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Author Topic: Heavy transaction fee for old account: solution of deflationary spiral  (Read 4573 times)
aral
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June 20, 2011, 06:21:27 PM
 #41

I can't start 'my own' currency, perhaps with a critical mass of people who think this is a better system that would be viable.  

And as for Gessell, you are now claiming that he was not a 'real economist'.    This is utterly untrue, he was an influence, among others on John Maynard Keynes.  This idea has merit and again you cannot present any argument against it.  'It would become worthless' Why?  There would still be 21 million coins, this system only increases the velocity of that money and discourages hoarding.  The value of the coin remains the same. The idea that hoarding is a good thing, that is the really crackpot thing I heard people claiming on here.

Being an influence of Keynes is nothing to be proud of, on the contrary. They would be worthless because there would be no demand for them, regardless of their number. But please, prove me wrong. Start your own currency. You can and its very easy. Attracting people will take time as it did with Bitcoin. But its doable. Do it and prove me wrong. Start your own currency.

There would be still be demand for their value as transactional tokens.    Presumably you agree they are useful for that.  If not, what exactly are they for?  Currency is a medium of exchange.   Gold for example is scarce but although this makes it highly valuable it isn't used for international trade.  The dollar is.  I thought bitcoins would be extremely useful for global trade, you think I'm wrong in thinking that?
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hugolp
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June 20, 2011, 06:21:34 PM
 #42

you are already proven wrong.
currencies are accepted today even though there is inflation.

Is this a joke? Inflationary currencies are being accepted because the government forces them.

The USA had three central banks before the Fed. Everytime they lost the monopoly on money imposed by the government and they tried to stay in business they went bankrupt. Dont tell me that people accept inflation voluntarely, people are forced to accept inflation.

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built-in devaluation as is proposed here is just an "honest" form of inflation, i.e. you don't see the value of your money decrease, but you actually see your money decrease.

there isnt much difference, acceptance-wise.

Yes there is, because people know that this currency will lost value if they hold it so they will just drop it until nobody accepts it. The only way for an inflationary currency to work is impose it using violence. But please, start your own currency and prove me wrong.
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June 20, 2011, 06:21:44 PM
 #43

Economists are useless gasbags.

One of the few jobs where being wrong is not only compensated, but expected.


fortitudinem multis - catenum regit omnia
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June 20, 2011, 06:23:22 PM
 #44

There would be still be demand for their value as transactional tokens.    Presumably you agree they are useful for that.  If not, what exactly are they for?  Currency is a medium of exchange.   Gold for example is scarce but although this makes it highly valuable it isn't used for international trade.  The dollar is.  I thought bitcoins would be extremely useful for global trade, you think I'm wrong in thinking that?

Ok, stop pissing off and be honest. The dollar is only accepted because the USA government imposes it by force. Ive seen enough of this. IOm done. Go and start your own currency.
relative
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June 20, 2011, 06:28:14 PM
 #45

Again, you fail to understand. The protocol is what enforces everything. The client can do whatever it want's but unless it conforms to the protocol it will do nothing but produce non-transactions that are not included in the block chain. This is something which is voted upon by the network as a whole, the only way to 'win' the vote is for there to be a global software update. Which, at this point, is not likely to happen.

hello?
I usually dont argue with "you fail to understand", but you don't.
all I'm saying is that the majority will use the official client.
you aren't saying there'll never be a new version again, are you?


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Thus the advice to create your own fork to implement features that you would like to see which are not supported by the Bitcoin protocol.

there are no changes to the protocol needed.
relative
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June 20, 2011, 06:31:40 PM
 #46

The only way for an inflationary currency to work is impose it using violence.

absolutely untrue. they just have to become the standard currency somehow, violence being one way.

in fact, the first inflationary currencies were NOT imposed by violence.
gold smiths took gold on deposit for receipts, which became currency.

guess what happened.
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June 20, 2011, 06:35:58 PM
 #47

The only way for an inflationary currency to work is impose it using violence.

absolutely untrue. they just have to become the standard currency somehow, violence being one way.

in fact, the first inflationary currencies were NOT imposed by violence.
gold smiths took gold on deposit for receipts, which became currency.

guess what happened.

Ok, this thread is officially retarded. Enjoy.
relative
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June 20, 2011, 06:39:08 PM
 #48

Ok, this thread is officially retarded. Enjoy.

I hope whoever you have a talk to in the future enjoys your way of discussing something  Roll Eyes
da2ce7
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June 20, 2011, 06:41:10 PM
 #49

Trolling how-to for bitcoin forum:

1.  Show why hoarding is bad for debt based fiat currencies.  (aka deflationary spiral)
2.  Show that both debt based fiat currencies, gold and bitcoin are money.
3.  Huh
4.  Hoarding must be bad for all types of money!
5.  We need to change bitcoin so people don't hoard it!!!!

One off NP-Hard.
kjj
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June 20, 2011, 06:44:31 PM
 #50

hello?
I usually dont argue with "you fail to understand", but you don't.
all I'm saying is that the majority will use the official client.
you aren't saying there'll never be a new version again, are you?

Just like the majority of us use the official WWW client?

The bitcoin devs are currently putting a great deal of effort into bootstrapping alternative clients.

p2pcoin: a USB/CD/PXE p2pool miner - 1N8ZXx2cuMzqBYSK72X4DAy1UdDbZQNPLf - todo
I routinely ignore posters with paid advertising in their sigs.  You should too.
relative
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June 20, 2011, 06:45:02 PM
 #51

Trolling how-to for bitcoin forum:

good, then I'm not a troll because I never said anything close to that.
I don't even advocate this change.

the mistake I made here apparently was trying to actually discuss the idea instead of the usual "go f... yourself and your idea" answer you get on this board.


note that I am NOT OP.
Sukrim
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June 20, 2011, 06:54:27 PM
 #52

users and miners are going to accept whatever the official client enforces, unless the developers of that client screw up big time.
Miners are taking whatever getwork they get from their pool operators. As long as they get coins for that, they are fine.

Users can't do anything about fees imposed/forced by pools - if they require 1 BTC fee or nothing gets transferred, then they have to enter 1 BTC as a fee or nothing gets transferred. Simple as that!
As fees are currently as low as possible, and it's not expected that miners wnat to have LESS fees, the official client will happily relay any transaction that has more fees than it itself requires.

https://bitfinex.com <-- leveraged trading of BTCUSD, LTCUSD and LTCBTC (long and short) - 10% discount on fees for the first 30 days with this refcode: x5K9YtL3Zb
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relative
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June 20, 2011, 06:59:53 PM
 #53

the transaction doesnt even reach the miner if the client doesnt relay it. look up the current rules against SPAM and DDos.
second, why would the miner be against that? we are talking about a fee the miner collects.
da2ce7
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June 20, 2011, 07:09:19 PM
 #54

the mistake I made here apparently was trying to actually discuss the idea instead of the usual "go f... yourself and your idea" answer you get on this board.

No... the mistake that you have made is not doing any research before your posted... Not searching the forum for the 1000 other threads that is topic has already been debated to death with.

Everyday... we get the same people declaring the same 'arguments' and the same 'solutions' to the said problems of the deflationary spiral... lack of demurrage, hoarding, no inflation.  These come from a key lack of understanding about the natural differences between debt based money or asset based.

Both viewpoints are covered in the wiki article:
https://en.bitcoin.it/wiki/Deflationary_spiral

However,  I always believe that a non-deflationary currency will always be at an economic disadvantage to the deflationary one. As the deflationary currency will be more attractive.  Upon market saturation... the change of the fixed amount currencies value will be in DIRECT RELATIONSHIP with the change of the total economy size... This is extremely healthy, as only very profitable ventures will get money.

Inflation based currencies (esp debt based ones), create an artificial demand for growth. Causing most of the world's problems... unsustainable growth is unsustainable. Only linear growth can be sustainable.  Exponential growth, will always end in disaster.

One off NP-Hard.
relative
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June 20, 2011, 07:13:26 PM
 #55

Everyday... we get the same people declaring the same 'arguments' and the same 'solutions' to the said problems of the deflationary spiral... lack of demurrage, hoarding, no inflation.  These come from a key lack of understanding about the natural differences between debt based money or asset based.
I don't believe in a deflationary spiral either, neither in debt money nor in socalled asset money.
but I accept that others do because there is no hard evidence on either side.

Quote
However,  I always believe that a non-deflationary currency will always be at an economic disadvantage to the deflationary one. As the deflationary currency will be more attractive.
lets hope there will be competing currencies so this can be shown.
aral
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June 20, 2011, 07:36:36 PM
 #56

The dollar is only accepted because the USA government imposes it by force. Ive seen enough of this. IOm done. Go and start your own currency.

This isn't true!  The US government does not force you to use the dollar and other local currencies are used in some places.

I see you did not even attempt to defend your claim that bitcoins would be worthless under this proposal.  I am genuinely disappointed by the defensive response to this thread.  Maybe the OP was a troll but I am not.

And yes I actually think it's very likely that a new currency will emerge from this morass.
Sukrim
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June 20, 2011, 08:24:12 PM
 #57

the transaction doesnt even reach the miner if the client doesnt relay it. look up the current rules against SPAM and DDos.
second, why would the miner be against that? we are talking about a fee the miner collects.
The client currently relays nearly ANY transaction - as soon as there are fees, it will even more likely relay it than less likely. Miners would charge higher fees than currently, not lower and the client bans "too cheap" transactions, not too expensive ones.

Hope this is clear now.

Once more than 50% (of the hashrate) of the miners are willing enough to risk their reputation because they are making losses or whatever, they can force the whole bitcoin community to pay arbitrarily large fees according to any model they want. If someone includes a transaction that they don't like, they would have to 51%-attack this block and fork the blockchain off invalidating these unwanted transactions.

They can include their own payout transactions for free anyways if they want to, so that's not an issue.

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relative
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June 20, 2011, 08:31:12 PM
 #58


The client currently relays nearly ANY transaction - as soon as there are fees, it will even more likely relay it than less likely. Miners would charge higher fees than currently, not lower and the client bans "too cheap" transactions, not too expensive ones.

Hope this is clear now.
was clear before

Quote
Once more than 50% (of the hashrate) of the miners are willing enough to risk their reputation because they are making losses or whatever, they can force the whole bitcoin community to pay arbitrarily large fees according to any model they want.

right. any why couldnt they decide they only want to charge more for long inactive addresses because they dont wanna punish moving your moneys around or the real bitcoin economy (goods and services)?

voila - the free market has implemented OPs idea.
Vladimir
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June 20, 2011, 08:31:34 PM
 #59

the transaction doesnt even reach the miner if the client doesnt relay it. look up the current rules against SPAM and DDos.
second, why would the miner be against that? we are talking about a fee the miner collects.
The client currently relays nearly ANY transaction - as soon as there are fees, it will even more likely relay it than less likely. Miners would charge higher fees than currently, not lower and the client bans "too cheap" transactions, not too expensive ones.

Hope this is clear now.

Once more than 50% (of the hashrate) of the miners are willing enough to risk their reputation because they are making losses or whatever, they can force the whole bitcoin community to pay arbitrarily large fees according to any model they want. If someone includes a transaction that they don't like, they would have to 51%-attack this block and fork the blockchain off invalidating these unwanted transactions.

They can include their own payout transactions for free anyways if they want to, so that's not an issue.

Internet will treat censorship as damage and will route around it, surprise, surprise. If a miner wants to process free or low cost transactions he can. He could for example set up a bunch of client nodes which would route transactions to him. people would simply connect to these nodes specifically for free or low cost transactions.

Thinking that clients have any control over miners in matters which transactions to include and which to not include, is rather naive.

Give up, it is so simple, miners are free to include or not include any transactions, clients are free to woo miners with fees to get their transactions processed quicker or at all. That's it really.

Proponents of crazy fee schemes are free to bribe miners to play by their rules.

Wow, mining seems to become quite a glamours occupation, all of the sudden.





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jtimon
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August 17, 2011, 06:23:51 PM
 #60

Sorry for bumping the thread after almost two mounths, but you know that I want to participate in all demurrage related threads (there aren't that many).

@ chodpaba and relative
Although miners could agree and make it happen (like they're going to do in namecoin soon to allow merged mining), a change in the protocol (not only the official client) would be needed.

Quote
built-in devaluation as is proposed here is just an "honest" form of inflation, i.e. you don't see the value of your money decrease, but you actually see your money decrease.

there isnt much difference, acceptance-wise.

Yes there is, because people know that this currency will lost value if they hold it so they will just drop it until nobody accepts it. The only way for an inflationary currency to work is impose it using violence. But please, start your own currency and prove me wrong.

There's difference or not between demurrage and inflation?
Your claim would be more accurate if you say "The only way a medium of exchange that doesn't perform well the storage of wealth function can be accepted is to be enforced legal tender". Because demurrage and inflation are not the same thing and you want to include both.
There's many proofs of the falseness of this claim working today as medium of exchange. You didn't proved wrong even the goldsmith counter-example.
And just out of curiosity, if the bitcoin protocol changed to include demurrage, would you sell your coins back for your national currency or would you prefer to exchange if for good and services?
If you had an internet business would you reject freicoins even if some service like bit-pay can turn them into bitcoins for you?

OK, so I'll generate a new receiving address every day. You don't know the age of my wallet, all you can know is the age of the receiving addresses. You don't even have any idea what receiving addresses belong to my wallet. And even if you did know the age of my wallet and all of the receiving addresses inside of it, I can always just generate a brand new wallet whenever I wanted.

The balance of an address is calculated adding the amount of each output sent to that address. To apply demurrage, you just need to substract the storage fee from each output since the block number they appear in the chain.

@Sukrim and Vladimir
With merged mining there's no point in a 50/50 battle. If the majority of bitcoin miners want the change it will be done, if not, I new chain must be started.
I personally find much easier and likely the later option.

By the time anyone implements this xenon481 will likely have enough hashing power to confirm his own transactions if he chooses to wait for them. The system you propose ensures there will be an elite that will not have to pay the demurrage that everyone else pays, in fact, they will probably agree to mutually exclude themselves from the tax.

Miners can't avoid demurrage. It's in the protocol, their blocks would be rejected just like if a miner tries to send 60 btc from a 50 btc balance public key.

Why hold bitcons when they devalue in time, when you can hold gold or silver. Its fucking retarded.

To exchange with them?
They can still hoard the gold to store value.

However,  I always believe that a non-deflationary currency will always be at an economic disadvantage to the deflationary one. As the deflationary currency will be more attractive.  Upon market saturation... the change of the fixed amount currencies value will be in DIRECT RELATIONSHIP with the change of the total economy size... This is extremely healthy, as only very profitable ventures will get money.

Yes, with deflation only the very most profitable business will be funded, but that's beyond competition, that's elitism.
With stable prices some more business with lower profitability (but still with profits) can operate.
With lower interest rates (yes, I know how bad this sound here) even more investments can take place.

Inflation based currencies (esp debt based ones), create an artificial demand for growth. Causing most of the world's problems... unsustainable growth is unsustainable. Only linear growth can be sustainable.  Exponential growth, will always end in disaster.

The proposed currency is neither inflationary nor based on debt. It's pure cash like bitcoin because it is scarce.
I must say have nothing against credit based moneys. In fact I advocate for LETS and Ripple.
But they lack the quality of our financial system that makes the growth of debt unavoidable, which is interest.
Interest is what Gesell wanted to eliminate in the first place (no, not risk premium).
Now you will say "low interest are bad, that's what Bernanke does, it leads to miss-allocation of capital".
But are low interests the problem or the means to achieve those low interest?
Do low interests lead to malinvestments without inflation?

Sure we should start a new chain, but let's just use praxeology to prove Gesell's theory on interest right or wrong.
 

2 different forms of free-money: Freicoin (free of basic interest because it's perishable), Mutual credit (no interest because it's abundant)
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