Bitcoin Forum
December 07, 2016, 10:34:56 PM *
News: To be able to use the next phase of the beta forum software, please ensure that your email address is correct/functional.
 
   Home   Help Search Donate Login Register  
Pages: « 1 [2] 3 4 5 6 7 8 9 10 »  All
  Print  
Author Topic: A Better Coin  (Read 11092 times)
SgtSpike
Legendary
*
Offline Offline

Activity: 1344



View Profile
August 11, 2011, 08:40:16 PM
 #21

The early adopter problem isn't a problem. This has been discussed to death and I suggest you search the forum.

The deflationary spiral problem isn't a problem. This has been discussed to death and I suggest you search the forum.

The psychological barrier to entry problem needs further explanation. It's not obvious what you mean.

The miners dropping out due to lack of transaction fees problem is only a theoretical problem. This has been discussed to death and I suggest you search the forum.

I agree these are mild or non-problems. The real problem is the raising of capital. It is extremely difficult to raise capital with a deflationary currency because the risk of investors is way too high. Most of the time it will be better to just keep your coins in your wallet so it's impossible to reconcile financial markets with deflation, they just don't work together.
They are problems.  But I will revise the deflationary spiral problem to just "problems with a deflationary currency", because there are several problems with it (lack of investment being one).
1481150096
Hero Member
*
Offline Offline

Posts: 1481150096

View Profile Personal Message (Offline)

Ignore
1481150096
Reply with quote  #2

1481150096
Report to moderator
1481150096
Hero Member
*
Offline Offline

Posts: 1481150096

View Profile Personal Message (Offline)

Ignore
1481150096
Reply with quote  #2

1481150096
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1481150096
Hero Member
*
Offline Offline

Posts: 1481150096

View Profile Personal Message (Offline)

Ignore
1481150096
Reply with quote  #2

1481150096
Report to moderator
SgtSpike
Legendary
*
Offline Offline

Activity: 1344



View Profile
August 11, 2011, 08:48:26 PM
 #22

The early adopter problem isn't a problem. This has been discussed to death and I suggest you search the forum.

The deflationary spiral problem isn't a problem. This has been discussed to death and I suggest you search the forum.

The psychological barrier to entry problem needs further explanation. It's not obvious what you mean.

The miners dropping out due to lack of transaction fees problem is only a theoretical problem. This has been discussed to death and I suggest you search the forum.

I agree these are mild or non-problems. The real problem is the raising of capital. It is extremely difficult to raise capital with a deflationary currency because the risk of investors is way too high. Most of the time it will be better to just keep your coins in your wallet so it's impossible to reconcile financial markets with deflation, they just don't work together.
I'll just give some quick points on why each of them is a problem.

Early adopters.  Well, if Bitcoins were to replace all currencies worldwide, and only 21 million coins were ever produced, then Satoshi, with his supposed 1.5 million coins, would hold approximately 7% of the world's currency.  And you don't see that as a problem?  Even if we only consider US money supply, which is around $14T, he would be holding $1T.  I know I am not the only person who has a problem with that, and I am sure enough people would have a problem with it to prevent mass adoption of Bitcoins.  It's not that I would be upset that he had that much money, it's that I don't want to see anyone with that much power over the currency.

Deflationary spiral was shown as a problem during the great depression, when the dollar was based on a gold standard.  While it may not have been deflationary, it was certainly less inflationary than the currency we have today.  The country entered into a depression, along with many other countries, and each country only recovered when it started printing more money.  Also, as you have pointed out, raising capital for new innovations or companies will be extremely difficult while using a deflationary currency because the opportunity costs are so high.

Psychological barrier is already a problem - people won't generally want to pay $100 or $1000 for a single coin, just because it is a psychologically "bad deal".  This means that Bitcoins are limited as to who will adopt them and to what extent.

Miners dropping out WILL happen with the current Bitcoin model, and we will not have enough miners to secure the wealth in the blockchain, unless transaction volume grows by at least 100 fold (1000 fold to reach the current security level after all block rewards have diminished).
tombc
Newbie
*
Offline Offline

Activity: 25


View Profile WWW
August 11, 2011, 09:33:31 PM
 #23

I'm going to release a new currency in few month and the distribution is a real problem, need to find the perfect balance.
For the moment i choosen to give a reward (near)proportional to the target, maybe i'll give a ~4% per year for 20years instead then decrease slowly if there is enough
early adopters.

The best way would be to find investors to back a bit the currency at launch, but it'll be hard (despite some technical breakthrough done recently) and all need to stay free and open

I'm still working in the shadows and looking the community point of views on this kind of subjects, protocol specifications and implementation (win7/Linux/Mac, iOS/android a bit later once Qt will be stable on these platforms) will be release all at once, the public review will then start and many tweaks will be done
SgtSpike
Legendary
*
Offline Offline

Activity: 1344



View Profile
August 11, 2011, 09:48:16 PM
 #24

I'm going to release a new currency in few month and the distribution is a real problem, need to find the perfect balance.
For the moment i choosen to give a reward (near)proportional to the target, maybe i'll give a ~4% per year for 20years instead then decrease slowly if there is enough
early adopters.

The best way would be to find investors to back a bit the currency at launch, but it'll be hard (despite some technical breakthrough done recently) and all need to stay free and open

I'm still working in the shadows and looking the community point of views on this kind of subjects, protocol specifications and implementation (win7/Linux/Mac, iOS/android a bit later once Qt will be stable on these platforms) will be release all at once, the public review will then start and many tweaks will be done
Interesting.  Perhaps the most important thing is to make sure you have a very defined schema for distribution before starting the blockchain, and making sure you stick to it.  If there's anything that will devalue a currency down to nothing, it's the insecurity in knowing that the distribution rules may be changed, and could mess with the value of your holdings.  It is vital to have that decision made before any mining or transactions begin, and equally as vital that it NEVER changes.  Just imagine what would happen to Bitcoin's value if we suddenly decided to give out 21 billion coins instead of million?

Also, don't make anything arbitrary or up to someone's subjective opinion.  You mentioned "then decrease slowly if there is enough early adopters."  If that is your plan, then define exactly what makes up "enough", how the number of early adopters will be determined, who will be double-checking the number of early adopters, etc.  There could be a lot of financial incentive to NOT have the reward reduced, and people WILL try to fudge the numbers accordingly, so you have to have checks in place to ensure nothing like that happens.  But hopefully, you've already thought of all of this, and your statement was only generic in the interest of keeping it concise.  Wink
tombc
Newbie
*
Offline Offline

Activity: 25


View Profile WWW
August 11, 2011, 10:17:45 PM
 #25

Yes, i won't trick the users, there will be a public beta on a test chain, we'll choose the distribution scheme then launch the official chain.
SgtSpike
Legendary
*
Offline Offline

Activity: 1344



View Profile
August 11, 2011, 10:19:04 PM
 #26

Yes, i won't trick the users, there will be a public beta on a test chain, we'll choose the distribution scheme then launch the official chain.
Sounds like a good way to go about it.  Wink
joiner
Newbie
*
Offline Offline

Activity: 12


View Profile
August 11, 2011, 10:58:39 PM
 #27

SgtSpike, you certainly have raised a very interesting topic. Bitсoin is an experiment. But the experiment is very good and important. Maybe it has some drawbacks which will be future problems. At the heart of bitkoin is not mining and not even trust. At the heart of bitcoin is greed.
  point by point:
1) A person at risk. I learned about bitcoin in March 2010. I decided that this is a stupid thing. There were people who simply liked the idea. But there were far-sighted people. They have invested money in the CPU (and later in the GPU). And now they are reaping the benefits. Although they can and lose money.
2) The Psychology of a complicated thing.
2.1) It is possible that the current nominal bitcoin a certain value. A pleasure to hold in their hands a large coin than a little. Although if the coin is too big, then it will not be easy to use.
2.2) If you had said in 1960 that an ounce of gold will give $ 1,800 he would have laughed.
3) Greed is good.
3.1) People buy coins for one reason only. They are hoping that tomorrow they will grow in value. No higher power is not here. Perhaps you think that people buy at the price of farm Mining 20k $ for the idea, but actually it is not. They just want to make a profit on it. Deflation is a good
3.2) Assume all the money in the world to become the bitcoin. And bitсoin continue to grow. (Ie a BTS today = 1 iPhone, one month 1bts= 2 iPhone ). Why do I make iPhone for example, if I can just wait for the higher cost bitcoins? Deflation is bad.

If I know that tomorrow the price will fall to bitсoin I never buy it. Already wrote that in high inflation need to spend money, but nowhere to spend it. Nobody would buy the coins in the hope that in 10 years they will be accept in all world. Even if it's true.With hyperinflation, the price falls. If the price falls do not profit from the purchase of coins. If there is no profit no one buys them.
 Underlying profit bitcoin (greed), but not an idea. Capitalism is a profit. Communism is an idea. The question which of them is dead?

 P.S thanks to google for google translate=)
JohnDoe
Sr. Member
****
Offline Offline

Activity: 392



View Profile
August 11, 2011, 11:11:37 PM
 #28

I'm going to release a new currency in few month and the distribution is a real problem, need to find the perfect balance.
For the moment i choosen to give a reward (near)proportional to the target, maybe i'll give a ~4% per year for 20years instead then decrease slowly if there is enough
early adopters.

The best way would be to find investors to back a bit the currency at launch, but it'll be hard (despite some technical breakthrough done recently) and all need to stay free and open

I'm still working in the shadows and looking the community point of views on this kind of subjects, protocol specifications and implementation (win7/Linux/Mac, iOS/android a bit later once Qt will be stable on these platforms) will be release all at once, the public review will then start and many tweaks will be done

If you tie the reward to the target it would make inflation unpredictable and it could lead to serious hyperinflation with technological breakthroughs like quantum computing. Personally I'd prefer to make the reward proportional to the current money supply to ensure a predictable growth, with a minimum reward for the initial years of course.

Also I think that a ~4% or less yearly growth in the supply is a little low. If the GDP growth of the economy is over 4% then there would be deflation in prices that year. I'd go with a permanent 10% to give some more breathing space.
markm
Legendary
*
Offline Offline

Activity: 1792



View Profile WWW
August 11, 2011, 11:12:30 PM
 #29

Blockchains themselves might work for raising capital, the main technical problem being how to secure them since trying to start up a company by first buying fleets of armoured cars and hordes of pinkerton chaps and so on probably takes a big bite out of any capital you do manage to raise.

Either merged mining or using only a private network during startup might solve the security problem.

Maybe hashing will get cheaper and cheaper and cheaper as pools allowing hundreds or thousands of blockchains to all be mined at once spring up, continuing to pay miners a little over the cost of electricity so that highly efficient mining operations are able to afford their shareholders a small amount of profit over the long term.

(Though presumably the armed guards industry along with the theft industry will between them conspire to ensure security is never as cheap as it might be in the absence of large numbers of people who feel that their willingness to bear arms entities them to a share of everyone else's wealth and large numbers of people who feel that their cleverness at circumventing security entities them to a share of everyone else's wealth.)

Maybe we could experiment to find out how much customers feel is enough to spend on security? We could make ten otherwise identical services each of which take a percent of all deposits and all withdrawals to put aside as a disaster fund to be used to cover losses in the event customer funds are stolen etc. A range, 1% set aside to 10% set aside. Let customers choose which of the ten services to patronise.

General Mining Corp and General Retirement Funds both use a blockchain approach to raising capital. Their assets and cashflow determine how much they can afford to purchase the coins of their blockchain for and sales of the coins of their blockchain provide cashflow and assets.

In both cases the coins are not "common shares"; they have no vote. The coins do help cushion their customers against fluctuations in other currencies though, because the corps can price resources, land and services in terms of their own coins.

They might also serve as a way of "simplifying" the paying of interest by those to whom they loan the coins, because instead of tracking how much interest each debtor owes based on when the loan was taken out the buying power of the coins can be increased over time, thus effectively implementing interest even for debtors who borrowed the coins from someone else entirely instead of borrowing them from the corp.

(There has been discussion suggesting that the corps waive the 1% per day interest their initial debtors took on, due to the rapid rise in buying power of the coins. Basically the amount of actual resources the debtors end up paying can still be as much as if they were paying interest of 1% per day, but its mechanism could be the price at which their resources are valued by the time they bring resources with which to pay their debts instead of (or worse, *also*) daily interest on the loan-as-measured-in-coins.)

The way this can work with a deflationary coin such as Bitcoin is to denominate loans in terms of a unit created specifically for the context of the loan. (Maybe common shares as in GLBSE, or preferred shares, or gift certificates / resource certificates redeemable for specific types of goods or resources).

For example to raise capital for an oil well one could create an oilcoin blockchain in which each coin will be redeemable for 1/21000000 of the oil produced, or even 1/21000000 of the oil produced on the day that the coin is redeemed so that if production increases the coin can be redeemed for more than it could while production was low.

So I think the purported problems of deflationary currencies with regard to raising capital are maybe just limiting the box in which they think too much. The deflation is the raising of capital by the currency in question - its backers or issuers or early adopters or even simply its holders. It already *is* raising capital. To raise other or different capital or capital for another or different purpose or project simply create another distinct different deflationary "currency" for the new purpose or project.

-MarkM-

Browser-launched Crossfire client now online (select CrossCiv server for Galactic  Milieu)
Free website hosting with PHP, MySQL etc: http://hosting.knotwork.com/
SgtSpike
Legendary
*
Offline Offline

Activity: 1344



View Profile
August 11, 2011, 11:25:19 PM
 #30

SgtSpike, you certainly have raised a very interesting topic. Bitсoin is an experiment. But the experiment is very good and important. Maybe it has some drawbacks which will be future problems. At the heart of bitkoin is not mining and not even trust. At the heart of bitcoin is greed.
  point by point:
1) A person at risk. I learned about bitcoin in March 2010. I decided that this is a stupid thing. There were people who simply liked the idea. But there were far-sighted people. They have invested money in the CPU (and later in the GPU). And now they are reaping the benefits. Although they can and lose money.
2) The Psychology of a complicated thing.
2.1) It is possible that the current nominal bitcoin a certain value. A pleasure to hold in their hands a large coin than a little. Although if the coin is too big, then it will not be easy to use.
2.2) If you had said in 1960 that an ounce of gold will give $ 1,800 he would have laughed.
3) Greed is good.
3.1) People buy coins for one reason only. They are hoping that tomorrow they will grow in value. No higher power is not here. Perhaps you think that people buy at the price of farm Mining 20k $ for the idea, but actually it is not. They just want to make a profit on it. Deflation is a good
3.2) Assume all the money in the world to become the bitcoin. And bitсoin continue to grow. (Ie a BTS today = 1 iPhone, one month 1bts= 2 iPhone ). Why do I make iPhone for example, if I can just wait for the higher cost bitcoins? Deflation is bad.

If I know that tomorrow the price will fall to bitсoin I never buy it. Already wrote that in high inflation need to spend money, but nowhere to spend it. Nobody would buy the coins in the hope that in 10 years they will be accept in all world. Even if it's true.With hyperinflation, the price falls. If the price falls do not profit from the purchase of coins. If there is no profit no one buys them.
 Underlying profit bitcoin (greed), but not an idea. Capitalism is a profit. Communism is an idea. The question which of them is dead?

 P.S thanks to google for google translate=)
If I understand the general sentiment of your thoughts here, you are saying that deflation is necessary for adoption, but inflation (or at least noflation) is necessary for it to be usable.

I really agree with you.  That's why it would be a challenge to get something like this off the ground.  A currency can't be deflationary, or it leads to too much hoarding and too little investment/innovation, but it can't be inflationary, or no one will want to buy it or use it.

MarkM - interesting thoughts, but what is your point?  Sounds like a lot of centralization for a decentralized project..?
JohnDoe
Sr. Member
****
Offline Offline

Activity: 392



View Profile
August 12, 2011, 12:05:00 AM
 #31

@markm: What's the difference between issuing shares in GLBSE and creating your own blockchain to raise capital? The outcome is the same in that the people who invest in oilcoins with BTC probably won't get a return on their investment. This is because when the purchasing power of BTC increases, the revenue and the value of the assets of OilCorp decrease in terms of BTC, so the dividends and price of the shares will become ever lower BTC-wise.
markm
Legendary
*
Offline Offline

Activity: 1792



View Profile WWW
August 12, 2011, 12:26:08 AM
 #32

@markm: What's the difference between issuing shares in GLBSE and creating your own blockchain to raise capital? The outcome is the same in that the people who invest in oilcoins with BTC probably won't get a return on their investment. This is because when the purchasing power of BTC increases, the revenue and the value of the assets of OilCorp decrease in terms of BTC, so the dividends and price of the shares will become ever lower BTC-wise.

GLBSE seems to involve "common shares", so maybe by buying over half the shares you might be able to improve your chance of earning if you can run the company more profitably than the current management of the company.

Bitcoin has not always only gone up in value. It has also dipped down from time to time. having other blockchains could allow rapid moving from chain to chain so one can actually "play the market" without all the overhead crap/garbage/hassle involved when fiat is involved.

I originally happened upon Bitcoin in the course of searching for code that would enable players to have an actual stock exchange / forex / commodities exchange in each Freeciv city in which such an edifice was built, so that insteadf of merely having an abstraction "there is a stock exchange in that city, it adds X amount to the city's income" there could be complete stock trading games players could participate in even if they have no interest in the political or military or other levels of games that could be taking place on that same world.

I suspect part of why Bitcoin has been thought of as a ponzi scam and so on and so on is because it was never tried out first as games with the games gradually being taken more and more seriously by the players, gradually attracting more players, all the time dealing with various attackers and hackers and so on so that by the time people started to think of it as being maybe not so much a game currency as a real currency most of the problems we have seen would already have been met and dealt with in the context of well for gosh sakes dont get so upset it is just a game instead of people dropping their savings into it already before it was even run at high volume with large amounts of coins and large numbers of players and gradually increasing incentive for someone to see "lulz" in screwing it up / hacking it /stealing coins etc.

If a company represented by another blockchain had bought Bitcoins any time they went down in price and sold them any time they went up above what the company paid for them, whether measured in company shares/coin or in various other assets or currencies, I do not see why the companies would automatically "have to" lose money even if you insist that gain or loss has to be measured in bitcoins.

In fact as long as the number of Bitcoins the company owns increases surely the value of its assets, and thus of whatever unit of measure one uses to measure or account its assets, has increased, at least in terms of bitcoins. (Even if Bitcoins go down so that its total worth is down in terms of other measures, if it has more Bitcoins than it started with then from a Bitcoin perspective it has increased in value, hasn't it?)

-MarkM-


Browser-launched Crossfire client now online (select CrossCiv server for Galactic  Milieu)
Free website hosting with PHP, MySQL etc: http://hosting.knotwork.com/
joiner
Newbie
*
Offline Offline

Activity: 12


View Profile
August 12, 2011, 12:38:59 AM
 #33

Yes it is. But there is one obvious problem in the way of the existence of an alternative currency. This bitkoin. The system rests on the miners, the miners dig for profit. The problem lies in the change of every 2016 blocks. Suppose we have 1ghash \ 24 = 1btc = $ 10 so we have 1ghash \ 24 = 1000 alternative currency (AC) = $ 15. It turns out alternative currency became more profitable than the BTC. Miners will get AC. Complexity of AC will grow very strongly. (As it was with namecoin) After 1ghash \ 24 of AC <$ 10 miners leave. And that would find the following items in 2016 blocks may take years
JohnDoe
Sr. Member
****
Offline Offline

Activity: 392



View Profile
August 12, 2011, 01:15:04 AM
 #34

Yes it is. But there is one obvious problem in the way of the existence of an alternative currency. This bitkoin. The system rests on the miners, the miners dig for profit. The problem lies in the change of every 2016 blocks. Suppose we have 1ghash \ 24 = 1btc = $ 10 so we have 1ghash \ 24 = 1000 alternative currency (AC) = $ 15. It turns out alternative currency became more profitable than the BTC. Miners will get AC. Complexity of AC will grow very strongly. (As it was with namecoin) After 1ghash \ 24 of AC <$ 10 miners leave. And that would find the following items in 2016 blocks may take years

This is solved by using merged mining. If this currency were created it would probably be ready for merged mining since block 1.
cunicula
Hero Member
*****
Offline Offline

Activity: 756


Stack-overflow Guru


View Profile WWW
August 12, 2011, 01:47:48 AM
 #35

Your proposal does nothing to solve the core volatility issue. You nedd to link coin generation to difficulty and allow txn fees to be destroyed if too many coins are made. If you just arbitrarily specify a fixed schedule, sometmes you will make too many coins and price will fall. Sometimes you will make too few coins and price will rise. The volatility poses too much risk to users.

▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁
        AltCoinInternalExperts                Get Your Altcoin Promoted On Social Media       
▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔
gsan
Member
**
Offline Offline

Activity: 72


View Profile
August 12, 2011, 01:48:08 AM
 #36

SgtSpike, I don't agree with the core idea (because of the incentive issue, which I think is one of the brilliant things about Bitcoin), but since this has been proposed lots of times before, I have a suggestion. Forgive me if it's redundant.

IMO, the early adopter problem does not exist because of decreasing coins per block, it exists because of constant production. Even though coins generated per block hasn't yet changed, people are already complaining about it. I'm sure people will complain about decreasing production in the following years, if Bitcoin survives, however I think difficulty will still be the dominant issue.

You can solve this problem by keeping the coins per difficulty constant. We can't keep the difficulty constant without changing minutes per block, so what I propose is to award miners with difficulty number of coins (e.g. when I solve a block while the difficulty is 512, I get 512 coins). This way, blocks can still be adjusted to be generated in constant intervals using difficulty, but award per hash will never change. With the advancement in technology, it will probably result in an exponential generation like your proposal, but it will be continuously and fairly adjusted.

JohnDoe
Sr. Member
****
Offline Offline

Activity: 392



View Profile
August 12, 2011, 02:36:27 AM
 #37

@cunicula and gsan: Linking the reward to difficulty would produce hyperinflation as computing becomes faster and cheaper. A better, more stable way is to make the reward a percentage of the total money supply so you can target a predictable annual expansion, say 5 to 8%.
cunicula
Hero Member
*****
Offline Offline

Activity: 756


Stack-overflow Guru


View Profile WWW
August 12, 2011, 03:52:49 AM
 #38

To the extent that computing improvements are predictable, they are not a problem. In my formulation, the system generates more coins than it destroys (via txn fees) if difficulty grows more rapidly than 50% per year, and destroys more coins than it generates if difficulty grows less rapidly than 50% per year. A permanent base difficulty is set based on the first three months of operation and the average annual difficulty growth rate up to the present is calculated from there. Since computing improvements might be faster or slower than 50% per year, this will not achieve a perfect link between long-run electricity prices and coin prices. Nonetheless, the link should be pretty close and that is all that is needed.




▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁
        AltCoinInternalExperts                Get Your Altcoin Promoted On Social Media       
▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔
memvola
Hero Member
*****
Offline Offline

Activity: 896


View Profile
August 12, 2011, 01:13:59 PM
 #39

In my formulation, the system generates more coins than it destroys (via txn fees)
Maybe I got it wrong, but isn't this easy to circumvent? Just use other ways to exchange coins (bills, banks, interbank protocols, etc.).

@cunicula and gsan: Linking the reward to difficulty would produce hyperinflation as computing becomes faster and cheaper. A better, more stable way is to make the reward a percentage of the total money supply so you can target a predictable annual expansion, say 5 to 8%.
Wasn't hyperinflation what OP was aiming at? Cheesy

What you suggest is a mild exponential inflation. Besides the "incentive" issue (which I think we are disregarding for the sake of argument), it still doesn't prevent early adopter, ahem, "problem". Early miners would still have lots and lots of coins, because, if you consider the evolution of Bitcoin, the difficulty could (and would) increase 1000-fold after it goes mainstream. Assuming difficulty stays parallel with technological advancement after that, with %5 annual increase in inflation (105% inflation total), it would take 141 years for it to match early adopters' advantage.
markm
Legendary
*
Offline Offline

Activity: 1792



View Profile WWW
August 12, 2011, 03:26:43 PM
 #40

A blockchain is similar to shares in that way.

When you do an Initial Public Offering of shares, the "early adopters" get the majority of the shares.

That is not considered a bug, it is considered a feature.

Coins of a blockchain are thus basically very easily traded shares.

The big problem of course, is what is it that they are shares of.

This is why so often the idea of having them "backed somehow" tends to come up.

-MarkM-

Browser-launched Crossfire client now online (select CrossCiv server for Galactic  Milieu)
Free website hosting with PHP, MySQL etc: http://hosting.knotwork.com/
Pages: « 1 [2] 3 4 5 6 7 8 9 10 »  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!