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MCStannard
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July 25, 2013, 06:14:31 PM
 #1

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Etlase2
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July 25, 2013, 06:22:16 PM
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Well I was expecting to see more info in the pdf, but it is the same as the post for anyone interested.

I've designed a cryptocurrency on paper, linked in my signature, that will attempt to maintain a relatively stable value. Still in the works though.

Etlase2
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July 26, 2013, 03:09:00 AM
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If I have understood correctly, your design is to keep the cost of mining your currency stable by disincentivising improved technology which can mine more profitably.

This is part of it, but not all. A lot of energy has to be "burned" by the miners to even begin to create some new currency, meaning that hopefully the currency must be valued somewhat above its cost to produce before mining can even begin. In addition to this, so that lots of energy must not be wasted in creating money, and to incentivize using the money as money rather than a speculative vehicle, lots of free money is given away when people do mine so that the currency becomes unprofitable to mine again relatively quickly. If the currency is below its cost to produce, no one will likely produce it, and thus incentivizing people to accept it on the hope of it returning again to its higher value. This should be a fairly powerful motivator considering how much faith is really required for any currency to be successful.

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This may keep the currency more valuable than others to mine, but I'm not sure this will stabilise the value of the currency.

Neither am I, but I think it is the most effective design possible given what we know about how cryptocurrency will be used, which is almost nil at this point.

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I am working more on a detailed design and a basic simulation to help develop an algorithm which can lead to the network regulating its own rate of currency circulation.

Basing it on transaction activity won't work well, especially if you raise tx fees in response to increased activity. There will be many other ways to transact the currency that are "off-chain" and won't be monitored by the network, throwing off the calculations. This will in fact be encouraged if you raise tx fees and will further skew the data.

I considered using an idea where the difference in the amount of transactions could be monitored to potentially gauge inflation or deflation, but this really can't account for the changes in how cryptocurrency will be used in the future, and thus will likely be wrong more often than it is right. Maybe after the world has been using cryptocurrency for a hundred years or so and we have gobs of real data, something could be devised that will be very successful, but at this point it is just a guessing game, and I'm fairly sure every guess is going to be wrong. There are just too many factors to account for, and not nearly enough information to draw on.

Etlase2
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July 26, 2013, 04:16:44 AM
 #4

How can the currency be transacted "off-chain"? I guess one of these ways could be giving a person a wallet or address which holds the currency.

ewallets, for one. If transaction fees are too high, it provides an opportunity for paypal-like sites to take over where tx fees are cheaper.

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This is essentially what I was proposing. Is it not possible to recover all of the transaction in a block and the amounts that were transacted. If it is we can average out the volume across a number of blocks and measure the change in this average when each new block is found.

Sorry, I was totally unclear. I meant like if the average tx was 20 coins one year and it is 23 coins the next year, maybe there has been inflation.

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