How to fix bitcoin

[gansett]

In my opinion bitcoin is a bad currency for common use.  My problem is that it does not encourage economic growth, it seems like the smarter bet is to always hold rather than spend (this is not a new idea in any way).  So what you end up with is a minimal amount of spending.  Now there's a lot of debate in that statement alone... but if you accept that a growing economy is better (at least at this point in time in history... which I believe it is because there are millions of people in this planet who do not even have the basic necessities)  Then what is needed is a currency that can adjust itself based on the current economic conditions.

Here's my idea.  Today the difficulty target is adjusted to try and release a block every 10 minutes or something along those lines (sorry if my memory is hazy).  Instead, A good currency should instead release blocks based on the supply and demand for currency.  In doing so, prices will fluctuate based on the supply and demand of products/commodities/services themselves as opposed to the demand for money.

As a programmer, i've been trying to think of a way I can use the quantity theory of money (mv = py) to adjust the difficulty target, so when the economy demands more coins (more are created) and when it needs less (less are created).

Just curious what you guys think?

[rayfloyd]

Miners arn't affected by prices or demand/offer. They process transactions, no matter the nature of those, be it buying games for charity (HumbleBundle), sending money to family, buying drugs or speculating.

The reason we hold bitcoins is because it's the future. The future ain't here yet though, once it's here, we'll be able to pay anything with them and that will be when it's a currency. As for getting there, I'm clueless.

[Mike Christ]

I think you're trying to solve a problem that doesn't exist.  Have you done any research on Freicoin?  I'll never use it but if you'd like a money that leaks, it's a sure bet.

[Ibian]

Screw your opinion.

[gansett]

Miners arn't affected by prices or demand/offer

Right, today this is true.  I believe its maybe possible to use the block chain to have a pretty good estimate of the terms needed though.

Here's a question for you... Why did it make sense for there to be thousands of coins generated a day when first bitcoin was first introduced (despite the fact no one was using it) but in 2013 now that some people are trying to use it, significantly less coins are generated.


Fricoin looks interesting, but while that solves the problem of velocity, it does so at the expense of allowing the currency to "hold value".  I think a good currency needs to find a compromise.

[Mike Christ]

Why do we need to "encourage economic growth"?  Are people not naturally inclined to growth?  Do we also need to encourage the seasons to change?

[gansett]

I think you're getting hung up on the word "encourage" perhaps facilitate would be better?  Basically when creating a new currency, our goal should be to create an environment where economic growth can thrive.  A deflationary currency where people fear spending it does NOT facilitate growth.

[Mike Christ]

I think you're getting hung up on the word "encourage" perhaps facilitate would be better?  Basically when creating a new currency, our goal should be to create an environment where economic growth can thrive.  A deflationary currency where people fear spending it does NOT facilitate growth.

Nobody fears spending; people fear spending irrationally.

When these new coins are unleashed onto the economy, how are they distributed?  If they're distributed evenly, the only way I can see it working fairly, then people are being fooled into believing they have more wealth than they really do, which would stimulate the economy but artificially, the "boom" as they say; once it is realized that this wealth didn't actually exist, you then have a "bust".  Is there any real reason people need to spend their hard-earned cash on things that don't matter?  For nobody saves to starvation; people have wants and needs, and when these wants and needs are met, coupled with an ever increasing population, you get economic growth.  I don't believe it's moral to artificially inflate a person's wealth to get them to give it up; it's trickery, to sum it up, and its only good (relatively speaking) in the event of an empire.

As I said, you're trying to solve a problem that isn't there; instead of putting a band-aid on the problem in the form of inflating/deflating the currency supply, why not solve the root of the problem by removing that which is harming the economy to begin with?  For if an economy is healthy, it wouldn't need any help, correct?

[Ibian]

I think you're getting hung up on the word "encourage" perhaps facilitate would be better?  Basically when creating a new currency, our goal should be to create an environment where economic growth can thrive.  A deflationary currency where people fear spending it does NOT facilitate growth.

Have you looked at the price graph at all? People are buying and selling every single day. Right now it's mostly speculators and people buying overpriced pizza, but eventually it will be an everyday currency.

[gansett]

but eventually it will be an everyday currency

Maybe it will be, but my question is... SHOULD it be?   It holds "value" pretty well, but my argument is that it does that at the expense of velocity, which I find undesirable.  I think velocity is important for growth, and I think growth is important for making peoples lives better.

[Ibian]

but eventually it will be an everyday currency

Maybe it will be, but my question is... SHOULD it be?   It holds "value" pretty well, but my argument is that it does that at the expense of velocity, which I find undesirable.  I think velocity is important for growth, and I think growth is important for making peoples lives better.

Forget your fiat theories. What matters is: Does it work? So far the answer is yes.

[justusranvier]

This thread should be moved to Altcoin discussion

[7queue]

I thought bitcoin was in the process of being 'Primed' until it reaches the Satoshi level of units for every day use?

8 )

[MoonShadow]

but eventually it will be an everyday currency

Maybe it will be, but my question is... SHOULD it be?   It holds "value" pretty well, but my argument is that it does that at the expense of velocity, which I find undesirable.  I think velocity is important for growth, and I think growth is important for making peoples lives better.

Maybe it will be, maybe it won't be.  It doesn't matter what should be.  That said, Bitcoin's max velocity is an order or two magnitude higher than fiat currencies in the absence of a working credit system.  Credit systems depend upon faith and trust a great deal more than even fiat currencies do, and history has shown that such trust is easily lost, and economies built upon readily available credit can break down even faster than they can grow.

[niothor]

When you try to fix something that is not broken you end up damaging it beyond repair.

[AnonyMint]

This thread should be moved to Altcoin discussion

Disagree. It is an economic inquiry, not the design of a specific altcoin.

The OP is misguided, because the QTM doesn't respond in the short-term to changes in M. There is no sense in trying to stabilize the short-term movements in the price.

The design of what he wants was already proposed and discussed in the past. Search the forums for "StableCoin". I studied the design and I am sure it would not work.

Rather the solution he essentially wants is already being discussed in my thread, and it is being developed, so he can just relax and close this thread.

When you try to fix something that is not broken you end up damaging it beyond repair.

Bitcoin is broken for spending and "always" will be. Read the above linked thread to become knowledgeable.

[gansett]

Oh hi AnnoyMint, I appreciate your response... but I respectfully ask for further clarification.

The OP is misguided, because the QTM doesn't respond in the short-term to changes in M. There is no sense in trying to stabilize the short-term movements in the price.

I see someone spent 2 seconds to maybe at least the wikipedia page for the theory.. cool... I would be interested in more details on why you think its misguided to try and stabilize the currency?

The design of what he wants was already proposed and discussed in the past. Search the forums for "StableCoin". I studied the design and I am sure it would not work.

So I spent some time reading that thread... i guess I interpret it differently, because that seems like a completely different idea.

[jojo69]

fine, go play with some derpcoin then you Keynesian fuck, I'll tell you right now your ideas are not going to be incorporated into bitcoin

"fix" indeed

[AnonyMint]

Oh hi AnnoyMint, I appreciate your response... but I respectfully ask for further clarification.

The OP is misguided, because the QTM doesn't respond in the short-term to changes in M. There is no sense in trying to stabilize the short-term movements in the price.

I see someone spent 2 seconds to maybe at least the wikipedia page for the theory.. cool... I would be interested in more details on why you think its misguided to try and stabilize the currency?

I am more deeply studied on QTM than you may know.

My analysis is there is no way to stabilize the short-term price, such attempts will either fail or end up as pernicious runaway trend towards $0 or infinity. I care not to explain it in great detail at this time, because I am too busy.

you Keynesian fuck

You are confusing government spending with preventing monetary gridlock.

I am a minanarchist, which means I want the smallest government possible. But again you need to understand the "two choices". Either we dilute the hoarders, or the government will. Because monetary gridlock is not acceptable to society.

So I am thus proposing to stop Keynesianism, whereas by supporting Bitcoin you are proposing to perpetuate it. Isn't it ironic how ButtCON causes you to support what you are against, by playing on your ignorance.

If you can't see the ButtCON image below, click here.

[niothor]

@AnonyMint
So it's not a currency , what's the problem? It's a store of value ? It'a a commodity?
People use it , and if they do use it it means it's not broken but useful.