EM Coin

[directedbit]

Guiding principles of EM Coin

Having an even distribution of coins is better.
How?
PoW (scrypt) is used and the coin generation is only very slightly weighted to the early adopters to enable coins to be distributed to 'the masses' rather than a few early adopters or those with specialized hardware

Supply adjusting for demand is better.
How?
The mining reward is a factor of the PoW so if the coins become popular, price goes up, more miners will join, reward will go up, more coins will be introduced introduced stabilizing the price. If the price goes down the opposite will happen

Less centralisation is better.
How?
litecoin PoW used to keep the majority of the mining power away from the centralised groups for as long as possible. Should PoS be used to this end as well?

0 transaction fees are better
How?
Mining reward keeps these unnecessary, possibly a minimal amount could be introduced to keep away 'spammy' transactions if they become a problem

There is enough great work done by many people to enable a coin with these properties to be built with little effort and a meagre amount of skill. The currency would be as close to a boring public utility as possible and not
a speculative instrument to reward early adopters or traders.

Feedback?

[nethead]

The mining reward is a factor of the PoW so if the coins become popular, price goes up, more miners will join, reward will go up, more coins introduced, priced will stay more stable. If the price goes down the opposite will happen

Stoped reading there. Do you even economics?

[directedbit]

I can't quite tell from your bolding which piece you disagree with.

The chain of events

price increase --> mining interest --> increased reward -->  price decrease = more stable currency. Which part is incorrect?

[evilscoop]

I can't quite tell from your bolding which piece you disagree with.

The chain of events

price increase --> mining interest --> increased reward -->  price decrease = more stable currency. Which part is incorrect?

coin becomes worthless

[directedbit]

As the price goes down, the mining will slow, reducing the supply of coins. The aim is to hover around an inflation rate that keeps the price stable but shouldn't necessarily lead to it dropping to 0. I know most other coins are designed on the principle that inflation is terrible but I disagree.

[temor]

I can't quite tell from your bolding which piece you disagree with.

The chain of events

price increase --> mining interest --> increased reward -->  price decrease = more stable currency. Which part is incorrect?

coin becomes worthless

Something that is worthless to begin with can never "become" worthless. It is per definition already worthless.


Also, I don't see the point in every Tom, Dick and Harry coming up with a new coin every day and a half. It's incredibly stupid and pointless to have 10.000 1:1 copies of Bitcoin, Litecoin and PPCoin.

Stahp eet.

[Este Nuno]

I can't quite tell from your bolding which piece you disagree with.

The chain of events

price increase --> mining interest --> increased reward -->  price decrease = more stable currency. Which part is incorrect?

People are misunderstanding you.

Other people:

He's saying that the coin automatically adjusts supply according to the price. Not that when the price goes up the coin reward keeps going up and up.

He's saying when the price becomes too low(low demand), supply decreases with the intention of raising the price. When the price goes up(high demand), supply increases with the intention of lowering the price.

He's trying to create a solution that does not lead to a deflationary spiral. And also adjusting to control for run away inflation. A coin with an algorithm that creates price stability.

I think this is all easier said than done. But if you can do this your currency will be looked up for fondly by mainstream economists. I sincerely wish you luck.

[directedbit]

@Este the idea would be to have the reward be a factor of the mining difficulty. I'm modeling with N^1/2 to make sure Moore's law and  mining improvements don't flood the system too much.  

@Temor - yes the coin borrows heavily from work already done but the properties are significantly different. Bitcoin is a brilliant piece of work but the 21 million limit is considered by many people far smarter than me to be a problem. All other alt-coins I know of have this property or all the coins are controlled by a central group (happy to be corrected as it will save me lot of coding).

[chriswen]

So you're saying that reward is docked to the exchange rate?

[rayt5]

Guiding principles of EM Coin

Supply adjusting for demand is better.
How?
The mining reward is a factor of the PoW so if the coins become popular, price goes up, more miners will join, reward will go up, more coins will be introduced introduced stabilizing the price. If the price goes down the opposite will happen
...

There is enough great work done by many people to enable a coin with these properties to be built with little effort and a meagre amount of skill. The currency would be as close to a boring public utility as possible and not
a speculative instrument to reward early adopters or traders.

Feedback?

I had the same notion and agree with you 100%. The problem: mining difficulty/hashrate is almost certainly a lagging indicator of price, meaning you could very easily cause a drop in price, followed by a further devaluation because you just flooded the market with new coins. If you could come up with a leading indicator of price and tie the reward to that, I think it would be better.

[bnogal]

I would keep the transaction fee in % as an extra way to stabilize it... (with a minimum working always)


This way we have a freicoin without 5 people controlling the 80% of the economy and without complicated algorithms to devalue each block.

And if you wanna complicate it, instead an algorithm, i would think about a neural network or something similar, running in each client than accept some type of options, these options are used to feed data to the neural network. An option should be "user happiness", and one aim should be to keep it over the 50%.

[directedbit]

@rayt5 - thanks for the first constructive criticism of this thread! Yes the difficulty is a lagging signal but I can't think of any predictive ones (if I could I'd be trading bitoins!) The aim is not to have a completely flat exchange rate but to as far as possible avoid the massive price spurt then pop scenario that Bitcoin has been going through.

@chriswen - not the exchange rate but the mining difficulty (which in this instance is being used as a measure of the coins popularity).

@bnogal - thanks for your suggestions. Regarding the transaction fee the only thought I had was having it in place is a (minor) incentive to hold onto coins. Whether that turns out to have any significance or 'spammy' transactions are a bigger concern is hard to say. Fortunately there are lots of test cases being conducted at the moment so it might soon become apparent!

[directedbit]

@bnogal the neural network idea is a really interesting but I think the system needs to be deterministic so that people understand. Neural network / pseudo random elements are mean the users need a lot more trust in the implementation (it's a lot harder to verify).

[bnogal]

people in general dont understand bitcoin neither... i dont think that can be a problem... the problem is to decide the best way to implement it.... and that need work. I could colaborate.