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

[DublinBrian]

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.

Thats actually a pretty good answer for a leftwinger. You must be one of the 0.0001% within the Occupy movement that actually understands economics.

If you give 4.4% of the value of peoples savings, back to the miners as compensation for their work. But you still have an overall finite number of Freicoins. Then that currency will still be a better savings vehicle than most fiat currencies around the world. Major currencies like the Brazilian Real and the Indian Rupee typically lose around 7% of their value every year.

I wish you the best of luck with the Freicoin project.

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[realnowhereman]

If you want to erode the value of all coins held, just "print" more of them at whatever percentage you want to erode at.  It's called inflation.  It's no different from your method of forcibly removing a percentage of all holdings and transferring them elsewhere.

The more important question is -- who gets the advantage of those freshly printed or forcibly extracted currency units?

In bitcoin it's the miners; and we bitcoiners all know that.  We understand that that inflation is the tax we pay to the miners for them to secure our holdings for us.  You will presumably not do that (which raises the question of how you're going to secure your coins), and will instead spend on centrally selected winners?

You objected to the Occu because it was centralised; Freicoin is no better, you're just using a decentralised cryptocurrency to funnel money to central point.  I've already got a currency like that it's called "pounds sterling"/"US dollars"/"euro"/$EVERY_OTHER_FIAT_CURRENCY_IN_THE_WORLD.


I've just read your giant post in more detail.  You are paying the miners the fee.  WTF?  You've made an identical system to bitcoin; but instead of paying miners from inflation you're paying them with a direct tax.  A new question then:

If miners are only paid by taxing existing holdings; how are you going to pay the first miner?  How are the freicoins being issued?  Do we "buy" them from you?

This would actually be funny if you weren't so obviously serious about it.  You've spent a year on this?  You poor deluded fools.

[ffe]

Track

[EnergyVampire]

Hmm.... How is inactivity defined? What if someone wrote a program to automatically transfer the balance every X number of days?

[maaku]

Hmm.... How is inactivity defined? What if someone wrote a program to automatically transfer the balance every X number of days?

Demurrage is applied uniformly, not based on age (which of course would be easily avoidable). With each found block outstanding outputs are reduced by a factor of 8 x 10**-7 (1/1250000). Once difficulty stabilizes so that blocks are found with an average interval of 10 minutes, the comes to a cumulative rate equivalent to 4.4% annually.

What's your timeframe for this? Would you be willing to meet with a contact in Mountain View first?

Yes, I'd love to meet up with anyone interested and local. PM me.

[jancsika]

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.

"Brother can you spare a dime for the bus?"

"Depends on what time the bus departs."

How does the user get a sane experience when the balance is changing every 10 minutes?

[maaku]

Carry a few extra cents? Or more likely merchants will price their goods at slightly less than whole-dollar values, as they seem to do anyway. It takes about 2 months for $1.00 to turn into 99¢.

[jancsika]

Carry a few extra cents? Or more likely merchants will price their goods at slightly less than whole-dollar values, as they seem to do anyway. It takes about 2 months for $1.00 to turn into 99¢.

This is in addition to Bitcoin's current transaction fees, right?  Seems like demurrage would change that fee structure because-- at least in the end game of Bitcoin-- they pay for the system to operate and protect against spam, but with Freicoin you're already paying for the system through demurrage so you just need it for spam protection.

[Explodicle]

I don't get it. If I want to save Bitcoins, and the guy I'm paying wants to save Bitcoins, why would we convert to Freicoins and back just for the transfer? Or any optional inflationary* currency for that matter?

* Demurrage in this case appears to work exactly the same as an increasing block subsidy would.

[hashman]

i think demurrage is an interesting idea and has its place, but in lieu of a real response i will post this  

http://www.theonion.com/video/internet-scam-alert-most-kickstarter-projects-just,28655/

[Bitcoin Oz]

If I want 4% inflation I will leave my money in the bank....

[Bitinvestor]

I don't get it. If I want to save Bitcoins, and the guy I'm paying wants to save Bitcoins, why would we convert to Freicoins and back just for the transfer? Or any optional inflationary* currency for that matter?

* Demurrage in this case appears to work exactly the same as an increasing block subsidy would.

I asked a similar question above and didn't get a reply either. Freicoin can only "work" if you FORCE people to use it.

"Gold is not necessary. I have no interest in gold. We will build a solid state, without an ounce of gold behind it. Anyone who sells above the set prices, let him be marched off to a concentration camp. That's the bastion of money." -- Adolf Hitler

[Sukrim]

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?

Depending on the assumption that they somehow manage to force miners to include transactions: No transaction fees, miner income is paid from the demurrage.

Since the miners will probably anyways need a way to know how much money currently is on each account to pull out their annual 4.4%, they'll have to create a huge number of bitdust transactions each block anyways. Maybe they'll need to include currently pending transactions for that? Anyways, the number of inflation transactions is likely much higher for a long time than the number of actual user transactions...

[Mageant]

Since the miners will probably anyways need a way to know how much money currently is on each account to pull out their annual 4.4%, they'll have to create a huge number of bitdust transactions each block anyways. Maybe they'll need to include currently pending transactions for that? Anyways, the number of inflation transactions is likely much higher for a long time than the number of actual user transactions...

I agree, this concept seems impractical to me because it would cause a huge number of transactions with each block. In fact, the transactions would grow O(n²), with n being the number of account holders.

[jimbobway]

If I run the freicoin client once a year will I get my portion of the 4.4%?  I would do that.

My first impression of freicoin was 'trick coin'.  The bitcoin elite are hoarders but the want a society with growth.  This is sort of like when the gold standard was lifted and the dollar was free floated. The analogy here is bitcoin is gold and freicoin is USD.

[Bitinvestor]

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?

Depending on the assumption that they somehow manage to force miners to include transactions: No transaction fees, miner income is paid from the demurrage.

Right, that is a valid point. In the future when most bitcoins are mined miners will have to be compensated with transaction fees. But I'm far from convinced that the transaction fees would be so high that it would make sense to have a "checking account" denominated in Freicoin.

[herzmeister]

Money is information. That's all it is. Who owes what to whom.

Information is abundant. It's created with every transaction. It's not scarce, it's abundant, while at the same time not inflationary.

Now with today's currencies we cannot meet these requirements. They're impossible to reach with today's tools and technology, for all that we know. Today all money itself is scarce, has a price, be it fiat, gold or bitcoin. This shouldn't be. With an ideal informational currency, there for example wouldn't be any speculation with, as it's just information. But we cannot reach this perfection, only approach it.

Bitcoin is what it is. Maybe not perfect, but solves a lot of problems. To tackle what's missing, I believe an entirely different approach is needed, i.e. not a Freicoin building upon Bitcoin. Ripple comes close, but is based on peer-to-peer relationships of trust, but there are use cases for that (regional trade, business-to-business and supplier/buyer relationships).

Hence I believe it's a dual Bitcoin/Ripple economy that would approach perfection.

[Bitinvestor]

Today all money itself is scarce, has a price, be it fiat, gold or bitcoin. This shouldn't be.

Excuse me, how can I buy a house with money that doesn't have a price?

[herzmeister]

There is the information of what others owe to you from the past, which you can use to (partly) "pay" those who build your house. If you don't have enough "credits", then you will create the information of what you owe in the future to those who build your house.

Again, it's all just information, and it should not have a price in itself. I know it's impossible as it's merely theoretical. That was part of my point I tried to come across with.

[weex]

Two suggestions :

Save users and everyone else a lot of trouble and do your inflation with a block reward that adjusts with difficulty to maintain some reasonable rate. To me 4.4% is a bit aggressive so consider 2-3% after an initial 50 per block phase of a year or four.

Second, choose a new name. Forget about coin being in it and think of the name as your key sales tool. Freicoin is too German-sounding for US users.

Good luck.