Beware: Freicoin users taking over for pump & dump

[Impaler]

There will always be terms, but to be frank, your terms on FRC is just ridiculous. Can't wait to see it die as it's not gonna last anything since coins will expire. It's a coin with no value, so sellers will end up losing money and leaving buyers on the winning side. This is just a scam. What it really is a scam bomb ticking and ticking and will explode once all the coins expire.

Simran you seem to be under the impression that monetary base will shrink and eventually disappear completely, this is incorrect.   Under Freicioin protocol monetary base is entirely stable after the initial issuance is complete (~3 years).  From that point on system wide demurrage will be exactly offset by newly mined coins resulting in no change in the total coin base.

[scrybe]

There will always be terms, but to be frank, your terms on FRC is just ridiculous. Can't wait to see it die as it's not gonna last anything since coins will expire. It's a coin with no value, so sellers will end up losing money and leaving buyers on the winning side. This is just a scam. What it really is a scam bomb ticking and ticking and will explode once all the coins expire.

This is your opinion and you can vote with your feet (or coins) by staying away and not accepting FRC for transactions. Please be certain, I'm not calling your judgement on this into question, or your right to form your own opinion. I'm mostly in interested observer mode myself with a medium sized stake of early coins that will take a long time to evaporate.

Calling it a scam is a bit early I think, so far the actions of the developers have been above board, and I read maaku as a "True Believer" which means that we should see him crack before he breaks (IMHO, based personal experience with the type.) In fact we are likely to see him ride it into the ground and for a year or 2 after that if it fails.

The other thing to realize is that the coins don't go away. No outputs are ever removed from circulation. Instead the prorate demurrage is applied (at 4.89% per year) based on the blockheight of the current and last transaction. This means that if I hold FRC for a day I lose ~.01337% (FYI, I used continual compounding, I think the 1337 is a coincidence not by design) or 0.1337 FRC per 1000 FRC. Even after a year I've lost less than 50 FRC/1000. So not exactly a drastic threat if you hold some FRC for a bit.

What it all comes down to is the same phrase we use about Bitcoin all the time "it has no inherent value," it requires a user base to build the value based upon how the user base wants/needs to use the currency.

[ElectricMucus]

There will always be terms, but to be frank, your terms on FRC is just ridiculous. Can't wait to see it die as it's not gonna last anything since coins will expire. It's a coin with no value, so sellers will end up losing money and leaving buyers on the winning side. This is just a scam. What it really is a scam bomb ticking and ticking and will explode once all the coins expire.

Simran you seem to be under the impression that monetary base will shrink and eventually disappear completely, this is incorrect.   Under Freicioin protocol monetary base is entirely stable after the initial issuance is complete (~3 years).  From that point on system wide demurrage will be exactly offset by newly mined coins resulting in no change in the total coin base.

You seem to be under the impression that we do not understand exponential decay. Of course the currency will never go away. But that's also the reason why the freicoin foundation subsidy is such a bad idea.
They (or the people who were sponsored by them) would be in control of the majority of the currency for a long time (over a decade).

If FRC were implemented without any unnecessary centralization there wouldn't be that much opposition, and certainly not from me.

[scrybe]

The only thing that has to be agreed upon is to work together. If you do not understand that it's really better you put me on ignore.
Please do, again you are not "invited" anyway.

I only asked you not to be insulting, you can be as wrong as you like. I love a good spirited debate, but not a debate with someone who has had too many good spirits.

So your governance model is "let the community vote on every little thing?" That's nice for you, let me know how that goes. Hopefully it will only take a couple years to get a basic outline together, and another couple to build a consensus.

You have still managed to avoid most of my questions, one I really am interested in your answer on is "Why does money need to store value over the long term?"

I'm actually kind of amazed that you will abuse folks like this and then talk about community. At this rate, you are not going to have a lot of friends left by the time you get anything accomplished.

I'll check back in tomorrow to see if there is an interesting conversation in this thread, but I'm not holding my breath.

Happy New Year!

[scrybe]

You seem to be under the impression that we do not understand exponential decay. Of course the currency will never go away. But that's also the reason why the freicoin foundation subsidy is such a bad idea.
They (or the people who were sponsored by them) would be in control of the majority of the currency for a long time (over a decade).

If FRC were implemented without any unnecessary centralization there wouldn't be that much opposition, and certainly not from me.

WTF? 3 years!!!!! not "over a decade"

We covered this yesterday.

Are you purposefully spreading misinformation?

The test on what to be with FRC will be what happens afterwards. I am not particulary fond of it because of the 80% premine which still gonna be 40% after 15 years.

Are you sure about that? I thought the 80% coins (80M) for the Foundation was fully funded in the first 3 coin-years, not over the whole distribution lifetime.

Checking on IRC...

Well again, that it is supposed to be distributed changes nothing. They could spent all the premine as "bounties" within a month and it will still be essentially cronie capitalism.
The premine is totally unnecessary. We demonstrated proposals where the entirety of the currency could be distributed in a decentalized manner within weeks, but they not gonna do it.

People always have to learn it the hard way, why be honest when you could rip somebody off?

I'm not sure what point you think I was trying to make, I was just pointing out the egregious factual error that you were spreading. Agree or disagree, the coins have to get out there somehow, and it seems that there was more than enough weight against "just another miner coin" (pun intended) distribution model.

[16:30] <maaku> scrybe: yes
[16:31] <maaku> there are 320 foundation addresses, rotated every 504 blocks
[16:31] <maaku> 504*320 = 161280 blocks = 160 weeks of block time = approx 3 years
[16:32] <maaku> after that, the the foundation split disappears and it's 100% miner subsidy

So after about 3 years the foundation has all the FRC it's ever going to get from the direct subsidy. If you want to keep it honest I'm sure that the foundation could use a volunteer watchdog to police actual execution to plan on grants, but it sounds like you have already passed judgement.

To my knowledge nobody has ever really tried to build a functional non-profit to handle a grant proposal/review model to distribute coins.

They have a high bar to get over, but personally I don't think it's hopeless. It's certainly going to be worth a bucket of popcoin!

[ElectricMucus]

Actually the only thing that really needs to be established beforehand is a percentage. The one necessary to form a ruling consensus.
I think I gonna go for the golden ratio of the total hashing power.  

[ElectricMucus]

You seem to be under the impression that we do not understand exponential decay. Of course the currency will never go away. But that's also the reason why the freicoin foundation subsidy is such a bad idea.
They (or the people who were sponsored by them) would be in control of the majority of the currency for a long time (over a decade).

If FRC were implemented without any unnecessary centralization there wouldn't be that much opposition, and certainly not from me.

WTF? 3 years!!!!! not "over a decade"

We covered this yesterday.

Are you purposefully spreading misinformation?

Are you?
Three years is the amount of time the foundation subsidy gonna accumulate. The half-life of the accumulated amount is significantly longer than that.

[scrybe]

You seem to be under the impression that we do not understand exponential decay. Of course the currency will never go away. But that's also the reason why the freicoin foundation subsidy is such a bad idea.
They (or the people who were sponsored by them) would be in control of the majority of the currency for a long time (over a decade).

If FRC were implemented without any unnecessary centralization there wouldn't be that much opposition, and certainly not from me.

WTF? 3 years!!!!! not "over a decade"

We covered this yesterday.

Are you purposefully spreading misinformation?

Are you?
Three years is the amount of time the foundation subsidy gonna accumulate. The half-life of the accumulated amount is significantly longer than that.

I see, you are implying that the folks that get the FRC from the foundation will be holding the coins until they evaporate? You are getting too far ahead of reality, there is no sign that the foundation will be interested in giving coins to folks that just hold the coins as they evaporate, they could require 100% disbursement within a 1 year timeframe of granting and your "over a decade" would be dead wrong. There are a number of scenarios that allow the foundation to do it's job and close down (or revert to a booster club) in less than 5 years.

You don't know for sure how long the coins will be out there, and who will hold them. Even claiming that there will be an effect of "over a decade" is a bit specious given the desire for very high liquidity for the coinbase.

L8er H8er

[ElectricMucus]

You seem to be under the impression that we do not understand exponential decay. Of course the currency will never go away. But that's also the reason why the freicoin foundation subsidy is such a bad idea.
They (or the people who were sponsored by them) would be in control of the majority of the currency for a long time (over a decade).

If FRC were implemented without any unnecessary centralization there wouldn't be that much opposition, and certainly not from me.

WTF? 3 years!!!!! not "over a decade"

We covered this yesterday.

Are you purposefully spreading misinformation?

Are you?
Three years is the amount of time the foundation subsidy gonna accumulate. The half-life of the accumulated amount is significantly longer than that.

I see, you are implying that the folks that get the FRC from the foundation will be holding the coins until they evaporate?

I'm not.

I'm saying that they are cronies and as such give em to other cronies.

[scrybe]

I'm saying that they are cronies and as such give em to other cronies.

http://www.thefreedictionary.com/cronies

So they give them to friends, what's wrong with that? I've been assuming that you are attempting to hang the typical negative connotation on that word, but if I remove my preconception your description sounds pretty good.

Are you trying to get them to setup a "greenfield" social network of freicoin users instead of chasing a community with a common interest?

If they give all the coins to their friends, and then they pump/dump they are screwing their friends.

So which is it? Are they doing a pump/dump (where they should gather in as many non-cronies as possible to dupe) or are they conspiring to keep their marbles to themselves? If it really is the latter, why do you care?

Also, what do you think is the "right" way to distribute coins?

[Deprived]

What puzzles me is how freicoin is ever expected to take off and gain a wide user-base.

It's intentionally designed to discourage hoarding/saving.  But it's not as though there aren't other currencies which can be used to hoard/save.  So it won't discourage hoarding/saving - it'll just force people to use a different currency (e.g. BTC) to do their hoarding/saving in.

Of itself that's not a problem - except WHAT is meant to encourage people to then convert back to FC to actually trade?

Is it cheaper to use for trading?  Not very likely if you have to convert to and from it before and after trading.

Is it easier to use for trading?  Doesn't seem likely - as it's pretty much (correct me if I'm wrong) based on BTC, so isn't going to be offering any great usabaility benefits.  And it has an inherent disadvantage when it comes to ease of use - that if you want to buy something for 1000 FC you need to actually acquire slightly over 1000 FC.

Are there some really great things than can ONLY be bought with FC?  Not that I've noticed.

So it seems to be that for the majority of people there's just going to be no incentive to ever use FC for transacting - and a big disincentive to use it for saving.  What other use does it have?

It may be good for miners - until they find noone else uses it so they can't sell it.  And true-believers will obviously stick with it to the bitter end.  But that's likely not enough big enough base to build a thriving currency on long-term.

The only scenario in which I can see it doing well is if it manages to steadily gain in price vs BTC (through speculation(.  And at that point it's failed as an experiment anyway - as it's turned into a good store of value and the whole demurrage experiment has failed to deliver its stated objective.

IF FC were the ONLY viable crypto-currency then maybe it could work - but with non-demurrage alternatives available it just hasn't got any way to make people spend rather than save.  All it can do is force people not to use it (save in BTC or whatever) - and condemn itself to a slow death.  If the only people with FC are ones who want to spend their FC (the ones who don't want to spend not using it) then there's noone buying them.  If there weren't alternatives then some people would have to accept the price of demurrage to save - but as there ARE alternatives those people will just use the alternatives, leaving noone who wants to accept FC as they have noone they can reliably pass it on to (or echange it to fiat/BTC with to pay bills that can't be paid in FC).

[scrybe]

What puzzles me is how freicoin is ever expected to take off and gain a wide user-base.

You are 100% correct, they have a huge challenge in finding a use case.

Honestly this is one reason I'm defending their decision to distribute a large number of coins through a grant system. I can think of several uses like rewards-points that work if you have a large initial supply to give out promotionally, and if they are never used the value will slowly seep back in. One key to long term success will be to either have the project mine themselves, or cater in some way to the mining community to get the mining proceeds back into the non-mining community.

It's the same problem as coinage in England during the Industrial Revolution. Coins flowed to London and stayed there, and the country as a whole was suffering a lack of small change that resulted in private local currencies that pick up the slack. Currencies are mostly local in some way, I think FRC and other bitcoin forks are going to get drawn to a locality (either physical or online community type) or more and more localities will create their own cryptocurrancies. I don't think we are going to see a few BTC clones, I think we are going to see thousands of coins/notes/certificates/coupons/shares of every description.

[Deprived]

What puzzles me is how freicoin is ever expected to take off and gain a wide user-base.

You are 100% correct, they have a huge challenge in finding a use case.

Honestly this is one reason I'm defending their decision to distribute a large number of coins through a grant system. I can think of several uses like rewards-points that work if you have a large initial supply to give out promotionally, and if they are never used the value will slowly seep back in. One key to long term success will be to either have the project mine themselves, or cater in some way to the mining community to get the mining proceeds back into the non-mining community.

It's the same problem as coinage in England during the Industrial Revolution. Coins flowed to London and stayed there, and the country as a whole was suffering a lack of small change that resulted in private local currencies that pick up the slack. Currencies are mostly local in some way, I think FRC and other bitcoin forks are going to get drawn to a locality (either physical or online community type) or more and more localities will create their own cryptocurrancies. I don't think we are going to see a few BTC clones, I think we are going to see thousands of coins/notes/certificates/coupons/shares of every description.

I tend to agree that the grant system makes some sense given the barriers they otherwise face in getting people to actually use the coins.  But the grant system kind of makes using bitcoin a strange choice.  The usability issues in bitcoin are largely due to requirements imposed by being decentralised (e.g. waiting for confirmations, when a centralised system can immediately confirm).  By having a large number of coins centrally controlled there's no way some of the main benefits of decentralisation can be achieved - everyone HAS to trust the body controlling those coins.  So that body may as well be an issuing authority as well.  But I guess miners etc aren't willing to pay fiat to buy coins from a central body - but will happily pay fiat for electricity and hardware to mine them for 'free' whilst a central body owns and controls a large chunk of extant coins without having 'paid' for them.

I do agree that we'll likely see thousands of different BTC-type block-chains for all manner of purposes.  Well - we may not actually SEE them - as a lot will be for specific purposes only of interest to a very small group of people who want to track some specific right/ownership/entitlement in a semi-anonymous way without a central point of failure.