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Author Topic: [ANN] Freicoin: demurrage crypto-currency from the Occupy movement (crowdfund)  (Read 56472 times)
jtimon
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July 03, 2012, 06:20:50 PM
 #141

Hey, MarkM remembered me that we're forgetting the "exact payment problem".
My proposal was:
https://bitcointalk.org/index.php?topic=36190.msg453112#msg453112

It's not a problem, at least not in that context. It will require implementation of receiver-fees, however, so that the receiver can make an transaction claiming the funds with extra fees in case the input value decays below the output value.

The exact payment solution would work too, and it's a toss-up as to which one is easier to implement.

Sure there's more possible solutions. All I'm saying is that it is a problem that is better to solve (although not a particularly hard one).

Will you consider separating the campaign in different parts?

2 different forms of free-money: Freicoin (free of basic interest because it's perishable), Mutual credit (no interest because it's abundant)
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galambo
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July 03, 2012, 09:52:25 PM
 #142


Edit: Another consideration. I think that at the very least the pruning technology should be separated from the campaign. It would actually benefit bitcoin too, so pure austrians could contribute with that one even if they think that the whole idea of freicoin is stupid.


If the aim was to create a simple clone of bitcoin with demurrage, sure. Don't you think that's aiming pretty low?

I would hope this currency becomes valuable because it is better than bitcoin (because it builds on it), not because it only copies it.
galambo
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July 03, 2012, 10:08:29 PM
 #143

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I lol'd.

I don't think the cross section of people that would be interested in this proposal, and the people interested in bitcoin would be very large. I certainly don't have any bitcoin. My only real interest in either is completely technological (i look at them as tools). However, if this project does everything they say they want to do I think many more people in the community will find this worthwhile.
LoupGaroux
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July 03, 2012, 10:09:26 PM
 #144

Ah, there's the spirit of necro-alt coins past! This one will be worth less because we will make it thus for our own benefit and gain, and that in and of itself will make it better than bitcoin!! Just what the anonymous means of value exchange cadres in the world have been clamoring for! A self-defeating token that someone other than ourselves can arbitrarily control that has delusions of omnipotence!

Look here boys and girls... a new SolidCoin 5.0 (or are we up to 9.0 yet?) has arisen to take its place as the champion of the better than bitcoin competition. Yay! Enjoy your 15 seconds of glory running up an exchange that you can back-rape a couple of dozen suckers with, retire to your angry hole and bemoan loudly how brilliant you are because you have something that is better than bitcoin!! It's just the haters that ruined it for you.

You will find a couple of kindred spirits in that corner of hell, dreamers who think that they are so much smarter than bitcoin, and if we could only relate to just how brilliant they are, we would all enrich them endlessly. Of course this one is designed, and whined for by the occupy-istas, so I expect exactly zero progress before the eventual end of the universe. They will happily gank the $825 and spend it on delivery pizzas to be brought "aux barricades" to support the revolution. They will probably even tip the poor bastard that brings them in freicoins and tell him how lucky he is to have a tip that will be worth less when he gets back to the restaurant than when he received it.

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galambo
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July 03, 2012, 10:14:15 PM
 #145

They will probably even tip the poor bastard that brings them in freicoins and tell him how lucky he is to have a tip that will be worth less when he gets back to the restaurant than when he received it.


As I said earlier, with the current design it takes 16 years for a freicoin to halve in value. If it takes you longer than that to decide what to do with your money may I suggest a funeral plot? You can't spend the coins from below the ground. Most people will not notice the demurrage.

However, I think you will find the expectation of decreasing value will completely change the way people use this currency. If I know anything about markets its that they trade more on expectations and momentum than rational fact.
Bitinvestor
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July 03, 2012, 10:18:43 PM
 #146

However, I think you will find the expectation of decreasing value will completely change the way people use this currency.

Exactly, they won't use it and it will be worth very little.

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markm
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July 03, 2012, 10:29:59 PM
 #147

If I expect falling value doesn't that mean I have to inflate my prices?

For example if I buy 16 years supply of pencils, or erasers, or gold, or land, or whatever... any wholesale good I plan to sell at retail over a period of time to make a living as a retailer... surely I have to keep on increasing the price I require for what is left of my supply as the money I have aquired from what I have sold so far keeps vanishing from my purse, otherwise I will not have enough in my purse by the time I have sold all but my profit portion of the bulk buy quantity.

Is it supposed to be good that we help eliminate retail by forcing wholesale purchases to become impractical for retailers, forcing them to buy one at a time themselves instead of buying a number at a time, or some such thing?

If the objective is inflation, why bother decaying the currency, just jack the prices instead...

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galambo
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July 03, 2012, 10:36:37 PM
 #148

If I expect falling value doesn't that mean I have to inflate my prices?

surely I have to keep on increasing the price I require for what is left of my supply as the money I have aquired from what I have sold so far keeps vanishing from my purse


You have a very peculiar understanding of how a business operates. You might want to study "accurral based accounting" and "net payment terms" to get a better idea of how business works.

Essentially, there is a constant flow of money in and out of your business. If this is not the case, you are probably not running a very successful business.

You shouldn't have much of a "purse" and if you do it should be put into investments, not your checking account.

Demurrage works well for people with this style of operation, which is most successful people.

Your biggest expense in running a business, as always, will be other peoples time -- the cost of labor.
markm
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July 03, 2012, 11:15:28 PM
 #149

Okay, so how is freicoin better for a successful business than dollars, or bitcoins? What profit do they extract from whom by using it? Does it give them more leverage over their employees so that forcing employees to accept rotting/decaying/evapourating money? It is expected they will get more goods from suppliers per man-hour their labourers put in selling stuff for them or building stuff out of what the suppliers supply?

Or is the plan to turn into an investment firm, offering to help the suckers they foist this rotting currency upon a potential escape from the rot if only those suckers will simply invest into the business? Maybe thus turning a nice profit by suckign everyone into putting back into your busienss all the crap-coins you foist off upon them as wages or as change or even as "payment" for supplies?

Even tobacco/cigarettes/liquor/pantyhose type goods that have become currencies in various circumstances seem to be actually somewhat storable, even back in ancient times when grain was a currency that was only after granaries had been invented, wasn't it? So how the heck does anyone get suckered into actually accepting this guaranteed-to-rot currency? You keep dropping its price lower and lower and lower until someone finds a sucker who will accept it real soon thus decides to buy just as much of it as that sucker will accept? Then that sucker is stuck with the problem of finding a greater sucker?

Since the whole thing seems to depend on suckers, why not just build it directly on top of bitcoin? I have already pointed out in another thread (in the Development section) that the blockchain need not adjust its values at all, the adjustment can happen in the display and input routines only, allowing the blockchain to represent with constants the values that the display and input routines will, by access to a clock, render in accordance with the time at whcih the input or display happens, it becomes un-necessary to use a separate blockchain at all. You can simply use such display functions in a demurrage-coin client that uses the bitcoin blockchain for actual transactions but demurs the demurrage-coin quantity it displays for any given bitcoin quantity in accordance with the seconds since the epoch or whatever: the time at which display or input happens.

That way everyone can hum along fine all using the same blockchain but those who prefer to think of their balances decreasing can use the demurred display of their balance and those who prefer to just use constants to represent those same bits in the blockchain can do so.

Since the whole point is simply psychological, to psychologically trick people into thinking they should spend their money as soon as possible, this should suffice nicely since in any event it is hopefully only those who volunteer to be the suckers subjected to the experiment that need to see their balances as constantly decreasing. This should also ensure that your demurrage-coin will work fine and be wideley used, since anyone who prefers not to pay attention to the decreasing numbers representation of their balances can just stick to the normal family of clients and see things they way they always have, which they will in any case strive to do. Without this approach they will have to do it by not using your currency at all, At least this way they can still in good conscience use the stuff, leaving the psychological benefits of spending as soon as possible to others.

-MarkM-

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maaku
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July 03, 2012, 11:24:13 PM
 #150

...even back in ancient times when grain was a currency that was only after granaries had been invented, wasn't it?

Actually that's once of the prime examples of a demurrage currency. Some of our earliest examples of writing are actually grain contracts that acted as currency and decreased in value over time, to account for rot. Google "Egypt grain demurrage" for details.

Sorry, I want to respond to your post in full, but I'm getting pulled ten different ways today.

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markm
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July 03, 2012, 11:54:28 PM
 #151

Thanks for the search term, some interesting material there.

-MarkM-

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Bitinvestor
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July 04, 2012, 06:52:02 AM
 #152

Whenever a demurrage currency seemed to "work" it was the only option available. If there had been a better alternative without demurrage then they would have used that instead. Freicoin will have to compete against bitcoin from the start and it will lose.

Those who cause problems for others also cause problems for themselves.
jtimon
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July 04, 2012, 08:25:35 AM
 #153



Edit: Another consideration. I think that at the very least the pruning technology should be separated from the campaign. It would actually benefit bitcoin too, so pure austrians could contribute with that one even if they think that the whole idea of freicoin is stupid.


If the aim was to create a simple clone of bitcoin with demurrage, sure. Don't you think that's aiming pretty low?

I would hope this currency becomes valuable because it is better than bitcoin (because it builds on it), not because it only copies it.

My point is that the pruning is just a technical improvement that is reusable for bitcoin (and other cryptocurrencies). We should work with the bitcoin developers to achieve that. We coould also finance it together.
Personally I like more the bitcoin way of "do it first, earn the the bounty later", but that's another question. 

Whenever a demurrage currency seemed to "work" it was the only option available. If there had been a better alternative without demurrage then they would have used that instead. Freicoin will have to compete against bitcoin from the start and it will lose.

I don't know of any fiat demurrage currency. The examples I know are the wörgl experiment (not private), the chiemgauer and other private local currencies like it.
All of them competing directly with a national (or monetary union) currency. All of them worked pretty well.
Can you tell us about your sources?

If I expect falling value doesn't that mean I have to inflate my prices?

For example if I buy 16 years supply of pencils, or erasers, or gold, or land, or whatever... any wholesale good I plan to sell at retail over a period of time to make a living as a retailer... surely I have to keep on increasing the price I require for what is left of my supply as the money I have aquired from what I have sold so far keeps vanishing from my purse, otherwise I will not have enough in my purse by the time I have sold all but my profit portion of the bulk buy quantity.

No, you don't lose money by having stock, that only happens with deflation.
All you have to do is not hold a big quantity of money. You should better spend it or lend it.
You don't need to rise prices, that's inflation.
As said many times, expocoin is not equivalent to freicoin.

More frequent questions solved here:
https://bitcointalk.org/index.php?topic=3816.0

Okay, so how is freicoin better for a successful business than dollars, or bitcoins? What profit do they extract from whom by using it? Does it give them more leverage over their employees so that forcing employees to accept rotting/decaying/evapourating money? It is expected they will get more goods from suppliers per man-hour their labourers put in selling stuff for them or building stuff out of what the suppliers supply?

Everybody will save a lot in concept of interests (which are included in the price of EVERY WARE). Gesell uses an entire long chapter to explain how differnt economic actors would judge a currency free of the unfair basic interest: "How Free-Money will be judged".
You can start with the The Shopkeeper and then use the next button.
You could also read the whole book before criticizing an idea you don't understand (you can skip the first two parts on land and Gesell's particular view on georgianism).

Or is the plan to turn into an investment firm, offering to help the suckers they foist this rotting currency upon a potential escape from the rot if only those suckers will simply invest into the business? Maybe thus turning a nice profit by suckign everyone into putting back into your busienss all the crap-coins you foist off upon them as wages or as change or even as "payment" for supplies?

The demurrage fees go to miners, the people that maintain the security of the network. What's wrong with that?
Why transaction fees are so much more legitimate?

2 different forms of free-money: Freicoin (free of basic interest because it's perishable), Mutual credit (no interest because it's abundant)
Bitinvestor
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July 04, 2012, 10:53:02 AM
 #154

Whenever a demurrage currency seemed to "work" it was the only option available. If there had been a better alternative without demurrage then they would have used that instead. Freicoin will have to compete against bitcoin from the start and it will lose.
I don't know of any fiat demurrage currency.

Where did I say fiat demurrage currency? I meant demurrage currencies in general, like this one:

...even back in ancient times when grain was a currency that was only after granaries had been invented, wasn't it?
Actually that's once of the prime examples of a demurrage currency. Some of our earliest examples of writing are actually grain contracts that acted as currency and decreased in value over time, to account for rot. Google "Egypt grain demurrage" for details.

Since freicoin is modelled after rotting grain I hereby propose its trading symbol to be ROT.

Those who cause problems for others also cause problems for themselves.
Bitinvestor
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July 04, 2012, 11:43:58 AM
 #155

The demurrage fees go to miners, the people that maintain the security of the network. What's wrong with that?
Why transaction fees are so much more legitimate?

Because transaction fees don't rot your money away while you don't use it, just like gold doesn't rust.

Those who cause problems for others also cause problems for themselves.
jtimon
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July 04, 2012, 01:02:09 PM
 #156

Where did I say fiat demurrage currency? I meant demurrage currencies in general, like this one:

You said "Whenever a demurrage currency seemed to "work" it was the only option available." And I wrongly assumed that "the only option" implied fiat. I doubt that the grain option was the only one in egypt, but, anyway, your sentence is refuted with my previous examples.

The demurrage fees go to miners, the people that maintain the security of the network. What's wrong with that?
Why transaction fees are so much more legitimate?

Because transaction fees don't rot your money away while you don't use it, just like gold doesn't rust.


But the chain security must be paid by the currency users somehow. Why transaction fees are more legitimate than demurrage fees?
"Because gold doesn't rot" doesn't seem an answer unless you worship gold or something.
And "while you don't use it" is arguable. You're holding a wildcard, you're using it as an insurance against uncertainty. You enjoy the liquidity that the rest of the users provide you by accepting the currency, why should that be free?

2 different forms of free-money: Freicoin (free of basic interest because it's perishable), Mutual credit (no interest because it's abundant)
Bitinvestor
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July 04, 2012, 02:02:17 PM
 #157

You said "Whenever a demurrage currency seemed to "work" it was the only option available." And I wrongly assumed that "the only option" implied fiat. I doubt that the grain option was the only one in egypt, but, anyway, your sentence is refuted with my previous examples.

LOL, you didn't refute anything. You keep citing the chiemgauer as a shining example of a demurrage currency but it is NOT and here's why: The chiemgauer is BACKED by euros. They deposited euros at a bank and then they issued chiemgauers that are BACKED by euros. THAT is what gives it value. Were it not backed by euros it would be WORTHLESS.

Go on and release your shitcoin already, it will be fun watching it fail.

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Bitinvestor
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July 04, 2012, 03:38:29 PM
 #158

And "while you don't use it" is arguable. You're holding a wildcard, you're using it as an insurance against uncertainty. You enjoy the liquidity that the rest of the users provide you by accepting the currency, why should that be free?

Because I put my faith into it by hoarding it. If you remove bitcoins from circulation the remaining ones will become more valuable.

Those who cause problems for others also cause problems for themselves.
jtimon
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July 04, 2012, 04:06:16 PM
 #159

You said "Whenever a demurrage currency seemed to "work" it was the only option available." And I wrongly assumed that "the only option" implied fiat. I doubt that the grain option was the only one in egypt, but, anyway, your sentence is refuted with my previous examples.

LOL, you didn't refute anything. You keep citing the chiemgauer as a shining example of a demurrance currency but it is NOT and here's why: The chiemgauer is BACKED by euros. They deposited euros at a bank and then they issued chiemgauers that are BACKED by euros. THAT is what gives it value. Were it not backed by euros it would be WORTHLESS.

I refuted your previous "Whenever a demurrage currency seemed to "work" it was the only option available."
To refute it only one counterexample is enough, and I gave you two of them (you can find more here).
Now you're saying "Whenever a demurrage currency seemed to "work" it was backed."
I didn't demonstrate with logic that freicoin will work.
I'm still having problems demonstrating that same thing for bitcoin, even when it's proven by facts.
Go to the mises institute forum to talk about bitcoin and see the results. Didn't you ever heard "bitcoin is not backed" by any goldbug?
Bitcoiners are one step ahead, they only need to understand that the store of value is not a desirable or even possible function of money.
We austrians know that you can't create prosperity by inflating the supply of cash, but we gesellians know that you can hold it back if you allow money to be hoarded, if you allow it be the bridge keeper of trade, and tax every ware preventing the supply of real capital goods from satisfying its full demand (basic interest or so called "time preference" = 0%).

Go on and release your shitcoin already, it will be fun watching it fail.

Wait for your glorious moment of laugh, and let us work for that to happen.
If you don't want to understand our points of view, like others here that don't share our conclusions, get out of the discussion.
Your criticism is sterile in all senses. Your noise is completely useless for everyone here.

2 different forms of free-money: Freicoin (free of basic interest because it's perishable), Mutual credit (no interest because it's abundant)
jtimon
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July 04, 2012, 04:14:05 PM
 #160

And "while you don't use it" is arguable. You're holding a wildcard, you're using it as an insurance against uncertainty. You enjoy the liquidity that the rest of the users provide you by accepting the currency, why should that be free?

Because I put my faith into it by hoarding it. If you remove bitcoins from circulation the remaining ones will become more valuable.

You seem to be talking specifically about arbitraging the value of bitcoin (speculating) rather than the insurance that comes with all the cash-monies.
You can also speculate with freicoin, if it rises from zero to 6$ you would make money despite demurrage.
The point is why the rest of the users of hte currency (the people who actually give it the value it has) give you that liquidity insurance for free?
Can't we chose the rules of the money we use? The rules are the same for everyone just as in bitcoin, you're free to chose the system you prefer or use of or none.

2 different forms of free-money: Freicoin (free of basic interest because it's perishable), Mutual credit (no interest because it's abundant)
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