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Author Topic: [ANN] Freicoin: demurrage crypto-currency from the Occupy movement (crowdfund)  (Read 20501 times)
maaku
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June 25, 2012, 02:20:42 PM
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We're asking for your help in creating a new crypto-currency, once with real value and lasting benefits. The idea of a demurrage currency has been raised before on this forum, but for those unfamiliar the idea is simple: apply a continuously-assessed fee to all accounts (4.4% APR, in this case), and distribute the proceeds from that collection to the miners.

Why on Earth would anyone want their money to lose value? The rationale is to separate money-as-a-store-of-value, a purpose Bitcoin serves very well, from money-as-the-medium-of-exchange, for which inflation/demurrage has significant benefits. These two functions are inherently at odds with each other, and there exists a rational economic theory put forth by Silvio Gesell a century ago which says that separating the two will cause (through economic self-interest) a lot of the ills of the current financial system and its effects on society to be fixed.

We're putting forth a proposal for a new crypto-currency with integrated demurrage and a few key improvements to the client (including trust-less block-chain pruning), which will be back-ported to Bitcoin as well. You can read the full details below.

To be clear, this is not a competitor to Bitcoin. Should Freicoin be successful, Bitcoin will retain its critically important role as a long-term digital store of wealth. Should it fail, that would only validate arguments for a deflationary rather than an inflationary/demurrage currency.

We've been working on prototypes and proof-of-concepts for these and other features over the past year, but unfortunately the demands of full-time jobs, family, and other commitments has meant progress occurring at a relatively glacial pace. We're seeking your help to make this currency and associated Bitcoin improvements happen A.S.A.P. We've created an Indiegogo campaign, and are of course accepting bitcoin donations as well, at the following receiving address:

Donation address: 1HzH4YtFwBQXyF2NCCwyY2qFCCsBsmdN3j
Contribute with fiat: Indiegogo Campaign

GOAL: $28,000 USD

Here's the text of the campaign (geared towards those who may not have heard of Bitcoin), followed by the pledge rewards and a FAQ:


Freicoin is a decentralized, distributed electronic currency designed to address the grievances of the 99% movement and correct the excesses of the 1%. Whereas inflationary currency like the U.S. Dollar or Euro are controlled by central bankers under rules that benefit the establishment, Freicoin would be completely decentralized and self-regulating, with fees on stagnant or hoarded money (demurrage) paid in proportion to those community members who contribute work to secure the currency. It is an opt-in alternative currency to be used first by Occupy-supporting businesses and supply chains, then spread to the surrounding community across the globe. It includes a downloadable client for Mac OS X, Windows, and Linux, and an electronic network for transferring funds denominated in Freicoin world-wide.

Why

Demurrage currencies like Freicoin align incentives of bankers and financiers with the priorities of working class, forcing the wealthy through their own self-interest to invest in growth, jobs, and ventures with long-term thinking. An economy based on demurrage currency would not fall victim to to the same greed, excess, and short-term thinking that led to the 2008 crisis and financial collapse. Freicoin would instead continuously stimulate global growth through reinvestment, and dis-incentivize the hoarding by the 1% that caused the “credit crunch”.

The current systems of money, including the U.S. Dollar or Euro, are and always have been used to store value--money seen from the point of view of the holders, the wealthy. Freicoin emphasizes instead the view to that of the producer, the proletariat, the 99%: money as a means of buying the goods and services necessary to sustain life. These are contrary purposes--money cannot function properly as, nor should it ever be both a means of saving and exchange; it cannot be both accelerator and brake at the same time. Indeed, this confusion and conflict over the purpose of money is what led to the financial collapse of 2008 and the extended recession that followed.

Demurrage forces the entire stock of money to circulate irrespective of the desire of the wealthy to accumulate and store; banks, financiers, and corporations can no longer hoard money waiting for higher interest rates or a more favorable investment climate as the demurrage acts as a tax on stagnant money. Money is eternally losing value, so the incentive is to spend it as quickly as possible on the necessities of life or to invest in longer-term ventures that also provide stimulus for a growing economy, typically creating real jobs in the process. Real money becomes a sort of “hot potato” that is passed around as quickly as possible, in a virtuous cycle of investment. No longer are there incentives for financiers to withhold credit from those in need simply to what for fairer economic winds.

For the 99% who live paycheck-to-paycheck, the loss from demurrage is minimal and would be compensated for in wages and pricing. For those who manage to accumulate some savings and for the 1% who receive much more income than they reasonably spend, they can either save real wealth (gold, silver, Bitcoins, real estate, artwork and fine wine, for example) and accept the obvious limitations of wealth saving (loss, storage, rot, fire, etc.), or they can loan it out to borrowers at what ends up being near-zero basic interest. With sustainable near-0% interest loans the order of the day, businesses will boom and the economy will grow in a virtuous cycle.

How

For the past year we have been working in our free time to produce a proof-of-concept prototype based on improved and expanded Bitcoin technology. The prototype is a re-implementation of a generalized form of the Bitcoin protocol which makes possible advanced features like demurrage, multiple currencies existing side-by-side (Bitcoin and Freicoin), and other improvements for future scalability. Extensive unit tests demonstrate the validity of this core component.

  • What is Bitcoin? Bitcoin is a decentralized, peer-to-peer internet currency secured by strong cryptography and an open-source development process, and the foundational technology underlying Freicoin. Bitcoin enables anyone in the world to send funds to anyone else with minimal, fair fees on both consumers and merchants. Bitcoin is democratic in that everyone who uses the currency takes part in securing it (making sure the rules are followed and there is no fraud) by running a software program on their computers; they are proportionally compensated for this effort by collecting transaction fees, and in the case of Freicoin, demurrage. For more information about the benefits that come from basing Freicoin on Bitcoin technology, see the Bitcoin advocacy site We Use Coins.

What remains to be done, and what this campaign will fund is the following:

  • Implementation of a block-chain pruning technology, reducing storage requirements and startup time and eliminating a major impediment to wide scale adoption of Freicon (and Bitcoin, for that matter).
  • Re-purposing of Armory, the most advanced and user-friendly Bitcoin client, to work with Freicoin in addition to Bitcoin.
  • Public-facing website and always-on “seed node” to help new users download the combined Armory/Freicoin core software and get connected for the first time.
  • Initial “merged mining pool”--a service for Freicoin users to help secure the currency and receive rewards/compensation for that service.
  • A Bitcoin/Freicoin exchange to enable supporters to convert existing funds into Freicoin (by first buying Bitcoin and then Freicoin).
  • An animated film explaining what Freicoin is, what it does to fix the problems of the financial system, and how people can get involved in using and promoting it.

Once the above objectives are reached, Freicoin will be ready for adoption by Occupy groups and supporters, and other like-minded groups. The work can then begin to get Freicoin adopted as the first “global community currency”. As a peer-to-peer application, once completed Freicoin can be used by anyone in perpetuity without any required ongoing maintenance.

At the completion of this project Freicoin will be ready for individual communities to adopt, for businesses to accept as payment and for consumers to use. The initial freicoins will be in the process of being generated and fairly distributed to community members who participate in securing the network.

This campaign will directly pay for hardware and server time cover the first year of operations, materials used in the logo, branding, film, and initial marketing, and to keep the basic necessities of life as we decline contracting work to focus on Freicoin.

Join us and be a part of the reformation of global finance!

GOAL: $28,000 USD

Fiat donations: Indiegogo Campaign
Bitcoin address: 1HzH4YtFwBQXyF2NCCwyY2qFCCsBsmdN3j

$1
BACKER
Everyone gets access to the project upon public release, and a chance to participate in the creation of a new global economy.

$10
SUPPORTER
Our heartfelt thanks and your name in the credits of the official client.

$30
PHILATELIST
Receive a custom post card designed by the developers and sent from Silicon Valley with a personalized message of gratitude.

$80
T-SHIRT!
A beautiful silk-screened “Occupy Freicoin” T-shirt (add extra $10 shipping to Canada and $15 to other non-U.S. destinations).

$150
IMMORTAL
You will be immortalized in the genesis block of the Freicoin block chain, where your name or short message will be preserved forever in the historical record.

$500
FOODIE
Dinner with the developers, their family, and other backers in the Silicon Valley/S.F. south bay-area (transferable if you know someone who lives or will be in the area at the appropriate time).

$750
ACTOR
Cameo appearance in the animated film introducing, explaining the Freicoin project and how to get involved.

$1,500
VISIONARY
Membership in our advisory circle--a group of visionaries that will meet (virtually) approximately once a month to be informed of our current efforts and from which we seek ideas and inspiration.

$3,500
SPONSOR
Membership in our advisory circle as well as recognition as official sponsor of the Freicoin project. Your logo, business name, or other mark belonging to you will be featured prominently on the official public-facing Freicon website.

What is “Freicoin”, and how does it work, really?

Freicoin--literally “free money” in German--is based on the principles of economist Silvio Gesell's Natural Economic Order. Freicoin is an electronic currency managed through a self-regulating, distributed electronic network based on Bitcoin technology. The network enforces a continuously assessed 4.4% APR fee on all account holders. This fee acts as a tax on stagnant money, driving up the rate at which money flows through the economy and acting as an economic stimulus, and discouraging unproductive hoarding by the 1%. The proceeds of the demurrage tax are repayed transparently and proportionally to the community members who donate computer time to running software that regulates and enforces the rules of the network.

Besides providing a virtuous cycle of rewarding positive long-term investments, demurrage currencies also reduce interest rates to near-zero (hence the “free money”), providing further job-creating stimulus and helping to reduce the magnitude of the boom-bust business cycle.

Where can I learn more?

Here are some resources:


You've based it on Bitcoin technology. Is this a competitor to Bitcoin?

Absolutely not! The two serve quite different purposes. The properties of Bitcoin make it analogous to precious commodities like gold or silver, and it will always function as a useful store of value. Freicoin, on the other hand, is meant to be used as a medium of exchange only, kept on hand just long enough to provide a cash-flow buffer. The demurrage fee encourages recipients of Freicoin to put their money to use as soon as possible in an exchange (even by buying bitcoins, for example), whereas the deflationary nature of Bitcoin rewards hoarding and serves a different purpose as a long-term store of value.

How is this different from that other Occupy currency?

There have been a couple of monetary reform ideas floated by members of the Occupy movement, but most likely you are referring to “OCCCU”, another demurrage currency created by students at the Vorarlberg University of Applied Sciences and presented to members of the Occupy movement at Davos in January, 2012.

OCCCU's provision of “basic income” and the assessing of demurrage fees is accomplished by means of centralized regulators, the currently faceless OCCCU “general assembly”. This is hardly an improvement over the current system of centralized banking; as the great poet Pete Townshend once said: “meet the new boss, same as the old boss”. It is our firm belief that real monetary reform will only come when the system does not require trust in any individual or organization, and when all operations are made transparent. Freicoin accomplishes these goals with distributed self-regulation and automatic distribution of the demurrage pool on a fair and proportional basis.

Who are you?

There are three of us that have come together to make this possible: engineer Mark Friedenbach, designer Aaron Blumenshine, and project manager Matt Everingham.

In his day job, Mark is a application developer at NASA. He builds large data visualization applications as well as web and database backends. Aaron is an accomplished and award-winning photographer and graphic designer. Matt is an aerospace engineer and project manager, also at NASA, who has designed and built a series of low-cost exploration rovers controlled over the internet.

We became aware of Silvio Gesell and demurrage currency through our research into Bitcoin, and for the past year we have been developing the prototype and proof-of-concept mentioned above in our free time.

Will it be open-source?

Absolutely. In fact, the transparency provided by an open-source client is essential to the basic ideals of Freicoin and the Occupy movement. That said, it will certainly be possible to build closed-source software and businesses on top of the open-source Freicoin core.

I'm an independent developer working on bitcoin-core, making my living off community donations.
If you like my work, please consider donating yourself: 13snZ4ZyCzaL7358SmgvHGC9AxskqumNxP
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June 25, 2012, 03:31:10 PM
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I don't think there is a demand. I enthusiastically proposed something like this long ago and it was completely shot down. And that was without asking for $28k in donations.

The pejorative name given it was "Inflatacoin".

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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June 25, 2012, 03:40:20 PM
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Demurrage forces the entire stock of money to circulate irrespective of the desire of the wealthy to accumulate and store; banks, financiers, and corporations can no longer hoard money waiting for higher interest rates or a more favorable investment climate as the demurrage acts as a tax on stagnant money.

I stopped reading here. You can't prevent the accumulation of wealth. How would Freicoin prevent people from hoarding dollars, gold, or bitcoins?

Those who cause problems for others also cause problems for themselves.
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June 25, 2012, 03:46:34 PM
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Is this anything like the Occcu? https://bitcointalk.org/index.php?topic=62983.msg735930#msg735930

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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June 25, 2012, 04:27:01 PM
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Inflation is simular to how scientists "stimulate" lab rats to solve puzzles by using electroshock. Why do you expect from people to volunteer to use it?
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June 25, 2012, 04:36:35 PM
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I don't think there is a demand. I enthusiastically proposed something like this long ago and it was completely shot down. And that was without asking for $28k in donations.

The pejorative name given it was "Inflatacoin".

Yeah, well that's the main reason for the explicit Occupy tie-in. A demurrage currency would solve or prevent a lot of relevant problems that a lot of people care about, but not anyone on this forum it seems.

“Inflatacoin” as a pejorative belies a fundamental misunderstanding of macroeconomics. I don't like the effect inflation has on my savings. But I do appreciate that the pressure of inflation has caused investment and productivity innovation that has greatly improved my life and perhaps even brought my day job into existence.

I stopped reading here. You can't prevent the accumulation of wealth. How would Freicoin prevent people from hoarding dollars, gold, or bitcoins?

Then you should have kept reading because the very next paragraph addresses that point. Freicoin does nothing to prevent the accumulation of wealth, nor would that be a desirable outcome; I'm a libertarian, not a communist. You just don't save with freicoins; use bitcoin for that.

In an ideal world, I would have a “checking account” denominated in Freicoin where I receive my paycheck and from which I draw on for daily expenses, and a “savings account” denominated in Bitcoin. Does that make sense?


Addressed in the 3rd-from-the-bottom FAQ, but in summary: OCCCU is centrally controlled by a faceless “general assembly” that decides how much demurrage to take out of people's accounts, how much “basic income” to dole out, and what to do with the proceeds.

I find that utterly repulsive. You should own what's yours, and no one should be able to take that away from you or change the rules at a later point in time. By using Freicoin you opt-in to the demurrage, which is assessed according to the unchanging network rules and distributed fairly to miners, but that's it and no one can change the rules on you later on.

I'm an independent developer working on bitcoin-core, making my living off community donations.
If you like my work, please consider donating yourself: 13snZ4ZyCzaL7358SmgvHGC9AxskqumNxP
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June 25, 2012, 04:46:32 PM
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Inflation is simular to how scientists "stimulate" lab rats to solve puzzles by using electroshock. Why do you expect from people to volunteer to use it?

Maybe I have the misguided hope that enough people will be willing to look at the big picture and realize how both deflationary and inflationary currencies have significant problems, and that by separating the two (save in deflatacoin, spend in inflatacoin/demurrage), will create a virtuous cycle of investment that will do more to improve their financial outlook than the pittance of demurrage assessed against their stock of freicoins for day-to-day purchases? I.e, would they rather have a high-paying job in a booming industry at the cost of a fixed low-percent tax on money that they don't invest, or a good chance at no job at all in a prolonged recession?

I'm an independent developer working on bitcoin-core, making my living off community donations.
If you like my work, please consider donating yourself: 13snZ4ZyCzaL7358SmgvHGC9AxskqumNxP
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June 25, 2012, 05:30:02 PM
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In an ideal world, I would have a “checking account” denominated in Freicoin where I receive my paycheck and from which I draw on for daily expenses, and a “savings account” denominated in Bitcoin. Does that make sense?

No. What problem would it solve to have a “checking account” denominated in Freicoin and not in bitcoin?

Those who cause problems for others also cause problems for themselves.
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June 25, 2012, 06:00:22 PM
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I think Silvio Gessels whole concept of "demurrage" is questionable. Forcing people to spend their money, does NOT create any more goods or services. Society does not get any richer, if money sloshes around faster.

Wealth is created by production, not consumption. When we can make things cheaper and faster, with less labour or energy, then there is more stuff to buy and everyone gets richer.

The inequity of the present fiat system, is because insiders have preferential access to credit, allowing them to benefit from inflation. Bitcoin has already solved that problem, so Freicoin is not needed.

Still, Freicoin is a worthy experiment, and I wish you luck.

casascius
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June 25, 2012, 06:14:23 PM
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Part of what convinced me that the idea was doomed from the start when I presented it the first time was the observation that people actually DO care about the "There Will Never Be More Than 21 Million Bitcoins" part as a core attraction.  Inflatacoin lacks that appealing attribute, even if the truth of the matter is "You Will Be Long Dead Before There Is Ever More Than 21 Million Inflatacoins".

I would venture to say that's so important, that without it, Bitcoin is just another kind of dollar that isn't even a dollar.  It may as well just be digital Monopoly dollars.

And why $28,000?  Bitcoin is open source software.  Just fork it, give it a new name, make the 2-3 lines of code changes needed to make it into inflatacoin, forge your new genesis block, release it into the wild, and see what happens.  Total cost, $0.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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June 25, 2012, 06:15:38 PM
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Part of what convinced me that the idea was doomed from the start when I presented it the first time was the observation that people actually DO care about the "There Will Never Be More Than 21 Million Bitcoins" part as a core attraction.  Inflatacoin lacks that appealing attribute, even if the truth of the matter is "You Will Be Long Dead Before There Is Ever More Than 21 Million Inflatacoins".

I would venture to say that's so important, that without it, Bitcoin is just another kind of dollar that isn't even a dollar.  It may as well just be digital Monopoly dollars.

Exactly, +10,000.

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June 25, 2012, 06:18:15 PM
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maaku, is this parallel to developing a blockchain for trading computation, or is this your main project, now?
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June 25, 2012, 06:20:37 PM
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Forcing people to spend their money, does NOT create any more goods or services. Society does not get any richer, if money sloshes around faster.
  On average per capita, sure, but it evens out the distribution of money, which does lead to a more vibrant economy with more opportunities for innovation.
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June 25, 2012, 06:31:20 PM
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Part of what convinced me that the idea was doomed from the start when I presented it the first time was the observation that people actually DO care about the "There Will Never Be More Than 21 Million Bitcoins" part as a core attraction.  Inflatacoin lacks that appealing attribute, even if the truth of the matter is "You Will Be Long Dead Before There Is Ever More Than 21 Million Inflatacoins".
I think the number of Freicoins will be fixed at 21 million, just like Bitcoin. The difference will be, that inactive accounts will have 4.4% of their balance stripped off each year, and redistributed back to the miners.

At least, thats how I understood the OP.
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June 25, 2012, 06:41:46 PM
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So, this is Bitcoin, where a percentage of your money is taken away every so often. The goal, supposedly, is to make Freicoin a better medium of exchange than Bitcoin, but how is it going to accomplish that? If the only real difference other than some behind the scenes blockchain pruning is that money is taken away to pay the miners, I can see no incentive to use Freicoin over Bitcoin, even as a medium of exchange.

As an employee, do I want my paychecks in bitcoin or freicoin? Bitcoin, because it won't decay even the slightest amount or hold me back while I'm saving up for my larger summer vacation.

As an employer and small business owner, do I want to keep my funds in bitcoin or freicoin? Bitcoin, because my employees want to be paid in Bitcoin, my small business needs to store a good amount of funds in reserve, and profit margins are slim enough as it is.

As an owner of a business trying to sell things, do I want to sell my goods and services for bitcoin or freicoin? Bitcoin, because all of my funds are better stored in bitcoin to begin with, and since everyone's getting paid in bitcoin, nobody's going to want to convert it into freicoin just to buy some food.

As a member of the financial elite (1% or whatever), would I want to use bitcoin or freicoin? Bitcoin, because 4.4% annually off of my amount of money gets to be pretty significant.

The only thing that would make this work is if business owners realize that freicoin encourages rapid spending and switch to it anyway, despite the flaws, in hopes that their currency choice draws more people trying to rid themselves of money than they lose for using freicoin to begin with. Even then, the 1% freicoin's trying to hurt will look down at freicoin and laugh as they keep their massive hoards to themselves. It's going to be the small businesses and normal people trying to save money over multiple years who will be hurt by this.

Bitcoin works because it gives equal ability to all of its users, and is completely voluntary. Everyone who wants to use it can do so, and the network treats their transactions the same way as anyone else's. Freicoin retains the voluntary nature, but then specifically intends to hurt a specific group of people who will take advantage of their ability to choose and completely ignore it. Freicoin could work as a completely government controlled currency designated as legal tender, with laws requiring everyone to hold their funds in it. What's the difference, then, between Freicoin and simply levying an additional 4.4% tax on everyone? Why make it a part of the currency and not part of whoever's implementing taxes to begin with? I simply don't see Bitcoin's decentralized, voluntary network working well with taxation.

In an ideal world, I would have a “checking account” denominated in Freicoin where I receive my paycheck and from which I draw on for daily expenses, and a “savings account” denominated in Bitcoin. Does that make sense?

In that ideal world, I would use my "savings account" for almost everything I do. When I want to buy something, I take advantage of nearly instantaneous transaction times to send my bitcoins to an exchange, turn them into freicoins, and then buy my item. I'd never give it a chance to take my money away. We could solve that with some government regulation taxing bitcoin->freicoin conversions, or installing some minimum waiting time before spending acquired freicoins, but that's completely against the point of the structure of Bitcoin, which is mainly being preserved for Freicoin.

Sorry about the long, rambling, and unedited post.
TL;DR: Despite the change to Freicoin, Bitcoin is still a better currency for being a medium of exchange. Because people aren't forced to use Freicoin, the 1% who would be hurt by it get to avoid it altogether. Freicoin's philosophy is directly contradictory to the structure Bitcoin is built around, without making any changes to that structure.

P.S: So, 4.4% of all freicoins get redistributed to the miners annually. Who are the miners? Most likely the rich elite who can afford to buy massive ASIC farms. If Freicoin were to be successful, that 4.4% would end up going straight back to the rich.

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June 25, 2012, 07:54:43 PM
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I think Silvio Gessels whole concept of "demurrage" is questionable. Forcing people to spend their money, does NOT create any more goods or services. Society does not get any richer, if money sloshes around faster.

Wealth is created by production, not consumption. When we can make things cheaper and faster, with less labour or energy, then there is more stuff to buy and everyone gets richer.

I agree with the premise but not the conclusion. The creation of wealth requires entrepreneurship, and entrepreneurship requires capital. In a deflationary universe getting investment requires being able to beat bitcoin's ROI, since the investor's alternative is to buy bitcoin and sit on it. Depending on how bullish you are about bitcoin, that could be a tall order.

With Freicoin, on the other hand, if all you can do is break-even, you are already ahead. It'll be MUCH easier to find investment in Freicoin. (And before anyone says “but you could just buy bitcoins with freicoins!”--that's true, and it will be compensated for by the Bitcoin/Freicoin price.)

The inequity of the present fiat system, is because insiders have preferential access to credit, allowing them to benefit from inflation. Bitcoin has already solved that problem, so Freicoin is not needed.

A chief value of Freicoin would be in eliminating that inequity--demurrage has a similar pressure as inflation, but is assessed fairly against all. But I do not agree that elimination of inflation entirely is a good thing.

Part of what convinced me that the idea was doomed from the start when I presented it the first time was the observation that people actually DO care about the "There Will Never Be More Than 21 Million Bitcoins" part as a core attraction.  Inflatacoin lacks that appealing attribute, even if the truth of the matter is "You Will Be Long Dead Before There Is Ever More Than 21 Million Inflatacoins".

I would venture to say that's so important, that without it, Bitcoin is just another kind of dollar that isn't even a dollar.  It may as well just be digital Monopoly dollars.

Agreed. But that's why Bitcoin is a non-perishable commodity/store-of-wealth, and will, IMHO, *never* be a viable currency. Bitcoin is valuable for what it is, but it's properties are only well suited for a currency if you believe in the gold standard (I don't).

And why $28,000?  Bitcoin is open source software.  Just fork it, give it a new name, make the 2-3 lines of code changes needed to make it into inflatacoin, forge your new genesis block, release it into the wild, and see what happens.  Total cost, $0.

For inflatacoin/expcoin, yes. Demurrage throws a few kinks in there that make it slightly more difficult in terms of user interface and such since accounts are continuously decreasing in value. But that's not where most of the money will be spent.

The other things we will do is definitively solve the blockchain pruning problem, which is currently being discussed in the technical subforum and would be back-ported to bitcoin, and provide a website, animated video, and marketing materials to explain Freicoin to the non-bitcoin crowd. All of that takes time and money, and for some of resources we don't have in-house.

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June 25, 2012, 07:56:17 PM
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maaku, is this parallel to developing a blockchain for trading computation, or is this your main project, now?
Still working on that, but it's a different project. Doing it “right” would take a bit of effort, more than Freicoin, so it's on the back burner for now. But we are moving in that direction.

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June 25, 2012, 08:11:39 PM
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Sorry, but the whole concept of artificially implementing demurrage into a a mechanism of trade and value storage is antithetical to what having a free-floating value is. It is not a means to keep currency flowing around in the economy, it is a means to have an authority (be it your General Assembly, or your blockchain structure, or your whip-yielders in government) to force the loss of value over time. Those in such an economy, having only the ability to spend to avoid an artificial devaluation of their labor or investment, will actively seek an alternative to that economy. Far from investment in entrepreneurial experimentation, a demurrage-based coin will do nothing but bolster all OTHER currencies as a means to avoid having an external power destroy some of the value of my work.

I salute the outside the box thinking, but the reality is, just as with the Occu, this is just a way for a proto-nomenklatura within the Occupy movement to try to find a way to game the economy and find gross profits for themselves, while cloaked in the rhetoric of the revolution. $ 28,000 for branding and development? You couldn't find one earnest programmer, host or product design expert in the movement who would gladly give you free labor and resources in exchange for being in the bleeding edge cadre of the 99%? Nobody wants to work for pay that declines automatically over time? This sounds more like a creative approach to try to fleece $28,000 out of simple-minded sympathizers who will believe that crowd-funding this kind of absurdity is a blow against the empire. And that smacks of elitism, exploitation and all that Occupy holds evil and wrong.

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June 25, 2012, 08:42:53 PM
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The current banking system already offers this feature anyway. Open an account at Chase, stick $1000 there, and it will be eroded by fees (e.g. minimum balance fee) until it is gone. Nobody is going to stick their money there even if thoroughly convinced that they are "taking one for the team" (for the whole economy) by doing so.

Besides, how would this work? Mom gives son 35 inflatacoins to pay for soccer registration, but by the time he gets there to sign up, he doesn't have enough because he only has 34.99982731 left.

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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June 25, 2012, 08:46:01 PM
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Also I probably shouldn't call them inflatacoins as they are actually evaporating like dry ice.  Or rather, decaying like radioactive substances.  Dry ice coins?  Decayingcoins?  Half-life coins?

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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