you are waiting when it becomes unprofitable to mine any more (i.e. after the pump-and-dump stage is over), and accept this coin as a payment for "some end-user oriented services" of yours, right?

Now it is time to actually ask what is your interest, since you will essentially be offering services for free

There has not been "pump" and that end-used services will not be soon. I'm waiting some integration review now to understand api design flaws It's useful already without any additions for "look previous post" guys. Like spam protection systems etc.

Services are not for free just for our currency.

That's what I meant exactly, since your currency will be worth next to nothing (after it becomes too expensive to mine it, i.e. not worth it). Why all the fuss with a new monie if you could just accept fiat for your future "services" and be done with that?

If they would be really worth it, of course

[z0rg1nc]

That's what I meant exactly, since your currency will be worth next to nothing (after it becomes too expensive to mine it). Why all the fuss with new monie if you could just accept fiat for your future "services"...

If they would be worthy, of course

Understood.

1. We don't want to depend on fiat payment systems (additional costs in many ways).
2. We don't want to be based on BTC because the whole thread above about money supply etc. Bitcoin price looks unstable (and it still is by design). Own emission scheme looked the best choice (as concept by itself and as part of some technical details like ddos protection servers). There is a question about convenient exchange but it'll be solved in the future.

[deisik]

That's what I meant exactly, since your currency will be worth next to nothing (after it becomes too expensive to mine it). Why all the fuss with new monie if you could just accept fiat for your future "services"...

If they would be worthy, of course

Understood.

1. We don't want to depend on fiat payment systems (additional costs in many ways).
2. We don't want to be based on BTC because the whole thread above about money supply etc. Bitcoin price looks unstable (and it still is by design). Own emission scheme looked the best choice (as concept by itself too). There is a question about convenient exchange but it'll be solved in the future.

Furthermore, if you decide to set the price for your services in your currency high enough (so as to at least cover your expenses) given the settled market exchange rate for your coin, you will be losing anyway. Why? Because the profitability of mining is essentially limited by the cost of electricity, while your costs (not even speaking about profits) will obviously be higher than the cost of electricity (since they most likely will include it plus a lot of additional expenses)...

So whatever price tag you set for your services, you will be heavily losing as compared to just selling them directly for fiat

[z0rg1nc]

Furthermore, if you decide to set the price for your services in your currency high enough (so as to at least cover your expenses) given the settled market exchange rate for your coin, you will be losing anyway. Why? Because the profitability of mining is essentially limited by the cost of electricity, while your costs (not even speaking about profits) will obviously be higher than the cost of electricity (since they most likely will include it plus a lot of additional expenses)...

So whatever price tag you set for your services, you will be heavily losing as compared to just selling them directly for fiat

As i understand you right... It's the question about market liquidity. The more services will use the currency the more we can sell on exchange without significant price change. There is no profit now yep, just fun .

[deisik]

Furthermore, if you decide to set the price for your services in your currency high enough (so as to at least cover your expenses) given the settled market exchange rate for your coin, you will be losing anyway. Why? Because the profitability of mining is essentially limited by the cost of electricity, while your costs (not even speaking about profits) will obviously be higher than the cost of electricity (since they most likely will include it plus a lot of additional expenses)...

So whatever price tag you set for your services, you will be heavily losing as compared to just selling them directly for fiat

As i understand you right... It's the question about market liquidity. The more services will use the currency the more we can sell on exchange without significant price change. There is no profit now yep, just fun .

Nope... In fact, I assumed that there is already enough liquidity in the market ("given the settled market exchange rate for your coin"). This is a shaky assumption (in reality things would be worse for you), but it was necessary to show why you will most certainly lose profits or just suffer losses even in the case when the exchange rate was fixed. Liquidity won't prevent you from subsidizing your users (if they pay for your services in your coin)...

Unless you cap the amount of coins allowed to be mined, indeed. Otherwise users will steal from you arbitraging the system

[z0rg1nc]

Furthermore, if you decide to set the price for your services in your currency high enough (so as to at least cover your expenses) given the settled market exchange rate for your coin, you will be losing anyway. Why? Because the profitability of mining is essentially limited by the cost of electricity, while your costs (not even speaking about profits) will obviously be higher than the cost of electricity (since they most likely will include it plus a lot of additional expenses)...

So whatever price tag you set for your services, you will be heavily losing as compared to just selling them directly for fiat

As i understand you right... It's the question about market liquidity. The more services will use the currency the more we can sell on exchange without significant price change. There is no profit now yep, just fun .

Nope... In fact, I assumed that there is already enough liquidity in the market ("given the settled market exchange rate for your coin"). This is a shaky assumption (in reality things would be worse for you), but it was necessary to show why you will most certainly lose profits or just suffer losses even in the case when the exchange rate was fixed. Liquidity won't prevent you from subsidizing your users (if they pay for your services in your coin)...

Unless you cap the amount of coins allowed to be mined, indeed. Otherwise users will steal from you arbitraging the system

1. You are right if there would be just we, users and our services (like twitter, dropbox, hosting, etc). But as i said that end-user services aren't primary target, it was just part of the explanation why now it's more interesting for service owners.
2. That services won't be twitter, dropbox, etc things requires data-center.
3. In general there will be still some point where i can get profit anyway (like mining litecoin for example) so the whole assumption is not very solid imho.

[deisik]

1. You are right if there would be just we, users and our services (like twitter, dropbox, hosting, etc). But as i said that end-user services aren't primary target, it was just part of the explanation why now it's more interesting for service owners

But then we are back where we started at, that is, why should we, the adopters, care (after mining is no longer profitable)? Service owners accepting your coin as a means of payment would be in exactly the same situation that I described earlier...

Apparently, they won't let their users steal from them (read take your coin as a means of payment)

[deisik]

3. In general there will be still some point where i can get profit anyway (like mining litecoin for example) so the whole assumption is not very solid imho.

I don't quite understand what you mean. I thought we had already agreed that mining your coin was not profitable due to electricity costs as an initial condition:

If I got your point correctly, you are waiting when it becomes unprofitable to mine any more (i.e. after the pump-and-dump stage is over), and accept this coin as a payment for "some end-user oriented services" of yours, right?

Until then people would just mine it and convert to fiat or Bitcoin

[z0rg1nc]

1. You are right if there would be just we, users and our services (like twitter, dropbox, hosting, etc). But as i said that end-user services aren't primary target, it was just part of the explanation why now it's more interesting for service owners

But then we are back where we started at, that is, why should we, the adopters, care (after mining is no longer profitable)? Service owners accepting your coin as a means of payment would be in exactly the same situation that I described earlier...

Apparently, they won't let their users steal from them (read take your coin as a means of payment)

1. Miners consume more electricity than i am (as i just check tasks solution and they actually find it, it's 2000+ difference at least). If it wasn't clear.
2. They care because that's the way to get some additional profit from their services. Let's take your example. I have the payment system, some service (like twitter with payable tweets and subscriptions) and exchange with BTC and stable exchange rate. Then i just sell twitter service with middleman for BTC. Where they steal from me?

[deisik]

1. You are right if there would be just we, users and our services (like twitter, dropbox, hosting, etc). But as i said that end-user services aren't primary target, it was just part of the explanation why now it's more interesting for service owners

But then we are back where we started at, that is, why should we, the adopters, care (after mining is no longer profitable)? Service owners accepting your coin as a means of payment would be in exactly the same situation that I described earlier...

Apparently, they won't let their users steal from them (read take your coin as a means of payment)

1. Miners consume more electricity than i am (as i just check tasks solution and they actually find it, it's 2000+ difference at least). If it wasn't clear.
2. They care because that's the way to get some additional profit from their services. Let's take your example. I have the payment system, some service (like twitter with payable tweets and subscriptions) and exchange with BTC and stable exchange rate. Then i just sell twitter service with middleman for BTC. Where they steal from me?

I understood neither the first nor the second. How exactly the service providers get additional profit from their services by accepting your coin as a means of payment?

Remember, though, that we are at a stage where it is no longer profitable to mine your coin

[z0rg1nc]

I understood neither the first nor the second. How exactly the service providers get additional profit from their services by accepting your coin as a means of payment?

Remember, that it is no longer profitable to mine your coin

1. It was about your "Because the profitability of mining is essentially limited by the cost of electricity, while your costs (not even speaking about profits) will obviously be higher than the cost of electricity (since they most likely will include it plus a lot of additional expenses)...". There is some misunderstanding i think.
2. They'll get additional profit because it's easier faster and cheaper to accept it so more people will buy something.
3. Again, mine is not the only way to get the currency, you can sell BTC or some service to miners or previous holders. Why unprofitable mine is so important? Bitcoin is not minable for the most but still is useful.

[deisik]

I understood neither the first nor the second. How exactly the service providers get additional profit from their services by accepting your coin as a means of payment?

Remember, that it is no longer profitable to mine your coin

1. It was about your "Because the profitability of mining is essentially limited by the cost of electricity, while your costs (not even speaking about profits) will obviously be higher than the cost of electricity (since they most likely will include it plus a lot of additional expenses)...". There is some misunderstanding i think

I don't know what kind of service you are actually going to provide, but services that don't require a lot of expenses or just popular enough are usually provided for free altogether (like gmail, facebook, whatever). In fact, I was initially assuming that you are going to provide something very original, specific, and expensive (like child pornography, lol) to make use of yet another coin justified. That said, you (and other service providers, for that matter) are still bound by the amount of expenses you (them) may have to bear for their services rendered and the price of electricity (as the decisive factor for mining) that miners would pay for mining your coin in the way I described above...

I hope this clarifies the matter

[deisik]

2. They'll get additional profit because it's easier faster and cheaper to accept it so more people will buy something

Faster and cheaper than what? There are a lot of coins that are fast and cheap aiming at exactly the same as well as being well-established at that (say, Dogecoin). Do the service providers actually use them? I guess, no, at least, not to a significant degree. Even if we take online gambling as one such "service" (though this is a far cry from what you intend your coin for), I can only name bitcoins, litecoins and doges (in a few places) as being actively used...

Why would the things be different for your coin?

[deisik]

3. Again, mine is not the only way to get the currency, you can sell BTC or some service to miners or previous holders. Why unprofitable mine is so important? Bitcoin is not minable for the most but still is useful.

Until then prices (i.e. exchange rate) will be too volatile. Not that I somehow imply that they won't be so (lol) when mining stops being profitable for the majority of miners (see Bitcoin), but the former is a given for a currency that doesn't have limits on the number of coins mined (see Dogecoin). Needless to say that high volatility of a coin is a big no-no for those who are going to trade goods for that coin...

Essentially, the unprofitability of mining sets the cap on the supply of new coins, which should stabilize the price, at least, theoretically, lol