[ANN] Freicoin: demurrage crypto-currency from the Occupy movement (crowdfund)

[ripper234]

I'll buy them as a speculator, because I expect their price to rise, the same reason why I own bitcoin.

I don't think this is a smart reason.

"I will buy it because it will rise because other will buy it because it will rise ... "

Yes, Bitcoin behaves very similarly to this, but Bitcoin has a clear advantage over its predecessors, while it seems Freicoin has no such advantage, and has to compete with a big market leader, and Freicoins "feature" over it is actually a deterrent to acquiring/hoarding it.

Well, good luck with it ... time will tell whether I'm right about it or not.

[chrisrico]

I'll buy them as a speculator, because I expect their price to rise

Er... you'll speculate that their price will rise faster than they'll incur demurrage fees? Isn't the idea of Freicoin to discourage hoarding? Now you're saying that the only way it can take off is if early adopters hoard it?

[Etlase2]

If Freicoin had been the first crypto-currency, it might have worked. In fact, I believe it would have attracted a very different crowd and attitude too. But as others have suggested in this thread and I'm sure I have at various points in the past, Freicoin isn't going to bring anything new enough to the table. Maybe when bitcoin collapses another 2 or 3 times people will be looking elsewhere. Freicoin is apparently going to still be based on many of the same principles but with the "losing money over time" feature, so I think that it is destined to be JACC* and not really a successor. You should be looking to beat bitcoin to a pulp with the awesomeness of your currency, not "well, Silvio Gesell says this.."

* just another crypto-currency

[maaku]

As for the initial distribution problem, newly-generated freicoins will be sent to the miners. The problem won't be “how do you get people buy freicoins?” but rather “how will we give the miners something to buy?” Initial liquidity may be provided by someone like @jtimon investing based on perceived future value, but this would a relatively short-term stopgap measure until the merchant tools are in place and full circles of commerce can be established. Shortly thereafter market forces will stabalize the Freicoin price, and it ceases to be worthwhile investment to hold on to.

@Etlase2, this isn't a competing concept to bitcoin. In fact the two are completely complementary, and gain value from the existence of each other. I don't believe bitcoin will collapse, and I'm not looking to replace it. If successful we will change how people perceive and use bitcoin, but in a positive way.

@jtimon, there isn't a faq per se but there is a series of questions-and-answers at the end of the campaign proposal.

[chrisrico]

In fact the two are completely complementary, and gain value from the existence of each other.

I still don't see why anyone would, say, exchange their bitcoins to freicoin in order to spend freicoin, when they could just spend their bitcoin instead. In what way does bitcoin gain value from freicoin's existence?

[maaku]

If given that choice, of course spending bitcoins directly is the rational decision. But it's a false alternative. What if you have freicoins (because your business accepts them, your pay is in them, or whatever)? Then it makes sense to buy in freicoins instead of converting to bitcoins first. If you have fiat, the choice between the two is negligibly different.

[chrisrico]

What if you have freicoins (because your business accepts them, your pay is in them, or whatever)? Then it makes sense to buy in freicoins instead of converting to bitcoins first. If you have fiat, the choice between the two is negligibly different.

Let's walk through this...

In the beginning, the only people who have Freicoin (or historically, Bitcoin) are the miners.

With Bitcoin, people had incentive to purchase them from the miners because Bitcoin has unique utility.

Freicoin does not offer any increased utility compared to Bitcoin, so what is the incentive for someone to purchase coins from miners?

If there is no incentive, then the only way for freicoins to begin circulation is for miners to spend them. I don't see this is as being a strong enough driver for adoption, but it is something. In order for this to be successful, there would have to be a significant number of merchants selling goods or services that miners wanted and accepting Bitcoin through a third party that could also allow them to transparently accept Freicoin. I just don't see it happening.

[Etlase2]

@Etlase2, this isn't a competing concept to bitcoin. In fact the two are completely complementary,

And this is exactly why your currency will fail. You don't want to compete, you want to make a feeble bitcoin clone while testing demurrage. With the unbelievable number of problems with bitcoin, you choose to ignore them all except one and use a school of monetary thought to feebly add weight to your claims of what you think will happen.

and gain value from the existence of each other. I don't believe bitcoin will collapse, and I'm not looking to replace it. If successful we will change how people perceive and use bitcoin, but in a positive way.

Yeah people will perceive bitcoin as more valuable and demand it more often than freicoin. The only time I see freicoin being useful is during a price shock period in bitcoin. But because freicoin is still using the same or similar distribution, it is going to have the same problem. All other things being equal, and all other things will be equal, bitcoin will either have a better return for taking it over freicoin, or they might be about equal but freicoin came second. The idea does not compete at all.

Freicoin is definitely a step in the right direction, but it is not nearly enough to overcome the first-to-market power of bitcoin.

[fivebells]

Etiase, I don't want to hijack the thread, so maybe we should discuss this offline, but if you have written down a list of the problems you see with bitcoin, that would make for interesting reading.

[Etlase2]

Etiase, I don't want to hijack the thread, so maybe we should discuss this offline, but if you have written down a list of the problems you see with bitcoin, that would make for interesting reading.

I don't think so although throughout my various proposals I've definitely expounded on a bunch of them. Freicoin may have put a chink in the armor of bitcoin's closed money system, but it doesn't address the underlying manipulation potential. And even free from manipulation, it very, very poorly handles rapid expansion. This is going to set either of these coins back time and time again or until something better comes along. Every new market will be strangled by having to lower prices while everyone in the previous markets gets to benefit. It's silly. I don't have all the problems written down, but I do have most of the solutions here: https://bitcointalk.org/index.php?topic=91183.0 although I have not gone into much technical detail since I drove through most of that during the encoin process.

[jtimon]

I'll buy them as a speculator, because I expect their price to rise, the same reason why I own bitcoin.

I don't think this is a smart reason.

"I will buy it because it will rise because other will buy it because it will rise ... "

Yes, Bitcoin behaves very similarly to this, but Bitcoin has a clear advantage over its predecessors, while it seems Freicoin has no such advantage, and has to compete with a big market leader, and Freicoins "feature" over it is actually a deterrent to acquiring/hoarding it.

Well, good luck with it ... time will tell whether I'm right about it or not.

You don't see it as an advantage, because you ignore some of the costs associated with capital money, like capital yields that can't drop to zero by competition like other economic profits (therefore they're capital rents to a certain point) or monetary cycles.
You don't believe a world with only bitcoin as currency and without fractional reserve would cause monetary cycles, but it would, just like gold has caused them many times before. My point is, they will have a value before merchants accept them.

I'll buy them as a speculator, because I expect their price to rise

Er... you'll speculate that their price will rise faster than they'll incur demurrage fees? Isn't the idea of Freicoin to discourage hoarding? Now you're saying that the only way it can take off is if early adopters hoard it?

Yes, sound kind of contradictory. Hoarding it may make sense while the number of users keeps growing.
The point I was trying to make is that they will have a price/value before eny merchant accepts them, just like bitcoin had.
I was thinking about the regression theorem there. Was trying to answer the question.
 

If Freicoin had been the first crypto-currency, it might have worked. In fact, I believe it would have attracted a very different crowd and attitude too. But as others have suggested in this thread and I'm sure I have at various points in the past, Freicoin isn't going to bring anything new enough to the table. Maybe when bitcoin collapses another 2 or 3 times people will be looking elsewhere. Freicoin is apparently going to still be based on many of the same principles but with the "losing money over time" feature, so I think that it is destined to be JACC* and not really a successor. You should be looking to beat bitcoin to a pulp with the awesomeness of your currency, not "well, Silvio Gesell says this.."

* just another crypto-currency

I expect it to have a more stable value. What do you think about it?

As for the initial distribution problem, newly-generated freicoins will be sent to the miners. The problem won't be “how do you get people buy freicoins?” but rather “how will we give the miners something to buy?” Initial liquidity may be provided by someone like @jtimon investing based on perceived future value, but this would a relatively short-term stopgap measure until the merchant tools are in place and full circles of commerce can be established. Shortly thereafter market forces will stabalize the Freicoin price, and it ceases to be worthwhile investment to hold on to.

Exactly. A money will always need merchants. I was just talking about the initial value.

@jtimon, there isn't a faq per se but there is a series of questions-and-answers at the end of the campaign proposal.

Should we start a wiki or something?

Freicoin is definitely a step in the right direction, but it is not nearly enough to overcome the first-to-market power of bitcoin.

I hope you're wrong here. But of course I can't prove it.

[Etlase2]

I expect it to have a more stable value. What do you think about it?

I think that's like saying you'd prefer an 8.7 earthquake over a 9.0. Sure it's better, but it's still going to be a really bumpy ride. If the entire world adopts bitcoin or freicoin, freicoin would work much better for the economy I think, but getting to world-wide adoption for either currency is a pipe dream with the millions of percent increases required in the value of the closed currency system. If traditional monetary systems start collapsing, closed money systems are going to enslave, not free.

[cbeast]

If traditional monetary systems start collapsing, closed money systems are going to enslave, not free.

Perhaps, but at least they won't enslave people through crony capitalism and printing money with zero percent loans for the elite. In fact, I'm really not sure how they could enslave people at all with Bitcoin. Please enlighten me.

[Etlase2]

Perhaps, but at least they won't enslave people through crony capitalism and printing money with zero percent loans for the elite.

So here you agree that it is a possibility, and quite easily identify some popular mechanisms for the status quo enslavement.

In fact, I'm really not sure how they could enslave people at all with Bitcoin. Please enlighten me.

... and within the span of a sentence doubt yourself. Hindsight is 20/20 cbeast, and most people don't learn very much from history anyway.

[cbeast]

Perhaps, but at least they won't enslave people through crony capitalism and printing money with zero percent loans for the elite.

So here you agree that it is a possibility, and quite easily identify some popular mechanisms for the status quo enslavement.

In fact, I'm really not sure how they could enslave people at all with Bitcoin. Please enlighten me.

... and within the span of a sentence doubt yourself. Hindsight is 20/20 cbeast, and most people don't learn very much from history anyway.

Ah, so hindsight enslaves people. Interesting.

[Etlase2]

Ah, so hindsight enslaves people. Interesting.

No, hindsight shows that people think that they're not making a mistake when they are. I can posit scenarios which I've done in several threads, but I can't prove anything beyond the fact that the sheep go "baa". Did you actually have a change of heart mid-post? Or did you just remember some bitcoin gospel that says that I must be crazy to think there is any potential problem with the bitcoin monetary system?

Either way, this is a thread about Freibitcoin, and I won't change your mind about anything so I won't waste anymore time.

[Explodicle]

What is a "closed" monetary system? A link to those posts where you show how Bitcoin enslaves people would be helpful. I've just been skimming over the EnCoin stuff until it has a working alpha, and almost entirely tune out the "I discovered Bitcoin's fatal flaw!" posts.

[Etlase2]

What is a "closed" monetary system? A link to those posts where you show how Bitcoin enslaves people would be helpful.

A system where the people who have the money control the money. Money needs to be a tool, not a scarce resource to be manipulated. It stores value and facilitates trade. The bitcoin mentality has it so ingrained that scarcity matters because that's how gold works, and gold was less abusive because it was somewhat harder to control than fiat. But gold was still controlled very heavily. This control was originally separate from government so you can't go blaming them. The same thing will happen with bitcoin. If it were freicoin, I don't doubt it would happen there too because you will eventually get an upper class that can start manipulating supply--it would be more expensive though.

I've just been skimming over the EnCoin stuff until it has a working alpha, and almost entirely tune out the "I discovered Bitcoin's fatal flaw!" posts.

:shrug: I don't worry about that stuff anymore. Now it's just about refining all of the ideas.

[nybble41]

The bitcoin mentality has it so ingrained that scarcity matters because that's how gold works, and gold was less abusive because it was somewhat harder to control than fiat.

Scarcity obviously does matter. The alternative to scarcity is superabundance, and why would you offer goods or services in exchange for something you already have in whatever quantity you happen to need? A currency has to be something people desire, and thus will trade for, and that means it has to be scarce.

Of course, there are different ways of ensuring scarcity. You can trade in something that is inherently scarce, like gold (due to nature) or bitcoins (due to math), or you can take something which is not inherently scarce and use force to make it so, as in fiat currency. This seems like a third way, where the scarcity rests on the difficulty of getting existing currency-holders to agree to devalue their own shares, with no apparent benefit to themselves. I'd say that represents a fairly strong guarantee of scarcity, though why anyone would expect others to prefer it over BTC is a bit of a puzzle.

[Etlase2]

Scarcity obviously does matter. The alternative to scarcity is superabundance, and why would you offer goods or services in exchange for something you already have in whatever quantity you happen to need? A currency has to be something people desire, and thus will trade for, and that means it has to be scarce.

The alternative to scarcity is not necessarily "superabundance", there might be a mythical third option where there is "just enough."

This seems like a third way, where the scarcity rests on the difficulty of getting existing currency-holders to agree to devalue their own shares, with no apparent benefit to themselves. I'd say that represents a fairly strong guarantee of scarcity, though why anyone would expect others to prefer it over BTC is a bit of a puzzle.

Because an appreciating currency is a bad thing for investment. I've mentioned in other threads, if businesses can't get BTC loans because they are untenable compared to fiat loans, businesses are not going to accept BTC for payment. This means, wait for it, in the real world, BTC is never going to become as popular as it could be. The price fluctuations, up or down, are going to be very unappealing. Instead of BTC bleeding value off of fiat currency to itself, it feeds from its very own instead. https://bitcointalk.org/index.php?topic=91183.0 if you have any questions about that, ask in that thread.