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Author Topic: What will be the next currency?  (Read 6280 times)
jtimon
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July 23, 2011, 07:19:47 PM
 #21

Bancor?
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What solar panels have to do with the IMF ?

Besides their both having nothing to do with Bancor? Actually, I hit quote instead of reply. I knew about SDRs, but never heard of Bancor. Bancor is a theoretical fiat currency, right?  So how can it be better than any other peso?

I see, it was a mistake, sorry. But the IMF have also proposed a fiat currency called Bancor (although probably is not like what Keynes proposed).
Not saying that Keynes's bancor was a good idea but IMF's bancor is probably worse.

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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July 23, 2011, 07:52:40 PM
 #22

A gold backed blockchain.....
jtimon
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July 23, 2011, 08:10:19 PM
 #23

A gold backed blockchain.....

I think storing things to "back" the medium of exchange is stupid.
But someone claims it can be done without any gold.
If it were possible, I would prefer a stable currency through a basket of contracts representing different commodities.

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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July 24, 2011, 12:22:31 AM
 #24

Besides their both having nothing to do with Bancor? Actually, I hit quote instead of reply. I knew about SDRs, but never heard of Bancor. Bancor is a theoretical fiat currency, right?  So how can it be better than any other peso?

I don't know much about the Bancor proposal; just came across a mention of it the other day.  It was supposed to be a currency only used in international trade, and its purpose was to prevent trade and currency "wars" by discouraging trade deficits and surpluses.  It was supposed to be backed by barter (whatever that means), and it's value would've been expressed in gold.  It's kind of hard to find much information about it, but here's two Wikipedia articles:

http://en.wikipedia.org/wiki/Bancor
http://en.wikipedia.org/wiki/International_Clearing_Union

China seems to like the idea of it, so it may be the next new currency.

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July 24, 2011, 09:31:39 AM
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Besides their both having nothing to do with Bancor? Actually, I hit quote instead of reply. I knew about SDRs, but never heard of Bancor. Bancor is a theoretical fiat currency, right?  So how can it be better than any other peso?

I don't know much about the Bancor proposal; just came across a mention of it the other day.  It was supposed to be a currency only used in international trade, and its purpose was to prevent trade and currency "wars" by discouraging trade deficits and surpluses.  It was supposed to be backed by barter (whatever that means), and it's value would've been expressed in gold.  It's kind of hard to find much information about it, but here's two Wikipedia articles:

http://en.wikipedia.org/wiki/Bancor
http://en.wikipedia.org/wiki/International_Clearing_Union

China seems to like the idea of it, so it may be the next new currency.

What the IMF has proposed doesn't have a clearing union or anything like that. It's just like the dollar but issued by the IMF instead of the Fed.
" From SDR to bancor. A limitation of the SDR as discussed previously is that it is not a currency.[...] One option is for bancor to be adopted by fiat as a common currency (like the euro was),[...]"

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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July 24, 2011, 09:51:38 AM
 #26

The 'electricity bill' is voluntary. It's almost like short-circuiting a wall socket. Bitcoin would run fine on a couple dozen mining machines. We don't need 20 - 30k, except to prevent theoretical attacks on the block chain.
Have you just said that security of the bitcoin system is optional?

It might be. If it is actually necessary, then the cost scales with the size of the Bitcoin economy.

This is exactly right. The cost of security, if necessary, scales with the size of the economy. This is also very worrisome. Current expenditure on security is 37% of bitcoins in existence per annum. About 37 million dollars per year. Currently, it is paid for by inflation and the inflow of new speculators. In the future, the plan is to have the users pay for it. 37 million USD at 14 USD per coin. 74 million dollars per year at 28 USD per coin. Divided by a user base of 30k, this is an average payment of about 1000 USD per user per year. You better hope the security isn't necessary. Otherwise, the currency will be fucked.

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cbeast
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July 24, 2011, 10:52:07 AM
 #27

The 'electricity bill' is voluntary. It's almost like short-circuiting a wall socket. Bitcoin would run fine on a couple dozen mining machines. We don't need 20 - 30k, except to prevent theoretical attacks on the block chain.
Have you just said that security of the bitcoin system is optional?

It might be. If it is actually necessary, then the cost scales with the size of the Bitcoin economy.

This is exactly right. The cost of security, if necessary, scales with the size of the economy. This is also very worrisome. Current expenditure on security is 37% of bitcoins in existence per annum. About 37 million dollars per year. Currently, it is paid for by inflation and the inflow of new speculators. In the future, the plan is to have the users pay for it. 37 million USD at 14 USD per coin. 74 million dollars per year at 28 USD per coin. Divided by a user base of 30k, this is an average payment of about 1000 USD per user per year. You better hope the security isn't necessary. Otherwise, the currency will be fucked.
It won't be long before the user and miner base goes beyond 30k. Also, the value of BTC will go much higher. If these two things don't happen, then bitcoin will become an expensive hobby or fail completely.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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July 24, 2011, 11:39:54 AM
 #28

It won't be long before the user and miner base goes beyond 30k. Also, the value of BTC will go much higher. If these two things don't happen, then bitcoin will become an expensive hobby or fail completely.
The cost of hashing needs to grow with the value of bitcoin - because the bigger value the bigger incentive to attack the system.  The question is how much.

As a startup currency bitcoin needs a business plan - an analysis of the system costs and benefits and a realistic plan for reaching a positive balance.  Without such a plan the current $500K a month cost (this is a rough estimate - but the only one I have now) is rather extravagant.
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July 24, 2011, 11:50:29 AM
 #29

It won't be long before the user and miner base goes beyond 30k. Also, the value of BTC will go much higher. If these two things don't happen, then bitcoin will become an expensive hobby or fail completely.
The cost of hashing needs to grow with the value of bitcoin - because the bigger value the bigger incentive to attack the system.  The question is how much.

As a startup currency bitcoin needs a business plan - an analysis of the system costs and benefits and a realistic plan for reaching a positive balance.  Without such a plan the current $500K a month cost (this is a rough estimate - but the only one I have now) is rather extravagant.

Yup, the syatem is either way too secure and thus wasting a lot of money (more like 2-3 million a month) or it will become highly insecure in the future. What is needed is a new design which makes use of.proof of stake for security. This can either be a forked version of bitcoin or an entirely new cryptocurrency.

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July 25, 2011, 03:51:56 PM
 #30

I firmly believe that the next crypto-currency will not be a replacement for bitcoin, but an extrapolation of bitcoin. Lots of people are very invested in bitcoin and have a huge motivation to make it better.

I believe that bitcoins will be extrapolated to please people who want a stabilized currency for use in commerce and as a stable store of value while also pleasing people who want to bet big on bitcoin's future. This will happen by transferring the risk of price volatility from the former group to the latter group by setting up contracts within the protocol.

I introduced the concept here: http://forum.bitcoin.org/index.php?topic=30741.0
It is currently being discussed here: http://forum.bitcoin.org/index.php?topic=31032.0

I think this is so important, I am actually paying people to post intelligent comments in the latter thread (see thread for a link to the rules).

zby
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July 25, 2011, 04:29:25 PM
 #31

It seems that Ben Laurie latest proposal (http://www.links.org/files/distributed-currency.pdf) is exactly what I was thinking about (but maybe it is purely my subconscious playing with the names Laurie gave to the central timestamping servers - mintettes Smiley
cbeast
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Let's talk governance, lipstick, and pigs.


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July 25, 2011, 11:08:57 PM
 #32

It seems that Ben Laurie latest proposal (http://www.links.org/files/distributed-currency.pdf) is exactly what I was thinking about (but maybe it is purely my subconscious playing with the names Laurie gave to the central timestamping servers - mintettes Smiley
Wow. I looked at the abstract. #3 took me back. A central authority? Really? Who would run it, The Fed?

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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July 26, 2011, 06:19:49 AM
 #33

It seems that Ben Laurie latest proposal (http://www.links.org/files/distributed-currency.pdf) is exactly what I was thinking about (but maybe it is purely my subconscious playing with the names Laurie gave to the central timestamping servers - mintettes Smiley
Wow. I looked at the abstract. #3 took me back. A central authority? Really? Who would run it, The Fed?
It is distributed.  In fact what he proposes is that everyone can run one of the timestamping servers - the difference with bitcoin is only that such a server needs to be registered.  The assumption is that more then 50% of these servers will be honest (similarly to bitcoin) - and the registration process needs to prevent the case where someone registers more then 50% of all servers.  The registration is the weak point of the article - but I think it is doable.
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July 26, 2011, 09:59:53 AM
 #34

It assumes 50% of the nodes (in numbers, not computation power) are honest? Wow... that makes Sybil attacks super-attractive.

Having a registration process that prevents someone registering more than 50% of the servers without central authority is neigh-to impossible. And adding a central authority destroys the whole idea IMO and is backwards.

Bitcoin certainly has a few drawbacks but it's still the "least worst" in my eyes...

Bitcoin Core developer [PGP] Warning: For most, coin loss is a larger risk than coin theft. A disk can die any time. Regularly back up your wallet through FileBackup Wallet to an external storage or the (encrypted!) cloud. Use a separate offline wallet for storing larger amounts.
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July 26, 2011, 10:57:59 AM
 #35

It assumes 50% of the nodes (in numbers, not computation power) are honest? Wow... that makes Sybil attacks super-attractive.

Having a registration process that prevents someone registering more than 50% of the servers without central authority is neigh-to impossible. And adding a central authority destroys the whole idea IMO and is backwards.
Yeah - this is the weak point.  What he proposes is that establishment of new servers requires consensus of all current servers, and later speculates that it will all depend on the initial set of servers - but indeed this is very sketchy.
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