Since we're not assuming trust, this requires that every participant goes online and researches every receiving address.
Yes, we're assuming some level of trust, but not very high.
If we're honest, the only way to be sure about it is researching
every non-profit address and the charities themselves, or trust
someone else's research.
But if we cheat, it only takes a researcher to locate the proof of
fraud in the chain and show it to everyone.
Do you think this wasted effort is less than the effort wasted by mining? What about charities which close their websites someday after they've recieved funds, are new users expected to check those? Unless you're requiring trust, every user from now until the end of Freicoin will need to spend energy and time performing verification - it's like meatspace mining.
Future Freicoin users may have to trust that someone took the time to
audit the public accounting of an organization that no longer
influences freicoin supply in any way.
I don't think I was being clear here. If mined coins allow for matching funds, then any miner who would otherwise donate to charity has a greater incentive to earn them. So if I gain $1 of utility from donating 1 FRC to the EFF, I would rationally mine all the way to $2/FRC. So I pay $2 to mine 1 FRC @ $1/FRC, but get $2 worth of utility. At best, this means the same amount of energy spent.
Oh, I get your point now.
You're saying "if only miners donate to the non-profits and 100% of
miners mine at a loss only to give 100% of their earnings to the
non-profits, both systems are equivalent."
If frc is valued at 1 usd, miners profits should tend to decline so
that "production costs" equal 1 usd. But if miners are not counting
the 1 frc they receiving but the 1.1 frc the non-profits will get,
they will be ok with incurring 1.1 usd donation losses.
I'm assuming 10% donation matching by the foundation.
But miners can't mine 800 M frc in 3 years, so someone else will have
to make donations too, even assuming all miners donate everything
they get. And the matching of those donations cannot be counted as
production costs by the miners.
I think the comparison to XRP is fair. I can understand your argument that seigniorage can potentially be efficient, but I'd like to see how efficiently these coins are actually distributed when the time comes. My guess is that more time and effort will be spent, and most charities will just convert to BTC and then to local fiat.
I need to repeat that miner's profit are also seigniorage and bitcoin
also has it. But ANY seigniorage is more efficient than costs because
at least someone gets the value instead of it being completely
sacrificed by the community as a whole.
My guess is that more time and effort will be spent, and most charities will just convert to BTC and then to local fiat.
Well, that's very likely to happen, at least at the beginning, but
it's not the end of the world, someone will buy them and they're
already distributed. Of course, the ideal situation would be for them
to spend the FRC directly, but they converting to BTC and spending
them directly would help expand cryptocurrencies too, and it's not so
much to ask because there's already many things being sold for BTCs.
Maaku and I plan to operate a FRC/BTC exchange and offer automatic
conversion from it. So if you have FRC deposits, you can withdraw/pay
BTCs to any bitcoin address directly (and viceversa).
But for merchants that accept both, you will probably prefer to pay
FRC directly to save bitcoin's transaction fee, the trading fee and
the gap between bids and asks.
Believe it or not, there's people that prefer Freicoin's issuance
experiments over btc destruction and xrp privilege, and that's why it
has demand and a market price.
No offense, but I heard the exact same thing from RealSolid of SolidCoin. There is demand for every single alt coin here.
Ok, then just trust my word or ask to them yourself: although they're
still reluctant to use freicoin because of how different it is from
mutual credit, there's many people in the complementary currencies
movement that consider it a great improvement over bitcoin, and at
the same time changes a little bit their perception of bitcoin, which
they tend to criticize aggressively.
Finding out that the issuance doesn't require mining but you still
need it for security seems to make them accept the general concept