Perfect Altcoin?

[Rogue5pawn]

Altcoins as a commodity may not be a very good idea. Like the Gold Standards of yore, the more valuable an item becomes, the more likely people will desire to hoard the item rather than spend it.
This is essentially why governments went off the precious metal standards. What costs 2 BTC now will cost 1 BTC tomorrow and so on because no one will be willing to spend such a valuable item.

Altcoins as a currency, on the other hand, are a wonderfully innovative idea! However, to be a currency, a unit of exchange needs to be exchanged.
Thus my question: What characteristics would the "Perfect" Altcoin have?

In my humble opinion, the Perfect Altcoin would.....
   1. Have a reasonable minting/mining timeframe, say, between 5 to 15 minutes per block,
   2. Adjust Difficulty every block,
   3. Have Transaction Confirmations around 30 to 150 blocks,
   4. Have Proof-of-Work, Proof-of-Stake, and maybe something we could call Proof-of-Use (no idea how this would work, but maybe something like a % cash back type thingy),
   5. Built-in Deflationary measures, like Proof-of-Stake would be of limited duration before Demurrage set in (http://en.wikipedia.org/wiki/Demurrage_(currency)), somewhere around 30 to 90 days,
   6. Be Sha256 based (although when Scrypt ASICs reach the open market (http://alpha-t.net/blogs/news/8982747-development-update-13-10-2013), this will be moot),
   7. Have a way to force a refund from Businesses via a regulated, disinterested third-party,
   8. Have perhaps a way to earn interest by loaning the altcoin to others,
   9. Be so easy to use in day-to-day transactions that little, old, technophobic grandmothers never have to ask twice about it.

These are just a few ideas and, of course, are in no way to be considered an exhaustive list of ideas, which is why I posit the Question.

Also, I posted this question in the Economics section because the Question is more about how to create a cryptocoin that encourages economic stimulation rather than commodity holding.

What are your ideas?

[Shallow]

Conpletely disagree with point 7. Why would you want to hand control of your money over to companies? 

[Rogue5pawn]

Private, Personal, Individual PEOPLE wallets would never be, could never be connected to whatever, whomever the regulating agency happened to be.

On the flip side, this hypothetical regulating agency could use shh tunneling and rpcallow to cause BUSINESS-CORPORATE-INSTITUTION non-people wallets to initiate a new transaction so as to cause a refund to the real, live person/customer, if and only if all other attempts had failed in dispute resolution AND the customer had been found to be the aggrieved party.

This system is already currently in place for ALL fiat accounts, both corporate AND private, and is generally referred to as a chargeback. Cryptocurrencies have finally created a way for PRIVATE individuals to not be subjugated to this system, but BUSINESS do not have (or at least should not have) the same rights as live people do.

Please re-read Point 7.... it only refers to BUSINESSES "handing control over to" an outside agency, just in case push comes to shove and the business is in the wrong.
Point 7 in no way affects your wallet or your money in any way.... except as the recipient address for a refunded transaction.
----------------------------------

Given how all cryptocurrency wallets function right now, I could set up my wallet on my home PC so that, from any predefined/pre-allowed IP in the world, I, and only I, can cause my home PC wallet to send my money to any other wallet. I'm just suggesting that a Business Version of a wallet have those config features built into it, so that a specific agency with a specific IP could initiate a remote transaction of the business's wallet IF that business were to be found at fault.

I think all those people that sent BTC to BFL would like to have gotten their BTC back from BFL if there had been a way to do it. As it stands, it just isn't possible. Thus, Point #7.

[Adrian-x]

What characteristics would the "Perfect" Altcoin have?

In my humble opinion, the Perfect Altcoin would..... (Omissions being the default Bitcoin standard)

   1. Have Proof-of-Work that is dependent on having a Mining Option.
   2. Have Mining Options that are created by a Proof-of-Block-Chain Participation ( Full node - broadcasting and syncing ) -
   3. Mining options that are generated from the moment the Node is synchronised - and stop accumulating when out of sync. - Mining options are transferable, but only for the participating longest chain. - intended to be traded once specialisation matures.  
   3. Inflation rate of supply of coins to reflect (a Logistic Function) and not the current step function to better reflect  a normal distribution model, and have new coins mined on a Gaussian Curve (GaussCoin)

The combination above is intended to, reward the task of maintaining a node when the Block-Chain grows in bandwidth and size, regulate mining via the reward in relation to block chain size, reword early participants, accelerate adoption, and add security eliminating hashing attacks.  And have an inflation rate that reflects growth while maintaining network security and early adopter privileges - and be silver to Bitcoins Gold.  

[Rogue5pawn]

I applaud your thinking on the matter and I will give it some thought before offering critique and making adaptations to my own thinking on the matter.

As for being "Silver to Bitcoin's Gold,".... I would politely remind people that all nations went off the gold/silver standards for a very good reason. The Great Depression in the USA happened, in part, because the country did not get off those metals as a standard soon enough. The short version for this was that the value of the medium became in hoarding rather than using/spending. We are beginning to see evidence of this concerning BTC on the exchanges. My measly .07 BTC, if I hold it, will likely be of more value than if I were to spend it. Of course, buy low, sell high. If I had sold my pitiful quantity of BTC right before the September free fall (I didn't own any BTC at that time), I could have then re-invested back into BTC as it started to climb back up. Basic commodities trading 101. However, the desire is for one of the cryptocurrencies to rise above the others as a currency, something that has value in being used more often than being held, rather than being/becoming a repository for fiat value.

[Mike Christ]

I applaud your thinking on the matter and I will give it some thought before offering critique and making adaptations to my own thinking on the matter.

As for being "Silver to Bitcoin's Gold,".... I would politely remind people that all nations went off the gold/silver standards for a very good reason. The Great Depression in the USA happened, in part, because the country did not get off those metals as a standard soon enough. The short version for this was that the value of the medium became in hoarding rather than using/spending. We are beginning to see evidence of this concerning BTC on the exchanges. My measly .07 BTC, if I hold it, will likely be of more value than if I were to spend it. Of course, buy low, sell high. If I had sold my pitiful quantity of BTC right before the September free fall (I didn't own any BTC at that time), I could have then re-invested back into BTC as it started to climb back up. Basic commodities trading 101. However, the desire is for one of the cryptocurrencies to rise above the others as a currency, something that has value in being used more often than being held, rather than being/becoming a repository for fiat value.

The real reason was, you can't fund an empire without an exploitable currency.  Whatever else you're hearing is conjecture; there's no proof that people will generally starve themselves over their money; the Great Depression had nothing to do with whether one's money stored value or not.  Economies work perfectly well with money as a store of value, since they did, for long stretches of time; we can see clearly what happens to economies when currencies store no value, since we've been living it for forty years; you get a stark shift in wealth from those who do not have a money which stores value, and those who do.  We must then make one of two conclusions: "The economy of today is perfect and the best it will ever get", or "The economy of today is horrendous and it's nowhere close to its potential."  I tend to fall into the second camp.

Look at it this way: you have two objects, one is a currency and one is a money.  One does everything the other does, except it can store value.  Now, if you have money that can work as a currency, and you have currency that cannot work as a money, by what extension do you assume money, which has all the properties of a currency +1, cannot function correctly as a currency?

"My phone can make calls."
"Oh yeah well my phone can make calls and take pictures."
"That's a shame because you can't make calls while taking pictures, therefore you should get a second phone that can't take pictures so you can make calls."

Even if we coupled our money with a currency, we would still have to swap our money with the currency to use the currency.  It's a moot point then; we may as well just keep the money and spend that, instead.

[NUFCrichard]

I think something of increasing importance is that mining it does something useful.  Right now we have so much energy being wasted mining bitcoin, when nothing is achieved by mining )other than a capital gain).  Primecoin is a good example that something of use could be done with this mining power, but I tend to think something better could be done.

I am surprised that SETI didn't jump on it a while ago and make their project a coin (unless I missed something and that actually has happened).

[Adrian-x]

I think something of increasing importance is that mining it does something useful.  Right now we have so much energy being wasted mining bitcoin, when nothing is achieved by mining.

I am nice and warm today. If the waste heat from mining wasn't used you may have a point. (On the topic of keeping warm it isn't wasted if I value it.)

@ Rogue5pawn, once Britain has an empire and an almost monopoly on gold it stagnated while the new world switched to silver prior to WW1. Money is what it does and an economy is the measure. To think of the economy as a thing leads to the thought that it aught to be managed.

This forum is full of debate about inflationary economics v fixed value (aka deflationary economics) so not worth discussing here.

a finite unit of measure is needed if the Money meme is to persist, for those invested in Bitcoin this 21M cap is the holy grail.

[Rogue5pawn]

I think something of increasing importance is that mining it does something useful.  Right now we have so much energy being wasted mining bitcoin, when nothing is achieved by mining.

I am nice and warm today. If the waste heat from mining wasn't used you may have a point. (On the topic of keeping warm it isn't wasted if I value it.)

@ Rogue5pawn, once Britain has an empire and an almost monopoly on gold it stagnated while the new world switched to silver prior to WW1. Money is what it does and an economy is the measure. To think of the economy as a thing leads to the thought that it aught to be managed.

This forum is full of debate about inflationary economics v fixed value (aka deflationary economics) so not worth discussing here.

a finite unit of measure is needed if the Money meme is to persist, for those invested in Bitcoin this 21M cap is the holy grail.

21M cap minus 600k (thank you DPR and the FBI)..... minus an unknown quantity due to human error (spilled coffee on computer, fried hard drive and lost all backup wallet.dats, for example).... minus intentional destruction due to malice or whim.... and so on until so few remain that it fails as both a commodity and a currency. How does the blockchain heal from such things? Or do we just accept the fact of a dwindling oil supply... I mean "cryptocoin supply" as finite such that we will just have to create a new cryptocurrency once this one has failed?

Philosophically speaking, scarcity means limited resources, which in turn encourages a world view of lack, and what follows is a desire to hoard and not share, not spend... a detriment to all.

Ideas on this?: There has to be a way for the blockchain to heal over time and retain value by balancing scarcity with surplus.... I can only think of the suggestions I have made so far. Your thoughts?

[Adrian-x]

Philosophically speaking, scarcity means limited resources, which in turn encourages a world view of lack, and what follows is a desire to hoard and not share, not spend... a detriment to all.

Ideas on this?: There has to be a way for the blockchain to heal over time and retain value by balancing scarcity with surplus.... I can only think of the suggestions I have made so far. Your thoughts?

I share the conventional Austrian View.
If I die and take my Bitcoin to the grave, there is less Bitcoin to go around, in effect the productivity I contributed to the economy (my savings = Deferred consumption) is not realised, the Bitcoin economy as a whole benefits.

This can go on until there is just 1 Bitcoin left, and as it is infinitely divisible the system continues.   

Lost coins transfer there wealth to the savers.
Strictly speaking - the world is a finite place, when the tokens that describe it diminish their value increases.  (Deferred consumption is reworded, we have ecological sustainability)

increasing the tokens that describe a finite world, reword borrowers and those who consume the finite recourses before the others, it punishes those who defer consumption (savers) - the result is constant growth, with limited recourses = Ecological - Collapse

Bitcoin is beautiful because it allows the ecological sustainability model to flourish, according to the Math, you can't alter it, you can chose to use it or not, that's it. 

[Wipeout2097]

I'd like to see a useful proof-of-work, with algorithm like those one can find on BOINC projects

[mgio]

I'd like to see a useful proof-of-work, with algorithm like those one can find on BOINC projects

Why? What's the point. It just needlesses complicates the currency and becomes a potential point of weakness.

[mgio]

Here is another feature I'd like to see:

How about make it truly anonymous by adding zero knowledge proofs (like the Zero coin proposed addition to bitcoin)

[Rogue5pawn]

I share the conventional Austrian View.
If I die and take my Bitcoin to the grave, there is less Bitcoin to go around, in effect the productivity I contributed to the economy (my savings = Deferred consumption) is not realised, the Bitcoin economy as a whole benefits.

This can go on until there is just 1 Bitcoin left, and as it is infinitely divisible the system continues.   

How does having less of anything benefit a whole community/world economy? As in less air, less water, less food... less usable currency?

By the time there is only one BTC left, no one will value it, and before it ever gets too small of a quantity in circulation, another form of currency will have taken it's place. If it is "infinitely" divisible, then sill no one could spend it because of the Transaction Fee for too few bytes.

The beauty of this digital age and that of having a digital currency, as long as our species can produce electricity and microchip-thingies, we no longer need to live in a world of lack. We have seen time and again that those who "save" (deferred consumption) a large quantity of resources in a system of finite resources inevitably leads to a greater divide and disparity between the Haves and the Have-Nots. As long as the currency is based in the physical, then currency will always be a limited resource... doled out at the whim of a central and "wise" authority (when in fact, they could simply print as much as they want, because it's all based on "faith" anyway). A True Universal Cryptocurrency need not follow in the erroneous footsteps of its material predecessors.

We have the opportunity to create something completely new.... and Bitcoin, as the beta test it was intended to be, has show us the what could be possible, but Bitcoin, as in all evolutionary processes, is just the first in a whole new species.

I will stand by the idea of a self-healing currency of unending supply but of reasonably scarce generation; & one that encourages use/motion over a currency that only gains value from non-use/stagnation. I prefer to live for a future of, if not infinite resources, then one of perceived vast abundance, expansion, and more-ness.

[hamiltino]

You should concentrate on what's out at the moment and make your decision to invest based on the research you have done for the particular crypto-currency.

[Adrian-x]

How does having less of anything benefit a whole community/world economy? As in less air, less water, less food... less usable currency?

Less debt sounds good?  
We don't live in a scarcity world we live in a finite world of abundance with an infinite potential for more introversion.   Air, Water and food are physical, we can't make more Air or Water (well not anything worth mentioning) or land to grow food, so we need an economic system to allocate those recourses and encourage people to be more efficient with them, (there isn't more or less of them but for the idea that you have less at the expense of someone else)

Currency on the other hand is a meme, it is an idea, and if the idea is co-opted by man then it can be used to manipulate other men and thus give rise to a parasitic infection.  

So think of the economy, as the sum total of all actions of all participants in creating and allocating the finite wealth of the world, by measuring the exchange of currency.

When I earn currency I am contributing my labor or knowledge and in return receiving currency. If I have the currency, I can now redeem it  for someone else's labor and knowledge.

If I lose the currency then I have contributed to the economy, but I have not withdrawn from it. The net benefit goes to the economy, and the net loss to me who can't spend it. Debt based money is the opposite, the creator got the benefit and its loss means he doesn't need to honor the debt.

To keep to your OP - I am not going to argue whether or not the Perfect Altcoin should be inflationary or deflationary. That is best discussed in the 200,000 other hot threads on the topic.    

I am happy to contribute my ideas, but on this hot topic I am happy to trust Darwin and his theory of evolution. Debt based money is a dinosaur and a finite proof of work cryptographically, a P2P managed ledger, as a protocol for exchange of value are like the mammals scuttling among the behemoths, just before some catastrophe.

[shawshankinmate37927]

Altcoins as a commodity may not be a very good idea. Like the Gold Standards of yore, the more valuable an item becomes, the more likely people will desire to hoard the item rather than spend it.
This is essentially why governments went off the precious metal standards. What costs 2 BTC now will cost 1 BTC tomorrow and so on because no one will be willing to spend such a valuable item.

Would this "perfect altcoin" be competing with other currencies in the free market or would bankers and politicians dictate that everyone in their jurisdiction use it?  In a free society, where people are free to transact and save in whatever currency they choose, those who prefer to live below their means would just be buying bitcoins with the excess income they receive in this "perfect altcoin".

[Wipeout2097]

I'd like to see a useful proof-of-work, with algorithm like those one can find on BOINC projects

Why? What's the point. It just needlesses complicates the currency and becomes a potential point of weakness.

What's the point?? As I said, do useful work. I'm not sure how do you want me to explain

Is primecoin a bad idea? Does it complicate and made it a point of weakness.