Timecoin

[genjix]

The biggest resistance to Bitcoin I've seen is:
- Deflation (we want our currency to lose value).
- Mining (baww it's unfair- cry me a river).

Did anyone tell inflation-adherents that the rich don't keep hard currency, but put their money in property, stocks, 401ks .etc? I've read all the pro-inflation arguments and they don't make logical sense. The concepts are shady.

[fabianhjr]

For Timecoin to work, it would have to be just scarce enough. Although, for the currency to act as a proper counterpart to Bitcoin, wouldn't each node decide on its own rate of inflation?

As a matter of fact I could decide right now that each block is worth 100 BTC. The Timecoin client could fight the Bitcoin deflation and just whichever has more support wins.(In the Bitcoin blockchain) :/

Instead of fragmenting each client should have the option to choose inflation or deflation and to which extend.

Isn't this possible?

[ShadowOfHarbringer]

For Timecoin to work, it would have to be just scarce enough.

It will never be as scarce as Bitcoin. Think logically: You have two currencies which are identical with exception that one has more value which is expected to rise faster. What will people choose ?

Although, for the currency to act as a proper counterpart to Bitcoin, wouldn't each node decide on its own rate of inflation?

You mean like allowing each node to print as much money as it wants ?
Wouldn't this be a Zimbabwe-style disaster ?

--
No, seriously. Why the hell would i want my savings to lose value ?.
Saving with hard currency is so easy. No need to buy physical things. You just keep money and they make profit. Isn't this beautiful ?

[theymos]

Isn't this possible?

Bitcoin clients will always ignore invalid blocks, no matter how long the Timecoin chain is. Timecoin could treat Bitcoin blocks as valid, but this would result in Timecoin being identical to Bitcoin unless Timecoin becomes bigger.

[FatherMcGruder]

You mean like allowing each node to print as much money as it wants ?
Wouldn't this be a Zimbabwe-style disaster ?

Yes.

[S3052]

This whole Timecoin thing does not at all speak to me.
In my opinion, this is a waste of time (Wastecoin) :-)

[abyssobenthonic]

As time approaches infinity, TimeCoin is, I suspect, superior to BitCoin and Expo/BernankeCoin in that its money supply is mathematically guaranteed to be constant and thus have neither inflation nor deflation and avoid both inflationary and deflationary spirals.

The best analogy to the money supply in *Coin is to consider a vessel into which water is being poured (via money creation) at irregular intervals (but the pour occurs instantaneously) and evaporating (e.g. lost wallets in the block chain currencies & sufficiently damaged notes in fiat currencies).  If, as I suspect, the percentage of the water in the vessel that evaporates is connected to a variable that has no correlation to time, volume of water in the vessel, or the amount of water being poured (and can thus be effectively considered to be its long-run average over t=(0,inf)), then (where v(t)=volume of water in vessel at time t, e=percentage of water at time t that evaporates between t and t+1, c(t)=water vapor that condenses in the vessel between t and t+1 (analogous to lost wallets being "recovered") and f(t)=volume of water poured into the vessel instantaneously at t):

v(t+1)=ev(t)+f(t)+c

For BitCoin: lim(t->inf, f(t))=0 and df/dt: never positive
For TimeCoin: df/dt=0 => f(t)=x (x: positive & real)
For Expo/BernankeCoin: df/dt=(r+e)t (r=the desired inflation rate... actually the better term is arguably KingCoin, given that the BoE theoretically has only an inflation target unlike the Fed)

In the case of fiat currencies, I suspect that c is zero (though I suppose that c could just stand for counterfeiting...).  For the block chain based currencies, c is vanishingly small (basically being the chance that someone randomly creating secret keys finds one that's already been used and lost) and likely to have a rather large variance (it may be years between successes even if the mining collectives turn their computing power to finding keys to harvest [hopefully lost] coins): it can essentially be ignored (and will have the basically same effect in any block chain currency (the effect on confidence in block chain currencies if a secret key is duplicated not being considered here)).

Assuming positive e:
For BitCoin, as t->inf, f(t)-ev(t-1) approaches zero from below thus lim(t->inf, v(t))=0
For TimeCoin, lim(t->inf, f(t)-ev(t-1))=0 thus lim(t->inf, v(t))=y (y: positive & real)
For Expo/BernankeCoin, f(t)>ev(t-1) thus lim(t->inf, v(t))=inf

e is, it should be noted, unknowable (since it's impossible to tell if a given key is lost or merely not circulating).

I also suspect, however, that there is little incentive for TimeCoin adoption prior to t being arbitrarily large...

[Bit_Happy]

Bitcoin cannot be changed the rules are already set.
Some type of "Timecoin" with very slight, 100% predictable inflation might help to combat deflation.
Better for merchants (more stable pricing), not as good for hoarders?

[abyssobenthonic]

Bitcoin cannot be changed the rules are already set.

TimeCoin can potentially fork off BitCoin at a few times and use the same block chain up to the point of the fork.

The only definitional difference between a TimeCoin implementation and a BitCoin implementation is that TimeCoin doesn't reduce the reward for solving a block as time goes by (instead, say, continuing to only accept blocks that award the solver 50 BTC as valid).  So if TimeCoin were released today, it would interact with BitCoin until such time as BitCoin clients only accept blocks that award the solver 25 BTC.  Before that, there need not be any difference between what blocks are accepted by TimeCoin or BitCoin.

Thoughts, notes, etc.
* TimeCoin and BitCoin addresses are thus equivalent (being the same keys but existing in different block chains)... they can almost be considered as slots in the same address.
* Whatever BTC balance one has at the moment of the fork in the chain carries on as both the BTC and TMC balances.  This isn't quite a double-spend opportunity because the two chains will repudiate/ignore each other's transactions.  It's perhaps analogous to a corporation distributing 1 class B share for every class A share as a dividend.
* This also guarantees a certain amount of initial exchange between BTC & TMC: a BitCoin partisan with, say, 100 BTC at the time of the fork would have 100 TMC that they would be willing to sell for BTC and a TimeCoin partisan with the same balance at the fork would find themselves with 100 BTC that they would be willing to sell for TMC.  Of course, the BitCoin partisan would only be able to liquidate their TMC by running TimeCoin for at least a short time alongside BitCoin.
* Exchange between TMC and BTC is rather easy if Alice and Bob are running BitCoin and TimeCoin alongside each other:
Alice sends BTC from her BTC slot to Bob's BTC slot
Bob sends TMC from his TMC slot to Alice's TMC slot
* TimeCoin may possess a greater chance of a successful fork than other forks because the fork occurs at some point in the future as opposed to when the first implementation tries to participate in the block chain.

[jtimon]

Bitcoin cannot be changed the rules are already set.
Some type of "Timecoin" with very slight, 100% predictable inflation might help to combat deflation.
Better for merchants (more stable pricing), not as good for hoarders?

Why do you want to combat deflation?
I bet you will say "because it causes hoarding and stops commerce".
To combat hoarding you don't need inflation, you can use demurrage. You can use freicoin instead of timecoin.

The austrians will say: "don't call it hoarding, is saving".
Again, save != hoard.
Hoard is just one way to save, being money time-resistant is the better.
You can save by storing things you will consume in the future (like Robinson storing fish to have time to make a ship). You can also save by lending (even at zero interest, after all the fish of crusoe is not durable).

[abyssobenthonic]

Following on from

This also guarantees a certain amount of initial exchange between BTC & TMC: a BitCoin partisan with, say, 100 BTC at the time of the fork would have 100 TMC that they would be willing to sell for BTC and a TimeCoin partisan with the same balance at the fork would find themselves with 100 BTC that they would be willing to sell for TMC.  Of course, the BitCoin partisan would only be able to liquidate their TMC by running TimeCoin for at least a short time alongside BitCoin.

* Immediately after the fork, the exchange rate would be set by the relative holdings of BTC partisans relative to TMC partisans.  If the ratio between TMC being sold by BTC partisans relative to BTC being sold by TMC partisans is 2:1, then it's reasonable to expect the equilibrium price to be somewhere near 1 TMC=0.50 BTC.

* If the exchange rate is above 1 TMC=0.50 BTC, then it's more profitable (ignoring transaction fees received in either block chain) for a miner to solve a TimeCoin block for 50 TMC and convert that to >25 BTC than it is to solve a BitCoin block for 25 BTC.  Miners might even implement software that tracks the exchange rate and switch between chains on the fly (e.g. if the spot rate is more than 1 TMC=0.55 BTC).

* If the fork is when there's been 10.5 million BTC mined (and thus TimeCoin starts with 10.5 million TMC) the debasement rates for the next 10k blocks (a bit more than 2 months) would be 2.38% for BTC and 4.76% for TMC.  Thus 1 futureBTC would be worth 0.9767 presentBTC at the fork and 1 futureTMC would be worth 0.9545 presentTMC.  Since at the instant of the fork BTC and TMC are identical, then the expected exchange rate between TMC and BTC 10k blocks after the fork would be 1 TMC=0.977 BTC.  This may make "on-the-fence" traders/speculators willing to buy TMC with BTC at the 1 TMC=0.50 BTC rate, preventing a dramatic fall in the exchange rate when the partisans have completed the process of trading their respective disfavored coins.

*  If the TimeCoin chain ends up with more hashing power than BitCoin then it becomes more immune to double-spend attacks and thus TimeCoin transactions engender more confidence.  We may then see the store-of-value function partially decouple from the medium-of-exchange function as merchants decide that TimeCoin transactions have a lower fraud/repudiation risk than BitCoin (in which case the merchant is basically deciding that the extra protection from being the victim of a double-spend attack is worth losing 0.3% daily due to the extra debasement in TimeCoin... of note is that merchants are currently generally willing to pay almost an order of magnitude more to the credit card industry for taking most credit risk off their hands).

[FreeMoney]

A smart trader will realize the depreciation before the actual drop and bet on it in advance. A smarter trader will do it earlier. Many of us are so smart that we will bet it all on Bitcoin and none on Timecoin from the first block.

But again please try it and we can lay it to rest with the experiment.

[Bit_Happy]

Is this typical of the Bitcoin community?

why is it that only the stupid noobs support inflation .. like this 'timecoin' proposal ...

Bitcoins will eventually face some kind of competition, and people who act like this actually help to devalue your precious Bitcoins, IMO.

Bitcoin cannot be changed the rules are already set.
Some type of "Timecoin" with very slight, 100% predictable inflation might help to combat deflation.
Better for merchants (more stable pricing), not as good for hoarders?

Why do you want to combat deflation?
I bet you will say "because it causes hoarding and stops commerce".
To combat hoarding you don't need inflation, you can use demurrage. You can use freicoin instead of timecoin.

The austrians will say: "don't call it hoarding, is saving".
Again, save != hoard.
Hoard is just one way to save, being money time-resistant is the better.
You can save by storing things you will consume in the future (like Robinson storing fish to have time to make a ship). You can also save by lending (even at zero interest, after all the fish of crusoe is not durable).

Gold, for example, has a continual increase in overall supply, due to mining in the real-world.
If there is demand for an experiment (which does not change Bitcoins rules) with very slight, 100% predictable inflation, then why put a huge effort into fighting against it?

[Bit_Happy]

...
Saving with hard currency is so easy. No need to buy physical things. You just keep money and they make profit. Isn't this beautiful ?

Gold and Silver both had severe Bear markets for over 20 years, was that beautiful?   

[jtimon]

Bitcoin cannot be changed the rules are already set.
Some type of "Timecoin" with very slight, 100% predictable inflation might help to combat deflation.
Better for merchants (more stable pricing), not as good for hoarders?

Why do you want to combat deflation?
I bet you will say "because it causes hoarding and stops commerce".
To combat hoarding you don't need inflation, you can use demurrage. You can use freicoin instead of timecoin.

The austrians will say: "don't call it hoarding, is saving".
Again, save != hoard.
Hoard is just one way to save, being money time-resistant is the better.
You can save by storing things you will consume in the future (like Robinson storing fish to have time to make a ship). You can also save by lending (even at zero interest, after all the fish of crusoe is not durable).

Gold, for example, has a continual increase in overall supply, due to mining in the real-world.
If there is demand for an experiment (which does not change Bitcoins rules) with very slight, 100% predictable inflation, then why put a huge effort into fighting against it?

I'm not fighting against other bitcoin-like currencies. In fact, I'm trying to maintain a list with all proposals, even thought I think is too early to support the competitors when the success of bitcoin is not secure yet.
On the other hand, I don't like much Timecoin.
It tries to solve the "deflationary bitcoin" problem, but I don't think the solution is good.
First of all, Bitcoin is only deflationary if there's economic growth. To avoid timecoin deflation, it issues a constant quantity of timecoins each year (instead of a decreasing quantitiy until convenrgence).
If we assume a constant growth of 1%, Timecoin will become eventually deflationary too, since the constant issued timecoins (50 per block) are a lesser percentage of the total supply each year.
Timecoin isn't good to solve the problem it is intended to solve.
If you want to see the list of proposed alternatives:

http://bitcointalk.org/index.php?topic=7500.0

My proposal is Freicoin, but nobody seem to like demurrage nor Gesell here.

[Bit_Happy]

^^^
I'll look at the list, thanks. 

[molecular]

My proposal is Freicoin, but nobody seem to like demurrage nor Gesell here.

In complementary currencies' field, demurrage is a cost associated with owning or holding currency. It is sometimes referred to as a carrying cost of money. The term was used by Silvio Gesell. It is regarded by some as having a number of advantages over interest: while interest on deposits lead to discount the future and to place immediate gains ahead of long-term concerns, demurrage does the opposite, creating an incentive to invest in assets which lead to longer-term sustainable growth. Furthermore, demurrage acts like inflation, stimulating the circulation of the currency, encouraging economic activity, and increasing employment.

Interesting indeed.

[jtimon]

My proposal is Freicoin, but nobody seem to like demurrage nor Gesell here.

In complementary currencies' field, demurrage is a cost associated with owning or holding currency. It is sometimes referred to as a carrying cost of money. The term was used by Silvio Gesell. It is regarded by some as having a number of advantages over interest: while interest on deposits lead to discount the future and to place immediate gains ahead of long-term concerns, demurrage does the opposite, creating an incentive to invest in assets which lead to longer-term sustainable growth. Furthermore, demurrage acts like inflation, stimulating the circulation of the currency, encouraging economic activity, and increasing employment.

Interesting indeed.

The first argument against it seems to be that no one would use such a currency if it's not enforced, but I think merchants will accept them because they would lose sells otherwise. There's some local currencies with demurrage already functioning in Germany (and probably in other parts of the world). Here's an example:

http://en.wikipedia.org/wiki/Chiemgauer
There's 424.400 CH in circulation.
I guess all this people are just stupid.

[FreeMoney]

I guess all this people are just stupid.

Uh huh.

[FreeMoney]

There are trillions of USD in circulation and billions of users this is not an indicator of a good system.