Stabilized Bitcoin using eMunie economics

[CIYAM]

My problem is discovering a method that limits manipulative opportunities while still allowing the market to speak as a whole...and I believe the above does so.

We'll see - there are very many talented minds in China that have failed to be able to stop this "slow train-wreck" which you seem to think your system will solve.

Why not offer your services to them (am sure they'd pay you a few billion RMB if you could solve their financial woes with it)?

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[Fuserleer]

creating supply.. hmm
so this is not bitcoin at all and nothing to do with making bitcoin stable, and more so to control volatility of an altcoin you create.
ok got it.

so when there is demand, you create new supply.. ok well your altcoin is now not deflationary but just another fiat emulator. and has lost its purpose as a competitor to bitcoin.

though maybe using some technologies of blockchain i presume, it wont be a replacement of bitcoin, but more so aimed at updating the fiat system

im sure a government may adopt your EMU coins as a national currency(maybe). where supply is no longer created via credit agreements, but instead the demand the population.

Well if you re-read the original post, you'll see that I did not run the simulation with the elastic supply enabled, but with the emission algorithm as defined by Satoshi

So in fact this test was a very close simulation of attempting Bitcoin stability as the supply is not modified in any way other than diverting some of it to fund the buffer, and the overall emission follows Bitcoin exactly.

[Fuserleer]

My problem is discovering a method that limits manipulative opportunities while still allowing the market to speak as a whole...and I believe the above does so.

We'll see - there are very many talented minds in China that have failed to be able to stop this "slow train-wreck" which you seem to think your system will solve.

Why not offer your services to them (am sure they'd pay you a few billion RMB if you could solve their financial woes with it)?

You don't need many, you need just one of them to discover the solution.

[Peachy]

As for China's RMB, they really didn't start allowing it to quasi-float vs. the $ till around 2011.

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Currency&symb=usdcny&x=37&y=9&time=20&startdate=1%2F4%2F1999&enddate=2%2F9%2F2016&freq=3&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=5&maval=9&uf=0&lf=268435456&lf2=2&lf3=4&type=4&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11

The issue with them attempting (and failing) to control a soft landing in the stock market is a different matter than their capital controls they use in an attempt to protect their stock exchanges.  

These stock market operations are similar to those used by many US exchanges as well  http://www.nasdaqtrader.com/trader.aspx?id=CircuitBreaker.  Not exactly relevant to the discussion of our economics model as there is no autonomous entity within these exchanges serving to smooth out the volatility.

[CIYAM]

Not exactly relevant to the discussion of our economics model as there is no autonomous entity within these exchanges serving to smooth out the volatility.

Huh?

You don't think that it is software that decides to stop the trading?
(the software might get its orders from the government but I am pretty certain that the actual decision to stop the trading is done by software)

[CIYAM]

You don't need many, you need just one of them to discover the solution.

Well - again - if you have done that then please give that solution to every major government in the world and collect your Nobel award (otherwise I guess we should blame you for the next GFC).

[Fuserleer]

You don't need many, you need just one of them to discover the solution.

Well - again - if you have done that then please give that solution to every major government in the world and collect your Nobel award (otherwise I guess we should blame you for the next GFC).

Sensing some animosity here to be honest.

I'm here because I'd like comments on the idea as a whole, positive and negative, things that could maybe be improved, structured reasoning why it might not work (despite the test data results that suggests the contrary).

Not just a "It won't work" and "GTFO and collect your award if you're so smart"

No one knows if it will work or not, no one has tried it before, so perhaps it should be given a little more thought before putting it in the "not Bitcoin, not Blockchain" trashcan

[Anima]

Not exactly relevant to the discussion of our economics model as there is no autonomous entity within these exchanges serving to smooth out the volatility.

Huh?

You don't think that it is software that decides to stop the trading?
(the software might get its orders from the government but I am pretty certain that the actual decision to stop the trading is done by software)

Stopping trades for a short time does little to smooth out movements. It only prolongs them to when the exchange reopens. Our stability mech. allows continuous operation.  

[CIYAM]

Sensing some animosity here to be honest.

The grandiose claims made by so many of these crypto projects have basically not happened (beyond Bitcoin itself) so I don't mind to be portrayed as "suspicious" (but I am not being angry nor rude so I don't know why you pick the word "animosity").

The very fact that you would label someone just questioning things as "animosity" itself is curious.

Also the fact that you haven't called out @CfB for "trinary logic" is rather surprising to myself (do really think that there is any point to it?).

[Peachy]

Basically, think of the eMunie system as you would the IMF SDRs http://www.investopedia.com/terms/s/sdr.asp

However, instead of a highly-bureaucratic and political system that attempts to manage supply based on having access to imperfect information from the delayed signals in collecting, generating and distributing reports (much like the FED) and that is only accessible for use by government entities, you could have a system that autonomously identifies supply/demand in near real-time and is able to be used by all Joes/Janes alike.

And if inflation (ie. new supply) is distributed equitably and fairly across all users based on their existing holdings then the net effect on them is zero.  

There are, and have always been, 2 variables in the value equation:  Price and Qty.  While btc and nearly all solutions focus solely on a variable Price model, this isn't the only one available.  I'm guessing the reasons there has only been a focus on price variability and fixed(relative) quantity is that we have only known of one way to manage the quantity variable:  central government entities (e.g. Fed Reserve).  

However, it should be self evident above based on the initial post that there is another alternative that did not exist prior to when centrally managed govt entities were established.

[CIYAM]

And if inflation (ie. new supply) is distributed equitably and fairly across all users based on their existing holdings then the net effect on them is zero.  

Again - you are assuming that anyone actually "wants" the supply (if they don't it is just some worthless thing being created).

This is very much what BitShares says about their stuff (and it all strikes me as being rather circular logic).

[Fuserleer]

Sensing some animosity here to be honest.

The grandiose claims made by so many of these crypto projects have basically not happened (beyond Bitcoin itself) so I don't mind to be portrayed as "suspicious".

Most of those claims are a post on some forum and nothing more comes of it.

I'm presenting a real test that I did, with result data that I can provide.  That's not so grandiose anymore as I've done what I said I would, and I'm simply looking for verification with an open mind.

I don't think I've ever got a structured, well formed, detailed critique to anything I've ever posted on this forum, and that's simply all I'm asking for.  Perhaps I should stop trying.

If I've missed something, then the aforementioned would allow me to pinpoint it...being told "it won't work because of China" doesn't help me to highlight where I may have gone wrong, or even to allow me to provide a critical argument in return.

[CIYAM]

If I've missed something, then the aforementioned would allow me to pinpoint it...being told "it won't work because of China" doesn't help me to highlight where I may have gone wrong, or even to allow me to provide a critical argument in return.

You can easily create back-dated models for trading that work perfectly on history but will fail after they work live so it isn't a valid test.

(anyone who does automated trading knows this)

[Fuserleer]

And if inflation (ie. new supply) is distributed equitably and fairly across all users based on their existing holdings then the net effect on them is zero.  

Again - you are assuming that anyone actually "wants" the supply (if they don't it is just some worthless thing being created).

This is very much what BitShares says about their stuff (and it all strikes me as being rather circular logic).

Should the price be rising because there isn't enough supply in circulation to meet demand, then it is safe to assume that it is wanted.

If you want to talk about assumptions, Satoshi assumed that someone somewhere would want 50 BTC every 10 minutes, regardless if they did or not.

I know, you'll state that the act of mining suggests that someone wanted them otherwise they wouldn't expend the resources to get them....sure ok, the act of posting trades with buy prices higher than the current suggests the exact same thing.

[Fuserleer]

If I've missed something, then the aforementioned would allow me to pinpoint it...being told "it won't work because of China" doesn't help me to highlight where I may have gone wrong, or even to allow me to provide a critical argument in return.

You can easily create back-dated models for trading that work perfectly on history but will fail after they work live so it isn't a valid test.

(anyone who does automated trading knows this)

And what about back-dated models for trading that work perfectly in BOTH environments?  Because the model is actually sound.

[franky1]

Well if you re-read the original post, you'll see that I did not run the simulation with the elastic supply enabled, but with the emission algorithm as defined by Satoshi

So in fact this test was a very close simulation of attempting Bitcoin stability as the supply is not modified in any way other than diverting some of it to fund the buffer, and the overall emission follows Bitcoin exactly.

well if you are not creating the supply when emulating the bitcoin historic data. then your results would fail because the historic data would be void once you start playing with orders (butterfly effect)

you cant change orders and think that the future demand/supply and orders would still exist. so im still wondering why you would think that bitcoin would be stable based on your use of irrelevant historic data.

anything after the first day of daytrading in 2011 becomes a new dimension and no longer part of historic data.

people who cant get their orders processed because your system cant find a counter order to match. would cause people to withdraw funds(affecting your buffer) or they would change their order price(affecting history and demand). which as i say makes history change. and no longer relevant to use any further data from the next days data, as it would be invalid and not the same.

or more concisely put

You can easily create back-dated models for trading that work perfectly on history but will fail after they work live so it isn't a valid test.

(anyone who does automated trading knows this)

EG.
if you changed the winter 2013 spike of $1000 so that it stayed around the $100 level. lots of people would withdraw from your system(buffer supply dries up) to sell coins privately on other exchanges. which would mean that your exchange is then lacking supply and stuck at a false price of $100 with no resistance or no demand to sell.. what would then happen is lots of dollar holders throwing in more dollars to buy your limite supply of cheap coins that are left(by those stupid enough to not withdraw) thus they would lose out selling too cheap and the buyers would get cheap coins to then arbitrage until all supply buffer is gone.

leaving your system in a totally different dimension of value than other exchanges.

the only way your system would work is if you were the only exchange and no one had any other means of exchanging away from your system.

and so i think your system would be more suited to the fiat controlled and centralised economy. and not so much to manipulate bitcoin at the expense of people who want a true freemarket

[CIYAM]

I know, you'll state that the act of mining suggests that someone wanted them otherwise they wouldn't expend the resources to get them....sure ok, the act of posting trades with buy prices higher than the current suggests the exact same thing.

Of course - but if they don't post any trades with buy prices higher than the current then the price isn't going to rise.

If panic happens then there is simply no magic that is going to stop a collapse.

[Fuserleer]

If panic happens then there is simply no magic that is going to stop a collapse.

I never said that there was, it its inevitable it will happen.

[CIYAM]

For a start - where is a "professor of economics" that backs your theory?
(presumably you would at least have one)

[spartacusrex]

Keep at it Fuserleer! Always nice to see something new.. 

And if inflation (ie. new supply) is distributed equitably and fairly across all users based on their existing holdings then the net effect on them is zero.   

So - accounts can have the total amount of EMU increased, to ensure that the overall price stays stable ?

I may have 10 EMU, and that is worth $1. But if the price of EMU halves, I will have 20 EMU, but still $1..  (I think ?)

Can you only increase EMU per user, and remove EMU from the Buffer ?

What happens if the Buffer is empty and you still need to remove more coins.. ? (global demurrage ?)