Deflatory nature of Bitcoin - the problem and a possible solution

[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
 

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.

Well if you find *Just* the fact that one can live off without working by spending diminishing fractions of this stash, then maybe we could all do it then and see what happens... Can I choose that?

Choice? Really? just as you have a choice of not using Google or Microsoft or Facebook? Sure I still have a choice to live in a hut in the woods hunting vermins.

[kaito]

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.

I'm sorry but the idea is just bad, it's a non-starter. Aside from the disgusting central planning, a) this can still hit just one person who sold a house, b) people can still "launder" their coins by sending them to mixing services and exchanges, having other people share or take up the whole loss. Or people would value newer coins higher and make them non-fungible.

Choice? Really? just as you have a choice of not using Google or Microsoft or Facebook? Sure I still have a choice to live in a hut in the woods hunting vermins.

Yes, really. Choices have consequences and most of the time you don't get to change them.

Seriously, with your mindset, I wonder what you'd even want with bitcoin. You seem like you should be perfectly happy with fiat. You have your trusted individuals and collective judgement that do the right thing™ for the economy! And you even have lots of inflation coming, isn't that what you want?

[BurtW]

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.

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.

Thanks! You just reminded me why I hate the economics forum and every stupid thread about "fixing" Bitcoin.  You do not have the slightest clue as to how the Bitcoin protocol works or how Bitcoin transactions work or how your idea will never work.

One more thing before I go back to the technical discussions where I belong:  all this talk about "changing Bitcoin" is a total joke.  Any substantial change to Bitcoin is a new coin by design.  You cannot change Bitcoin in any substantial way.  You are discussing alt coins:  InflatoCoin, TaxCoin, TheftCoin, MagicVanishCoin, or whatever.  You are not discussing Bitcoin.  The only changes that will ever be made to Bitcoin are small technical improvement that can be done within the established protocol.

EDIT:  Darn, I screwed up my edit and lost some text.  Something like "Good bye and good luck, etc."
  

[diedicar]

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.

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.

  Time will tell who is right.

mark your post. bitcoin is just like myspace, in no way you can pretend technology stops from improving. litecoin is ALREADY ramping with very good volumes. Or you think it will fail? why should it fail?

[BurtW]

mark your post. bitcoin is just like myspace, in no way you can pretend technology stops from improving. litecoin is ALREADY ramping with very good volumes. Or you think it will fail? why should it fail?

I never said that all alts will fail, some may do ok, most are still born - especially all the ideas in this thread.  I said I am betting on Bitcoin and you can bet on whatever alt you choose.

[sdp]

he answer I propose are variable transaction fees. The variable percentage of these fees would be proportional to the duration an individual has held on to the Bitcoins in his or her wallet.

We have variable transaction fees but this is the exact opposite to the relationship established for them.  So you don't keep sending tiny amounts to yourself in order to make Bitcoin unusable, there is a minimal time you need to hold on to the coins before you can spend them without a fee for amounts under a certain minimum amount.

See the wiki article on bitcoin transaction fees.  https://en.bitcoin.it/wiki/Transaction_fees

If you do implement the idea in an altcoin I can save by sending the coin to myself.  Your idea is impossible unless you link real identity to private keys, and if you need to do that you no longer can have a decentralized computer application.

sdp

[diedicar]

no transaction fees (every other means of payment iscrewed in no time) finite quantity of coins, every wallet looses some coins, in percentage to the holdings, that go to miners: they actually "remine" the coins. Just an embryonal idea. The miners "steal" from steady accounts, but they do not "steal" for transaction fees. A very liquidity premium.

[Kungfucheez]

Think you meant "Deflationary" OP

[thaaanos]

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.

I'm sorry but the idea is just bad, it's a non-starter. Aside from the disgusting central planning, a) this can still hit just one person who sold a house, b) people can still "launder" their coins by sending them to mixing services and exchanges, having other people share or take up the whole loss. Or people would value newer coins higher and make them non-fungible.

Choice? Really? just as you have a choice of not using Google or Microsoft or Facebook? Sure I still have a choice to live in a hut in the woods hunting vermins.

Yes, really. Choices have consequences and most of the time you don't get to change them.

Seriously, with your mindset, I wonder what you'd even want with bitcoin. You seem like you should be perfectly happy with fiat. You have your trusted individuals and collective judgement that do the right thing™ for the economy! And you even have lots of inflation coming, isn't that what you want?

Where in my proposal you see Central Planning? Are you having halucinations?
a) So maybe he would choose freshly minted coins on his contract? or a basket of mixed age coins?
b) People are going to *trade* older coins for newer coins at market rates in the exchanges
c) Idealy the loss would be shared accross all wallets, given sufficient diffusion over a timeframe of say 42 years.

So yeah ok I still have faith in human judgement, I don't want my life to be dictated by an algorithm. Me Bad. I don't see any inflation coming my way, I could use a couple of points.

[thaaanos]

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.

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.

Thanks! You just reminded me why I hate the economics forum and every stupid thread about "fixing" Bitcoin.  You do not have the slightest clue as to how the Bitcoin protocol works or how Bitcoin transactions work or how your idea will never work.

One more thing before I go back to the technical discussions where I belong:  all this talk about "changing Bitcoin" is a total joke.  Any substantial change to Bitcoin is a new coin by design.  You cannot change Bitcoin in any substantial way.  You are discussing alt coins:  InflatoCoin, TaxCoin, TheftCoin, MagicVanishCoin, or whatever.  You are not discussing Bitcoin.  The only changes that will ever be made to Bitcoin are small technical improvement that can be done within the established protocol.

EDIT:  Darn, I screwed up my edit and lost some text.  Something like "Good bye and good luck, etc."
  

IMO Anything can be changed
But before you go just please tell me if my proposal is technically feasible within bitcoins codebase, if not why? and I promise not to plague you in the techical forums

[kaito]

Where in my proposal you see Central Planning? Are you having halucinations?

[...]

*As I am opposed to create rules that act as forces of nature and rather trust individual and collective human judgement,
I would like to have that parameter not hardcoded but open to negotiation and discussion.

[...]

Maybe Invalidation threshold/rate can be decided by a de'facto concessus between the independent private Invalidation threshold/rate that miners choose.

So yeah ok I still have faith in human judgement, I don't want my life to be dictated by an algorithm. Me Bad.

Yes you bad. Take a look around the world and take a hint.

[BurtW]

IMO Anything can be changed
But before you go just please tell me if my proposal is technically feasible within bitcoins codebase, if not why? and I promise not to plague you in the techical forums

There are strict tecnical protocol reasons why the changes you are proposing cannot be done "to Bitcoin" because by design if you make these types of changes you automatically create what is called a hard fork in the blockchain.  This hard fork creates two different block chains with two different coins:  the original Bitcoins and the new alt coins.  No matter how loud or how often you try to call the new alt coins "Bitcoins" it is not true and everyone who continues to support the original chain will know it is a lie.

All of the miners and clients that continue to support the Bitcoin way of doing things will not accept the alt coins you have just created.  All of the miners and clients that support your changes and accept the alt coin will accept the old Bitcoins untill they are all spent on your new alt chain.

Now on to your question:

Let's say I have a vigin block of 50 BTC that was mined in January of 2009.
At some point in January 2010 I sent 1 BTC to a buddy, sending the change to a new address
Now Yesterday I wanted to spend 95 BTC to buy a new Tesla S from a car dealer

The transaction is as follow:

    49 BTC from the change from the 2010 transaction
    25 BTC from a brand new freshly minted block
    25 BTC from a block that was minted in 2013

Outputs:

    95 BTC to the dealer for the car
    4 BTC to a change address

Now you want to kill the BTC from from the Jany 2009 block.  How would you do it?

[Impaler]

no transaction fees (every other means of payment iscrewed in no time) finite quantity of coins, every wallet looses some coins, in percentage to the holdings, that go to miners: they actually "remine" the coins. Just an embryonal idea. The miners "steal" from steady accounts, but they do not "steal" for transaction fees. A very liquidity premium.

You basically described Freicoin and how it is implement, though it has transaction fees to avoid spamming as with BTC, but because of continual 'remining' as you call it the network never relies on transaction fees as a revenue source for miners, it is always intended to remain trivial.  Ideally their would be no transaction fee if a technical solution could be found to transaction spamming.

Check out our forums or IRC channel to learn more (links in my sig)

[thaaanos]

IMO Anything can be changed
But before you go just please tell me if my proposal is technically feasible within bitcoins codebase, if not why? and I promise not to plague you in the techical forums

There are strict tecnical protocol reasons why the changes you are proposing cannot be done "to Bitcoin" because by design if you make these types of changes you automatically create what is called a hard fork in the blockchain.  This hard fork creates two different block chains with two different coins:  the original Bitcoins and the new alt coins.  No matter how loud or how often you try to call the new alt coins "Bitcoins" it is not true and everyone who continues to support the original chain will know it is a lie.

All of the miners and clients that continue to support the Bitcoin way of doing things will not accept the alt coins you have just created.  All of the miners and clients that support your changes and accept the alt coin will accept the old Bitcoins untill they are all spent on your new alt chain.

What if everyone agrees? what if Satoshi steps out of nowhere and tells hey guys I think thaaanos is onto something lets do as he says

Now on to your question:

Let's say I have a vigin block of 50 BTC that was mined in January of 2009.
At some point in January 2010 I sent 1 BTC to a buddy, sending the change to a new address
Now Yesterday I wanted to spend 95 BTC to buy a new Tesla S from a car dealer

The transaction is as follow:

    49 BTC from the change from the 2010 transaction
    25 BTC from a brand new freshly minted block
    25 BTC from a block that was minted in 2013

Outputs:

    95 BTC to the dealer for the car
    4 BTC to a change address

Now you want to kill the BTC from from the Jany 2009 block.  How would you do it?

Ok What would the effect be is suddendly everyone decided that the genesis block is one past the one of Jan 2009 you mined

[thaaanos]

Where in my proposal you see Central Planning? Are you having halucinations?

[...]

*As I am opposed to create rules that act as forces of nature and rather trust individual and collective human judgement,
I would like to have that parameter not hardcoded but open to negotiation and discussion.

[...]

Maybe Invalidation threshold/rate can be decided by a de'facto concessus between the independent private Invalidation threshold/rate that miners choose.

That's not Central planning, what shatoshi did was central planning

So yeah ok I still have faith in human judgement, I don't want my life to be dictated by an algorithm. Me Bad.

Yes you bad. Take a look around the world and take a hint.

Shit even Borgs dont work this way.
So you find no moral hazard in decoupling a decision from the stakeholders and a few decades?

[diedicar]

no transaction fees (every other means of payment iscrewed in no time) finite quantity of coins, every wallet looses some coins, in percentage to the holdings, that go to miners: they actually "remine" the coins. Just an embryonal idea. The miners "steal" from steady accounts, but they do not "steal" for transaction fees. A very liquidity premium.

You basically described Freicoin and how it is implement, though it has transaction fees to avoid spamming as with BTC, but because of continual 'remining' as you call it the network never relies on transaction fees as a revenue source for miners, it is always intended to remain trivial.  Ideally their would be no transaction fee if a technical solution could be found to transaction spamming.

Check out our forums or IRC channel to learn more (links in my sig)

very similar indeed. Anyway i do notimmediatly get why such a demurrage shold prevent from interest borrowing. In my opinion interest borrowing should remain. Thanx i think i'll buy some.

[kjj]

Now on to your question:

Let's say I have a vigin block of 50 BTC that was mined in January of 2009.
At some point in January 2010 I sent 1 BTC to a buddy, sending the change to a new address
Now Yesterday I wanted to spend 95 BTC to buy a new Tesla S from a car dealer

The transaction is as follow:

    49 BTC from the change from the 2010 transaction
    25 BTC from a brand new freshly minted block
    25 BTC from a block that was minted in 2013

Outputs:

    95 BTC to the dealer for the car
    4 BTC to a change address

Now you want to kill the BTC from from the Jany 2009 block.  How would you do it?

Ok What would the effect be is suddendly everyone decided that the genesis block is one past the one of Jan 2009 you mined

Just in case anyone has any remaining doubts about your complete and total lack of understanding of what bitcoin is and how it works, can you please post some more?

With a moving genesis block, you have total chaos.  New nodes would not sync to the rest of the network because they would quickly find transactions that refer to past transactions that no longer exist.  They would see everything as invalid: transactions, blocks, everything.

You can't, in general, undo the start of a linked list without throwing the whole thing out.

Now if you kept the old chain, but decided that transactions that referenced it were merely invalid in the future, you end up with the situation that BurtW is trying to ask you about.  That you can't see it is, uh, informative.

Keep in mind that we do not trace transactions backwards.  When a new transaction comes in (by message or by block), we validate it against our current set, and if we accept it, we update that set to reflect the new information.  We could trace backwards, if there was some need, at a considerable cost.  I look forward to hearing how you solve that problem in your VanishCoin alt.

[BurtW]

If your, or any, alt coin idea creates a situation where the market assigns different values to different coins as in your case of assigning different values to coins with different "ages" then we are done here.  If that is the case then your coins are not money, they are collectibles.  Money is fungible.  Collectibles require a third party to "grade" them in order to assign value.  I suggest you learn a lot more about Bitcoins, what they are, how they actually work, what makes the system unique and why so many people are inspired by it BEFORE you try to fix it.

[kaito]

That's not Central planning, what shatoshi did was central planning
So you find no moral hazard in decoupling a decision from the stakeholders and a few decades?

Whatever plans Satoshi hatched were his own. There was no stake to hold. People accepted bitcoin in the state it was in.

Outputs:

    95 BTC to the dealer for the car
    4 BTC to a change address

Now you want to kill the BTC from from the Jany 2009 block.  How would you do it?

He probably didn't think it through this far, but this is actually quite easy. Distribute it amoung the outputs.
    95 - 49*95/99 BTC to the dealer for the car
    4 - 49*4/99 BTC to a change address

[BurtW]

He probably didn't think it through this far, but this is actually quite easy. Distribute it amoung the outputs.
    95 - 49*95/99 BTC to the dealer for the car
    4 - 49*4/99 BTC to a change address

Exactly, you just made my point for me.  Thanks.  You just took almost 49 BTC from the car dealer, HALF what he was paid for the car.

Because of this the VanishCoin idea is not money and is a still born alt coin concept.