Heavy transaction fee for old account: solution of deflationary spiral

[aral]

Feel free to do so then, not just outlining some ideas here: convince the pool operators of deepbit, BTCguild and slush as a starter - just head over to the Mining --> Pool section and off you go!

Forget that, convince the newer pools instead, the ones who aren't sitting on a BTC hoard would stand to gain enormously.  This would be a boost to the majority of miners who don't own a lot of bitcoin, a sort of wealth re-distribution.

[1713892978]

1713892978

[xenon481]

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.

doesnt matter. when transaction fee is a steady function of time transferring your coins to a new address every day will cost you as much or more than just keeping it where it is.

OK, I understand where this is going now.

But.

That doesn't fix anything. If it is a directly proportional function, then there isn't really enough incentive for spending now vs later. Because it is directly proportional, all that it does is change the prices that people are willing to accept on both sides of the table. It would cause some problems early on, but eventually, the market would stabilize and you'd have to find some other way of upsetting it again.

[Sukrim]

@Sukrim And how this contradicts anything I said? Or are you picking on 50% I mentioned and not 51%?

I'd rather pick on your "comprehension issue" flame and that you mention 10 GH/s and not 10TH/s...

With a new block chain, you would have (like namecoin) first see difficulty explode and then the whole chain dying out slowly.
Also he is specifically talking about Bitcoin. Any blockchain that enforces these rules rather than leave it up to the miners would not be "Bitcoin" any more.

To enforce such a rule in the Bitcoin network, there are 2 ways:
It becomes the "de facto" minimum standard agreed upon between all/nearly all miners + pools, so it takes nearly forever until transactions that don't "fit" to that scheme are confirmed, forcing everyone to pay these fees.
More than 50% of miners want this fee and risk heavy forking, big parts of their income and that someone might come online/start mining to "overrule" them and they start 51%-attacking the network, pushing blocks with undesired transactions out of the block chain. The bigges this fraction becomes, the easier it gets to invalidate "rogue" blocks, so after some time, once a part of the miners has "won", it will become impossible to get a transation into blocks, that doesn't conform with these rules, as it will be 51%-overruled as fast as possible. This however would very likely lead to a split or to people fleeing from Bitcoin, who are not happy with these rules.

[hugolp]

Great idea. Go make your own block chain now.

+1 Please go and start your currency.

[Vladimir]

@Sukrim. Fixed typo, and have reading comprehension issues here myself now, failing to see what is it you trying to argue with me. All I said is basically that the idea is non starter in current blockchain. Could be done in a new block chain. I did not say that such new block chain would be viable.

[hugolp]

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.

doesnt matter. when transaction fee is a steady function of time transferring your coins to a new address every day will cost you as much or more than just keeping it where it is.

OK, I understand where this is going now.

But.

That doesn't fix anything. If it is a directly proportional function, then there isn't really enough incentive for spending now vs later. Because it is directly proportional, all that it does is change the prices that people are willing to accept on both sides of the table. It would cause some problems early on, but eventually, the market would stabilize and you'd have to find some other way of upsetting it again.

Exactly. Not to mention that basically bitcoins would be worthless and would disappear since nobody would want to hold them. Why hold bitcons when they devalue in time, when you can hold gold or silver. Its fucking retarded.

I hope this guy starts this new currency so he realizes for himself what happens.

[relative]

That doesn't fix anything. If it is a directly proportional function, then there isn't really enough incentive for spending now vs later. Because it is directly proportional, all that it does is change the prices that people are willing to accept on both sides of the table. It would cause some problems early on, but eventually, the market would stabilize and you'd have to find some other way of upsetting it again.

I'm not advocating this, but it isnt as easy as that to dismiss. there is a whole economic school proposing this for "regular" money.

google "freigeld" or "freiwirtschaft". I'm not sure though how many resources you'll find in english since it was started by a german: http://en.wikipedia.org/wiki/Silvio_Gesell

Exactly. Not to mention that basically bitcoins would be worthless and would disappear since nobody would want to hold them.

thats the point. > velocity of money

[aral]

Exactly. Not to mention that basically bitcoins would be worthless and would disappear since nobody would want to hold them. Why hold bitcons when they devalue in time, when you can hold gold or silver. Its fucking retarded.

I hope this guy starts this new currency so he realizes for himself what happens.

It is not retarded! People would be have more incentive to spend bitcoins instead of holding them. 

Also they wouldn't 'devalue', in fact they would appreciate in value just the same, as more people started using them, but they would be more useful as transactional tokens rather than a store of wealth.

I don't yet see any convincing arguments against this idea.  I wonder if what you're really saying is "get yer filthy 'ands off me stack o coins"

[Vladimir]

aral, we've just seen, wave after wave after wave of noobs coming in and screaming 'unfair! I cannot get 1% of all bitcoins in existence! Let's change the rules right now or I'l throw a tantrum!'

the best answer we can come up with is 'go get your own block chain going'.

[relative]

aral, we've just seen, wave after wave after wave of noobs coming in and screaming 'unfair! I cannot get 1% of all bitcoins in existence! Let's change the rules right now or I'l throw a tantrum!'

I dont see how this is anything against early adopters. it is about the price structure of transaction fees, which AFAIK are not yet decided upon and subject to change. the FAQ or something says so.

[hugolp]

Exactly. Not to mention that basically bitcoins would be worthless and would disappear since nobody would want to hold them. Why hold bitcons when they devalue in time, when you can hold gold or silver. Its fucking retarded.

I hope this guy starts this new currency so he realizes for himself what happens.

It is not retarded! People would be have more incentive to spend bitcoins instead of holding them. 

Also they wouldn't 'devalue', in fact they would appreciate in value just the same, as more people started using them, but they would be more useful as transactional tokens rather than a store of wealth.

I don't yet see any convincing arguments against this idea.  I wonder if what you're really saying is "get yer filthy 'ands off me stack o coins"

Aral with all my heart I implore you to leave Gessell aside and study real economics.

With your system bitcoins would become worthless and nobody would use them. They would not circulate because nobody would accept them. But you odnt have to believe me. Go and start your own currency. Its a small change in the code, its very easy. Go and do it.

[Vladimir]

The transaction fees are subject to supply and demand and free market forces. Moreover they are currently heavily subsidised by 50 BTC block reward.

It is as reasonable to insist on some particular 'fee schedule' as it is to demand that all bitcoins shall be sold at a particular price, like 17.5$, for example.

The only viable way to dictate any particular 'fee schedule' is to successfully execute 50% attack and split the network by not including into your winning chain any blocks generated by miners not conforming to dictated fee schedule. Good luck with that.

One can suggest miners to adopt some particular fee schedule, and if it is reasonable miner probably would use it. However, given 50 BTC subsidy, and anti-spam fees as implemented in the current official client there is not much reason for miners to use any other 'fee schedule'.

I suppose that if someone agrees to pay, let's say, 10 BTC to those who solved a block while using some particular 'fee schedule' than it might work. Hopefully, this someone has lots of money to pay such subsidy. In such a case I would be the first one to implement paid for 'fee schedule', unless it somehow threatens the network.

[relative]

The only viable way to dictate any particular 'fee schedule' is to successfully execute 50% attack and split the network by not including into your winning chain any blocks generated by miners not conforming to dictated fee schedule. Good lucks with that.

bitcoin is not as decentralized as people think.
notwithstanding a major screwup by those guys, > 50% will adopt what the handful of people who are developing the official client decide should be the default.
and they apparently say: we're not sure yet what transaction fees will look like.

With your system bitcoins would become worthless and nobody would use them. They would not circulate because nobody would accept them. But you odnt have to believe me. Go and start your own currency. Its a small change in the code, its very easy. Go and do it.

I hope someone does, even though I'm not convinced of the idea.
you can't be against central control of currencies and against competition of currencies at the same time.

[relative]

First of all, it is a meaningless statement. It is a bit like saying "we have not yet decided on the value of Bitcoin". Miners may presently exclude transactions which do not have fees associated with them. And users may include fees as they wish. But presently there is no need to do so because the transaction load is trivial compared to what the network can handle with really no additional overhead. When users choose to include transaction fees at this time it is more like saying "thank you random miner for helping to make our network strong, here is a small donation".

the regular client already enforces some transaction fee rules to avoid spam and DOS attacks.
when it is decided by only a few guys that the official client only accepts transaction with a certain transaction fee and there is no "revolt" by users, miners cant do anything about it.

[relative]

You talk like that is the only client that people can use, which I know very clearly is not the case.

no I dont. see my post above.

[Sukrim]

when it is decided by only a few guys that the official client only accepts transaction with a certain transaction fee and there is no "revolt" by users, miners cant do anything about it.

WRONG:
If more than 50% of miners are pissed enough that Millions of BTC get shifted around but nearly no fees are being paid, they can as I said 51%-attack the network and force fees as they wish. If the official client doesn't do what they want to, that's the official client's problem.

The Eligius pool for example ONLY includes transactions that follow a certain fee structure and also offers a modified Bitcoin client that automatically pays them (cheaper than the current fees by the way, but for every transaction). There's not much to loose currently for pools, transaction fees are anyways only 0.1-0.2% of a block reward...

I doubt however that the fee structure you propose will be adopted.


Including free transactions comes at a cost: Storage space. Every kB of transactions gets stored on every Bitcoin node all over the world + transferred + verified... a huge waste of ressources that is leeched by people doing transactions for free. The only thing saving them right now is that pools are operated by idealists rather than economists, at least to a certain degree. This won't be the case all the time.

[aral]

Aral with all my heart I implore you to leave Gessell aside and study real economics.

With your system bitcoins would become worthless and nobody would use them. They would not circulate because nobody would accept them. But you odnt have to believe me. Go and start your own currency. Its a small change in the code, its very easy. Go and do it.

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.

aral, we've just seen, wave after wave after wave of noobs coming in and screaming 'unfair! I cannot get 1% of all bitcoins in existence! Let's change the rules right now or I'l throw a tantrum!'

This is an interesting idea, not a 'noob tantrum'.  

That currency deflation is a bad thing is fairly conventional economics, and the problem of the 'liquidity trap' is very real.  It is entirely logical for people to withhold investment because they have more to gain by hoarding excess money.  Sure I can go and read all the Austrian school writing about how that's all Keynesian nonsense but I've not seen anyone on here yet with an argument that is anything more than handwaving or ad hominem attacks.  

[hugolp]

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.

[relative]

WRONG:
If more than 50% of miners are pissed enough that Millions of BTC get shifted around but nearly no fees are being paid, they can as I said 51%-attack the network and force fees as they wish. If the official client doesn't do what they want to, that's the official client's problem.

that is what I called a "revolt" above. how likely is that about to happen?
about as likely as someone actually succeeding after you said "f.. your idea, go fork the blockchain if you want it".

users and miners are going to accept whatever the official client enforces, unless the developers of that client screw up big time.

That currency deflation is a bad thing is fairly conventional economics, and the problem of the 'liquidity trap' is very real.

there's actually pretty good evidence that deflation isnt a problem at all, like during the industrial revolution or after wars. but I don't wanna turn this into an age-old debate about economics.

[relative]

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.

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

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.