Deflatory nature of Bitcoin - the problem and a possible solution

[thaaanos]

Well English is not my native language so please. When I mean Euro in Greece is appreciating, I mean Euro's value is appreciating against Greece's average household (given that most people own their house). What does euro "appreciating for me" means?

The probs in greece is not due to current euro deflation, it's due to greece borrowing too much in the past and greece can't pay it back because the econ is unproductive.

If you find Btc deflation objectionable use an alt coin with built in inflation. Btc doesn't have the built in problems of the euro yet because there in min debt in Btc.

Btc works because it is the coin that most people prefer right now.

The part about greece is oversimplification but Im not going to argue about it.
As long as I have the option of not beeing forced to trade my assets for bitcoins in the future I will be happy, but can you make that guarantie?

We certainly cannot guarantee that a country with a history of enforcing poor decisions and removing choice by mandate, will not ever do so with a completely free system like Bitcoin. Greece can do as it pleases.

Also, re: above, Austrians and Keynesians are both wrong, though Keynesians much more so because they have corrupted and ran with flawed iterations of Keynes' work. Much like Marx would shudder at the attempts to create a collectivist society, Keynes, who was raised in an age where the aristocracy was benevolent and generous, would be appalled.

The reasons come down to a quote by a personal hero, and one which I have spotted recently around the community. It is the truth, and the guiding principle of Bitcoin, whether users know it or not (which is the beauty and the point), and it is the answer to why I can care about politics and not vote, and why I spend all my time considering solutions and none of it lobbying. It was said by an amazing man, and a probable fellow DEC2 mutant:

You can never change things by fighting the existing reality. To change things, build a new model that makes the existing model obsolete. —R. Buckminster Fuller

Well then listen to your personal hero before you usher the world into a new Feudal age. You think deflation is moving forward? there is a perfectly good reason deflative economies don't exist: evolution

[diedicar]

but no one noticed that litecoin provides millions extracoins to the economy? how can you really belive that cryptocurrencies as a whole colud turn out to be actually deflationary? you'd better start thinking about it: what if litecoin succeds?

[thaaanos]

but no one noticed that litecoin provides millions extracoins to the economy? how can you really belive that cryptocurrencies as a whole colud turn out to be actually deflationary? you'd better start thinking about it: what if litecoin succeds?

Most cryptocurrencies that I know reward early miners disproportionaly, that is one problem independent of deflation or, and promote aristocracy which can cause serious political problems, which is why I propose a "Rolling" Blockchain

Deflation, or Inflation can be induced this way now by stretching or shrinking the Valid Blockchain Window. Maybe Invalidation threshold can be decided by a de'facto concessus between the Independent Private Invalidation Threshold that miners choose.

[FenixRD]

but no one noticed that litecoin provides millions extracoins to the economy? how can you really belive that cryptocurrencies as a whole colud turn out to be actually deflationary? you'd better start thinking about it: what if litecoin succeds?

EXACTLY THIS. Interestingly enough, without the power of a central regulatory agency, the market can and will decide exactly how inflationary or deflationary it wants its cryptocurrency ecosystem to be. Just as I said, oh, 50 posts back before we entered this flagellation.

Also, I'm about two pixels from ignoring thaaanos, which is something I *rarely* do.

[diedicar]

but no one noticed that litecoin provides millions extracoins to the economy? how can you really belive that cryptocurrencies as a whole colud turn out to be actually deflationary? you'd better start thinking about it: what if litecoin succeds?

EXACTLY THIS. Interestingly enough, without the power of a central regulatory agency, the market can and will decide exactly how inflationary or deflationary it wants its cryptocurrency ecosystem to be. Just as I said, oh, 50 posts back before we entered this flagellation.

Also, I'm about two pixels from ignoring thaaanos, which is something I *rarely* do.

Sorry but this is not an issue that market can "decide". Currency market is not like stock market's beauty contest, it follows the gresham's law so the ecosystem will be strongly inflationary given the infinite supply of "bad coins". Very difficult to guess what all this will eventually bring, but not deflation as it would be in a only bitcoin environment. Thaanaos, I'm interested in your rolling model, probably similar to my present thoughts. Could you expose some details? I'm a newbie so i'm just starting to think about it, having recently discarded the awful (to me, as an european) deflationary hypotesis.

[thaaanos]

Sorry but this is not an issue that market can "decide". Currency market is not like stock market's beauty contest, it follows the gresham's law so the ecosystem will be strongly inflationary given the infinite supply of "bad coins". Very difficult to guess what all this will eventually bring, but not deflation as it would be in a only bitcoin environment. Thaanaos, I'm interested in your rolling model, probably similar to my present thoughts. Could you expose some details? I'm a newbie so i'm just starting to think about it, having recently discarded the awful (to me, as an european) deflationary hypotesis.

look up here
https://bitcointalk.org/index.php?topic=398389.msg4348065#msg4348065

[thaaanos]

Also, I'm about two pixels from ignoring thaaanos, which is something I *rarely* do.

now what did I do that you feed the Troll inside me?

[Lloydie]

but no one noticed that litecoin provides millions extracoins to the economy? how can you really belive that cryptocurrencies as a whole colud turn out to be actually deflationary? you'd better start thinking about it: what if litecoin succeds?

Most cryptocurrencies that I know reward early miners disproportionaly, that is one problem independent of deflation or, and promote aristocracy which can cause serious political problems, which is why I propose a "Rolling" Blockchain

Deflation, or Inflation can be induced this way now by stretching or shrinking the Valid Blockchain Window. Maybe Invalidation threshold can be decided by a de'facto concessus between the Independent Private Invalidation Threshold that miners choose.

No. This is not correct.  Btc rewards early miners who spend their btcs when btcs reach a level that makes them feel wealthy. Over time, Btc distribution will become fairer. Anyway, Btc market is only $10 B for goodness sakes!

Credit money increases the gap between rich and poor because fiat is being devalued via asset price inflation.  This is the real problem causing inequality and the loss of social cohesion.

As mentioned before, take the rolling blockchain idea and build your own coin and see how many people use your inflationary coin. Not many will I suspect.

Don't try to fix what ain't broke.

[thaaanos]

but no one noticed that litecoin provides millions extracoins to the economy? how can you really belive that cryptocurrencies as a whole colud turn out to be actually deflationary? you'd better start thinking about it: what if litecoin succeds?

Most cryptocurrencies that I know reward early miners disproportionaly, that is one problem independent of deflation or, and promote aristocracy which can cause serious political problems, which is why I propose a "Rolling" Blockchain

Deflation, or Inflation can be induced this way now by stretching or shrinking the Valid Blockchain Window. Maybe Invalidation threshold can be decided by a de'facto concessus between the Independent Private Invalidation Threshold that miners choose.

No. This is not correct.  Btc rewards early miners who spend their btcs when btcs reach a level that makes them feel wealthy. Over time, Btc distribution will become fairer. Anyway, Btc market is only $10 B for goodness sakes!

Credit money increases the gap between rich and poor because fiat is being devalued via asset price inflation.  This is the real problem causing inequality and the loss of social cohesion.

As mentioned before, take the rolling blockchain idea and build your own coin and see how many people use your inflationary coin. Not many will I suspect.

Don't try to fix what ain't broke.

Please don't mix the issues here:
The rolling blockchain achieves 2 things
1: Justice (and don't naysay me period)
2: Discourages hoarding, will increase utility hence survivability
3: Act as recycling mechanism or a rolling reboot of the economy

A further improvement by decoupling invalidation and creation rates can provide
1: Control over inflating/deflating the economy the beauty here is that every miner can at this point play the role of a central banker by a tiny bit
 

[Lloydie]

but no one noticed that litecoin provides millions extracoins to the economy? how can you really belive that cryptocurrencies as a whole colud turn out to be actually deflationary? you'd better start thinking about it: what if litecoin succeds?

Most cryptocurrencies that I know reward early miners disproportionaly, that is one problem independent of deflation or, and promote aristocracy which can cause serious political problems, which is why I propose a "Rolling" Blockchain

Deflation, or Inflation can be induced this way now by stretching or shrinking the Valid Blockchain Window. Maybe Invalidation threshold can be decided by a de'facto concessus between the Independent Private Invalidation Threshold that miners choose.

No. This is not correct.  Btc rewards early miners who spend their btcs when btcs reach a level that makes them feel wealthy. Over time, Btc distribution will become fairer. Anyway, Btc market is only $10 B for goodness sakes!

Credit money increases the gap between rich and poor because fiat is being devalued via asset price inflation.  This is the real problem causing inequality and the loss of social cohesion.

As mentioned before, take the rolling blockchain idea and build your own coin and see how many people use your inflationary coin. Not many will I suspect.

Don't try to fix what ain't broke.

Please don't mix the issues here:
The rolling blockchain achieves 2 things
1: Justice (and don't naysay me period)
2: Discourages hoarding, will increase utility hence survivability
3: Act as recycling mechanism or a rolling reboot of the economy

A further improvement by decoupling invalidation and creation rates can provide
1: Control over inflating/deflating the economy the beauty here is that every miner can at this point play the role of a central banker by a tiny bit
 

Oh puhleassse, spare us.   Go build your own effing coin and prove to us it's better.  

What justice?  According to you?  Every single person who owns bitcoins CHOSE to use bitcoins. It's the ultimate democratic currency.  

As a Greek, you should have some idea about that instead of trying to ram your ideas down our throats.

[diedicar]

but no one noticed that litecoin provides millions extracoins to the economy? how can you really belive that cryptocurrencies as a whole colud turn out to be actually deflationary? you'd better start thinking about it: what if litecoin succeds?

Most cryptocurrencies that I know reward early miners disproportionaly, that is one problem independent of deflation or, and promote aristocracy which can cause serious political problems, which is why I propose a "Rolling" Blockchain

Deflation, or Inflation can be induced this way now by stretching or shrinking the Valid Blockchain Window. Maybe Invalidation threshold can be decided by a de'facto concessus between the Independent Private Invalidation Threshold that miners choose.

No. This is not correct.  Btc rewards early miners who spend their btcs when btcs reach a level that makes them feel wealthy. Over time, Btc distribution will become fairer. Anyway, Btc market is only $10 B for goodness sakes!

Credit money increases the gap between rich and poor because fiat is being devalued via asset price inflation.  This is the real problem causing inequality and the loss of social cohesion.

As mentioned before, take the rolling blockchain idea and build your own coin and see how many people use your inflationary coin. Not many will I suspect.

Don't try to fix what ain't broke.

Please don't mix the issues here:
The rolling blockchain achieves 2 things
1: Justice (and don't naysay me period)
2: Discourages hoarding, will increase utility hence survivability
3: Act as recycling mechanism or a rolling reboot of the economy

A further improvement by decoupling invalidation and creation rates can provide
1: Control over inflating/deflating the economy the beauty here is that every miner can at this point play the role of a central banker by a tiny bit
 

i was thinking a very similar model. il' think again. At a first glance yours seems very reasonable and self sustaining.

[kaito]

i was thinking a very similar model. il' think again. At a first glance yours seems very reasonable and self sustaining.

Well then look again.
His pros and cons are pulled out of his rear and he wants to "trust individual and collective human judgement" to decide the who gets to lose his coins.

[diedicar]

ok who pays after the last satoshi is mined for the blockchain manteinance? transaction fees. But why should this be big enough? why do not let the transactions free and remine the coins?

[kaito]

ok who pays after the last satoshi is mined for the blockchain manteinance? transaction fees. But why should this be big enough? why do not let the transactions free and remine the coins?

Big enough for what?
Free transactions means blockchain spam.
What does remine mean?

[diedicar]

ok who pays after the last satoshi is mined for the blockchain manteinance? transaction fees. But why should this be big enough? why do not let the transactions free and remine the coins?

Big enough for what?
Free transactions means blockchain spam.
What does remine mean?

the cost of transactions is equally divided in all existing bitcoins, as a deposit and manteinace cost. I do not think there will be spam, but if you please we can keep a very low transaction fee.

[Lloydie]

ok who pays after the last satoshi is mined for the blockchain manteinance? transaction fees. But why should this be big enough? why do not let the transactions free and remine the coins?

Big enough for what?
Free transactions means blockchain spam.
What does remine mean?

the cost of transactions is equally divided in all existing bitcoins, as a deposit and manteinace cost. I do not think there will be spam, but if you please we can keep a very low transaction fee.

If you're still alive in 2140, you can worry about this problem.  By that stage I think 1 Btc should be worth more than $1 Million in today's dollars.

Therefore, transaction fees will be plenty enough for low energy ASIC systems.

[diedicar]

ok who pays after the last satoshi is mined for the blockchain manteinance? transaction fees. But why should this be big enough? why do not let the transactions free and remine the coins?

Big enough for what?
Free transactions means blockchain spam.
What does remine mean?

the cost of transactions is equally divided in all existing bitcoins, as a deposit and manteinace cost. I do not think there will be spam, but if you please we can keep a very low transaction fee.

If you're still alive in 2140, you can worry about this problem.  By that stage I think 1 Btc should be worth more than $1 Million in today's dollars.

Therefore, transaction fees will be plenty enough for low energy ASIC systems.

if there will be an alt coin with 0 transaction fees, there will be no bitcoin in 2140.

[Lloydie]

ok who pays after the last satoshi is mined for the blockchain manteinance? transaction fees. But why should this be big enough? why do not let the transactions free and remine the coins?

Big enough for what?
Free transactions means blockchain spam.
What does remine mean?

the cost of transactions is equally divided in all existing bitcoins, as a deposit and manteinace cost. I do not think there will be spam, but if you please we can keep a very low transaction fee.

If you're still alive in 2140, you can worry about this problem.  By that stage I think 1 Btc should be worth more than $1 Million in today's dollars.

Therefore, transaction fees will be plenty enough for low energy ASIC systems.

if there will be an alt coin with 0 transaction fees, there will be no bitcoin in 2140.

In that case GTFO and go build your 0 transaction fee alt coin.  What are you waiting for?

[BurtW]

Quick question on the "rolling window" ideas:  what prevents me from simply periodically moving my hoarded coins to a new set of addresses?

[thaaanos]

i was thinking a very similar model. il' think again. At a first glance yours seems very reasonable and self sustaining.

Well then look again.
His pros and cons are pulled out of his rear and he wants to "trust individual and collective human judgement" to decide the who gets to lose his coins.

No in my idea bitcoins aquire a dimension of Age. Every time the Earliest mined bitcoins (the block that gets invalidated) are no longer a valid output so all transactions rooted to them get also invalidated when that block phases out.
The decision of inflating or deflating the economy is decoupled from the distribution or invalidation of the bitcoins

Quick question on the "rolling window" ideas:  what prevents me from simply periodically moving my hoarded coins to a new set of addresses?

as I said above the "moving" transaction will be invalid because it's inputs will be invalidated if they are rooted to a block that got off the rolling window.

That window is neccecary be small it can be say 49 years, so hopefully the bitcoins that will be invalidated are sufficiently diffused so no single person will feel the hit, Unless he is  hoarding of course. Essentially this gives greater value to freshed mined coins (they will last longer) and gives equall opportunities even to late adopters.

For those who like to keep bitcoin deflationary (for the right reasons - other than milking the Cash Cow) note that this way if the rate of invalidations=rate of mining the number of bitcoins can stay constant.