Bitcoin Forum
December 05, 2016, 06:50:58 PM *
News: Latest stable version of Bitcoin Core: 0.13.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Pages: « 1 2 [3] 4 »  All
  Print  
Author Topic: Decrits Proposal: Solution for an unbound, energy-related, stable value currency  (Read 7427 times)
Etlase2
Hero Member
*****
Offline Offline

Activity: 798


View Profile
September 14, 2012, 04:16:48 AM
 #41

Is Decrits meant to be a decentralized solution?

Absolutely. Though I would not be surprised to hear an argument that money = power is more centralized than mining pools and hashing power.

Quote
How is the coin minting queue managed? E.g. you say "Once enough minters have joined the queue..."  :  what if there is disagreement about which miners are in the queue or if there are "enough"?

Well the "enough" question is simple because that is part of the protocol. As far as disagreeing, whatever the shareholder says for each transaction block goes. You can think of it like geistgeld if you are familiar where I believe the block target time was around 10 seconds, but there is no competition for creating transaction blocks--only 1 shareholder is allowed to create a block for each specific 10 second window and that's it. I haven't gone much into what happens if a shareholder misses their transaction block because that's a bit hand-wavy at this point.

Like, for example, a node sees blocks 100, 101, then 103 and it enters some kind of safe mode because 102 is missing and transactions can't be guaranteed bad-spend proof (spending more than available in the account balance) until the missing block is resolved (how this will work exactly is the hand-wavy part). It won't particularly affect minters because they don't care about transaction security. And they could start minting at any time or do whatever they want, but a hash of a relatively current transaction block will be part of the data that needs to be hashed, so if they come up with a solution before there are enough minters in the queue, the solution will be invalid and the effort wasted.

1480963858
Hero Member
*
Offline Offline

Posts: 1480963858

View Profile Personal Message (Offline)

Ignore
1480963858
Reply with quote  #2

1480963858
Report to moderator
1480963858
Hero Member
*
Offline Offline

Posts: 1480963858

View Profile Personal Message (Offline)

Ignore
1480963858
Reply with quote  #2

1480963858
Report to moderator
1480963858
Hero Member
*
Offline Offline

Posts: 1480963858

View Profile Personal Message (Offline)

Ignore
1480963858
Reply with quote  #2

1480963858
Report to moderator
Bitcoin addresses contain a checksum, so it is very unlikely that mistyping an address will cause you to lose money.
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1480963858
Hero Member
*
Offline Offline

Posts: 1480963858

View Profile Personal Message (Offline)

Ignore
1480963858
Reply with quote  #2

1480963858
Report to moderator
tytus
Sr. Member
****
Offline Offline

Activity: 276



View Profile WWW
September 14, 2012, 09:23:16 AM
 #42

Etlase2, I agree with markm
Seems like one could get a bunch of IP addresses and share your hashing power out over them to appear to be many individual users, maybe even an entire mining-group of forty users for example?
You offer a very complicated production process to achieve improvement over BTC generation, but what improvement do You want to achieve? If You give additional befits to miners just for being a miner, then why not just give a coin [or coin fraction] to every miner and that's it. Whatever You propose it must be simple to comprehend. You have only a minute to attract an adopter. You can explain BTC generation in one sentence [with few additional sentences that go into details if this is required].

"BTC is rewarded for solving a mathematical equation that takes substantial amount of computing power to produce". That's it. This explains everything (even if it is not 100% correct).

Now You have a crazy addition ... after some period You get half of the reward ... A confusing, surprising and definitely not necessary addition [but it helps getting early adopters].
You must be able to present the money generation process in such a short way.

BTC uses a solution of a hashing problem to proof value (work) only because the program can not read and validate an electricity bill and convert it into BTC. There was no other simple way to proof value to a computer program so electricity providers profit most from the BTC community :-) There are other ways to proof value. You could monetize traffic on web pages. => You proof traffic and get rewarded in "BTC-traffic". The network can than take advantage of this and sell the space you have buy providing it to advertisers that have to burn (destroy) "BTC-traffic" coins to display adds there. After 1-2 years You can compete with google and the network would be worth more than google :-) but this is just another example to proof value.

I think You want to award coins to members just for being a member and doings something small. There must be simpler ways to do the awarding so that it can be explained in 1-2 sentences.

PicoStocks.com, High-tech startup fundraising, evaluation and profit sharing
Etlase2
Hero Member
*****
Offline Offline

Activity: 798


View Profile
September 14, 2012, 10:30:30 AM
 #43

but what improvement do You want to achieve?

The ability to create and unbounded amount of currency without causing general price inflation (or slightly more accurately without any loss of real value due to possible price inflation caused by currency creation).

Quote
"BTC is rewarded for solving a mathematical equation that takes substantial amount of computing power to produce". That's it. This explains everything (even if it is not 100% correct).

It also explains everything in the same sense ("not really explained" Wink) in Decrits. There is obviously a lot more going on under the hood in both situations.

Quote
Now You have a crazy addition ... after some period You get half of the reward ... A confusing, surprising and definitely not necessary addition [but it helps getting early adopters].

I'm not sure what you mean here or to which part you are referring.

Quote
You must be able to present the money generation process in such a short way.

I must also be able to give solid logic and thorough explanations to the people here who will be very critical of anything that isn't directly related to the mostly proven idea of bitcoin's currency creation. This proposal is not here to attract early adopters, it is here to attract scrutiny and discussion and potential for new and better ideas. I will work on dumbing the ideas down to a digestible fashion when people can download and run the software.

Quote
You could monetize traffic on web pages. => You proof traffic and get rewarded in "BTC-traffic". The network can than take advantage of this and sell the space you have buy providing it to advertisers that have to burn (destroy) "BTC-traffic" coins to display adds there.

This is not a decentralized solution.

tytus
Sr. Member
****
Offline Offline

Activity: 276



View Profile WWW
September 14, 2012, 10:52:19 AM
 #44

Quote
Now You have a crazy addition ... after some period You get half of the reward ... A confusing, surprising and definitely not necessary addition [but it helps getting early adopters].
I'm not sure what you mean here or to which part you are referring.
BTC reward halving ("You"=BTC).
Quote
You could monetize traffic on web pages. => You proof traffic and get rewarded in "BTC-traffic". The network can than take advantage of this and sell the space you have buy providing it to advertisers that have to burn (destroy) "BTC-traffic" coins to display adds there.
This is not a decentralized solution.

Why not :-) a client checks if the advertisement space is really available and confirms the block. Any client can do this.
You then buy advertisement space anywhere with a client by providing the content and destroying BTC.

Alternatively You could generate blocks by actually displaying the content if You can proof views.

anyway ... this was just an alternative (not well crafted idea of an) option to proof value. You can consider other solutions of values that can be proven to a software program. If You define what is the value in decrits it will be easier to comprehend.

PicoStocks.com, High-tech startup fundraising, evaluation and profit sharing
Etlase2
Hero Member
*****
Offline Offline

Activity: 798


View Profile
September 14, 2012, 11:09:08 AM
 #45

Alternatively You could generate blocks by actually displaying the content if You can proof views.

But you can't. Part of the smart property of bitcoin's coin creation is that it is very hard to produce and very easy to verify. How can anyone prove views? You are relying on someone to say "yeah there were views." There is no decentralized, easy to verify proof.

Quote
If You define what is the value in decrits it will be easier to comprehend.

There are a hundred ways to realize the value of a cryptocurrency. Significantly reduced transaction costs; no government or central bank manipulation; difficult to trace transactions; ease of international trade; and so on. As with everything of value, it is given value by those that ascribe value to it. I believe the ability to democratically* and organically control the currency's creation is of significant value. Thus democratic credits. Tongue Bitcoin proponents may not agree.

* social equality, not a reference to the voting system

tytus
Sr. Member
****
Offline Offline

Activity: 276



View Profile WWW
September 14, 2012, 11:33:13 AM
 #46

Alternatively You could generate blocks by actually displaying the content if You can proof views.
But you can't. Part of the smart property of bitcoin's coin creation is that it is very hard to produce and very easy to verify. How can anyone prove views? You are relying on someone to say "yeah there were views." There is no decentralized, easy to verify proof.

The person who paid can be trusted because he paid :-)

1. the advertiser pays 50btc to display 10000 ads
2. he puts code on the displaying web pages that gives him confirmation where (ip) the add was clicked and who (ip) clicked
3. he sends the confirmations back to the network

=> this can be decentralized with some cheat protection
- You can reward the web pages that displayed the add with 50% of income the network with the rest [all owners of coins]
- You can limit the reward for each web page ip so that the advertiser can not cheat by crediting everything to his web page ...

The generation of a currency will be just a byproduct of this business. You can then use the existing hashing system without any block reward just by paying with transaction fees for hashers.

If Your proof of value is based on computation it will be related to computing costs [energy + depreciation of equipment]. If You add rewards for just being part of the network You have an additional problem of fake members [multiple ips] ... the same problem that I would have with proving views / clicks :-)

PicoStocks.com, High-tech startup fundraising, evaluation and profit sharing
Etlase2
Hero Member
*****
Offline Offline

Activity: 798


View Profile
September 14, 2012, 11:47:12 AM
 #47

=> this can be decentralized with some cheat protection
- You can reward the web pages that displayed the add with 50% of income the network with the rest [all owners of coins]

This could result in never-ending inflation that doesn't care about price levels. It would be easy to spam these proofs to yourself and flood the network or what have you. It is not very elegant, unfortunately.

Quote
- You can limit the reward for each web page ip so that the advertiser can not cheat by crediting everything to his web page ...

Using external information puts the integrity of the system at risk. I don't want to go off on this tangent, so I'll just leave it as "not a good idea." Sorry. Kiss

Quote
If You add rewards for just being part of the network You have an additional problem of fake members [multiple ips] ... the same problem that I would have with proving views / clicks :-)

I see now that you misunderstood the point that markm was making. There is no added reward for using multiple IPs. As I told him, IP addresses don't even come into the equation with creating new money. There is no benefit for joining the queue multiple times unless you can back it up with multiples of hashing power. It is in fact risky because you could see zero return on your 0.2 coin investment if you take too long to provide proofs of work.

tytus
Sr. Member
****
Offline Offline

Activity: 276



View Profile WWW
September 14, 2012, 12:18:06 PM
 #48

There is no benefit for joining the queue multiple times unless you can back it up with multiples of hashing power.

:-) Of course I can back it up with multiples of hashing power. My client will calculate how many spots in the queue I should take and take the optimum amount.
=> if it is not related to IP [number of network members] the reward system becomes reduced to the cost of energy [+ hardware depreciation] as value.

PicoStocks.com, High-tech startup fundraising, evaluation and profit sharing
Etlase2
Hero Member
*****
Offline Offline

Activity: 798


View Profile
September 14, 2012, 12:46:34 PM
 #49

:-) Of course I can back it up with multiples of hashing power. My client will calculate how many spots in the queue I should take and take the optimum amount.

Exactly.

Quote
=> if it is not related to IP [number of network members] the reward system becomes reduced to the cost of energy [+ hardware depreciation] as value.

Plus (computer) time, plus a profit margin. Though those margins will probably be diminished because of the coin multiplier. However, this means people mint when the value of currency is too high--the intended design. This is a good thing for something that tries to achieve a stable value, don't you think?

tytus
Sr. Member
****
Offline Offline

Activity: 276



View Profile WWW
September 14, 2012, 03:20:01 PM
 #50

Absolutely. But it is also essentially the same as BTC without block halving.

To gain stability [resistance against speculative changes] the currency must be just large [total value of all coins]. BTC will also converge to stability with time, when the value of all bitcoins becomes large. If You want to speed up this process You must generate value [burn energy] faster. This can be achieved by keeping a larger profit margin [incentive to burn energy :-)].

PicoStocks.com, High-tech startup fundraising, evaluation and profit sharing
Etlase2
Hero Member
*****
Offline Offline

Activity: 798


View Profile
September 14, 2012, 09:33:32 PM
 #51

Absolutely. But it is also essentially the same as BTC without block halving.

Never has a more rage-inducing sentence been written. Wink Block rewards that don't halve would be an example of disinflation, which will almost certainly still lead to price deflation or general instability in price levels.

Quote
To gain stability [resistance against speculative changes] the currency must be just large [total value of all coins].

This is not historically correct. If we want to take gold, for example:

http://upload.wikimedia.org/wikipedia/commons/thumb/9/9c/Gold_Spot_Price_per_Gram_from_Jan_1971_to_Jan_2012.svg/800px-Gold_Spot_Price_per_Gram_from_Jan_1971_to_Jan_2012.svg.png

There are many more factors at play than just having a large total value. And that is just speculative change--that doesn't address actual, economic change. Like, for example, the business cycle. Something that is oft-argued by bitcoin proponents to be something that bitcoin will address, which I wholeheartedly disagree with. I've used the term "BitStreet" to describe the manipulation that I think will absolutely occur has already occurred with a limited commodity currency. Without the ability to create new currency as needed, banks will hold disproportionate power over the economy. Power = Wealth2 rather than simply Power = Wealth. Wealth, value, and productivity will once again trickle up the chain and there will be nothing that the people can do about it (except ditch bitcoin in bitcoin's case). Begin economic depression, wealth buys up durable goods, middle and poor lose years of productivity; rinse repeat same scenario as modern fiat.

Quote
If You want to speed up this process You must generate value [burn energy] faster.

The process doesn't need to be sped up, the process needs to react to economic activity in a sane manner. Drastic currency appreciation is not a sane route because it incentivizes manipulation and runaway deflation until powerful actors decide they can't pass up the opportunity to flood the market either via lending (rinse, repeat) or via fiat exchange; either way causing currency depreciation. A cycle, if you will, rather than anything close to an orderly expansion. And this cycle will happen every time the bitcoin market expands--there isn't even the potential for a gold rush as that possibility has come and gone and increasing production towards currency creation bears no fruit other than increasing currency appreciation even more.

The Decrits proposal, economically, is not anything remotely close to the same thing as BTC without the award halve.

tytus
Sr. Member
****
Offline Offline

Activity: 276



View Profile WWW
September 15, 2012, 10:13:23 AM
 #52

Absolutely. But it is also essentially the same as BTC without block halving.
Never has a more rage-inducing sentence been written. Wink

And this was probably a reply to Your post number 1000? What a moron ... [sorry :-)]

The total value of gold is US$10.1 trillion [http://en.wikipedia.org/wiki/Gold_reserve]
The total value of cash dollars is US$800 billion [http://en.wikipedia.org/wiki/Gold_reserve] (maybe there is more ... but I can not find a good source of info on that)

Now You probably wanted to show that gold is prone to large value fluctuations. Maybe it is not gold, maybe it is the dollar :-)

This was my question about stability. How do You define it ... what is the reference standard. Only after this we can check if the system you propose will deliver the expected stability.

You wanted relation to energy costs [energy as reference]. Don't You have this in BTC ? The halving will now change the exchange rate BTC~Energy by 100%.

The Decrits proposal, economically, is not anything remotely close to the same thing as BTC without the award halve.

You get these stupid posts only because Your model is too complicated and average people can not follow :-)

PicoStocks.com, High-tech startup fundraising, evaluation and profit sharing
tytus
Sr. Member
****
Offline Offline

Activity: 276



View Profile WWW
September 15, 2012, 11:51:25 AM
 #53

Of course the value of BTC would follow energy costs better if there would be no network wide difficulty changes and miners would just mine faster to meet the demand.
The improvement in hardware would cause inflation as you get more hashes / joule. To keep the value more or less constant the hardware effect would have to be be evaluated / compensated, but I could imagine an inflation rate that corresponds to hash/joule. there would be little hoarding but the currency would be still a valuable transaction medium.

PicoStocks.com, High-tech startup fundraising, evaluation and profit sharing
Etlase2
Hero Member
*****
Offline Offline

Activity: 798


View Profile
September 15, 2012, 12:18:18 PM
 #54

Now You probably wanted to show that gold is prone to large value fluctuations. Maybe it is not gold, maybe it is the dollar :-)

This is a semi-valid argument. The top and bottom lines on the gold graph are inflation-adjusted values though. The problem with "inflation-adjusted" is that this is based on the consumer price index (CPI) which many people will argue is a flawed way to measure the inflation rate, but it's really the only thing we've got, and it is accurate enough.

Quote
This was my question about stability. How do You define it ... what is the reference standard. Only after this we can check if the system you propose will deliver the expected stability.

The example I used with the encoin proposals is was something along the lines of "If a loaf of bread costs 1 encoin in 2012, then a loaf of bread will cost 1 encoin in 2050, assuming the production costs of bread have not changed." But such a thing is insanely hard to accomplish, and a more accurate description for Decrits would add something like, "unless the cost of currency production has changed, in which case if a loaf of bread costs 2 decrits in 2050, a coin saved from 2012 will now be 2 about coins (because of the coin multiplier)." Many of the risks (and incentives) added to creating coins is intended to make such a situation as unlikely as possible, but I can't guarantee it, so instead I guarantee you "free money" to make up for it. I suppose I should add something like this to the abstract.

Quote
You wanted relation to energy costs [energy as reference]. Don't You have this in BTC ? The halving will now change the exchange rate BTC~Energy by 100%.

BTC does not have this because the cost of creating currency generally follows what the currency is valued at. If demand for BTC is high and the value increases, demand for creating currency by mining is increased as well, and anyone who mines receives less currency for their mining efforts. Energy/hardware costs increase to meet the value of BTC whereas the value of decrits would decrease to meet the energy/hardware costs, resulting in much more stable price levels, and the inability for the wealthy/banks to manipulate the supply in order to make themselves even more wealthy.

Quote
You get these stupid posts only because Your model is too complicated and average people can not follow :-)

I also spent much more time on technical details rather than economic details with the Decrits proposal, mostly because few believed what I said could be possible for Encoin, so I set to prove them wrong.


Of course the value of BTC would follow energy costs better if there would be no network wide difficulty changes and miners would just mine faster to meet the demand.
The improvement in hardware would cause inflation as you get more hashes / joule. To keep the value more or less constant the hardware effect would have to be be evaluated / compensated, but I could imagine an inflation rate that corresponds to hash/joule. there would be little hoarding but the currency would be still a valuable transaction medium.

This leads to the currency being a poor store of value. I want Decrits to be both a fantastic transaction medium as well as a great store of value. Bitcoin is a great store of value, but not such a great transaction medium.

tytus
Sr. Member
****
Offline Offline

Activity: 276



View Profile WWW
September 15, 2012, 12:59:29 PM
 #55

The reasons for gold value fluctuations are in the instability of other currencies though. If You have a stable currency than You risk destabilization because people will trade other unstable currencies against You. You would have to have a total value much bigger than gold to be resistant.
Remember the problem of Switzerland ? :-)
http://www.theweek.co.uk/business/2433/swiss-national-bank-pegs-franc-euro [just a top hit from ggle]

Some instability can not be avoided. Also pegging to energy transfers the effort of the community to energy suppliers [and increases energy consumption, imagine green peace demonstrations against BTC-like currencies :-)]. You wrote, You want to avoid this ... I have to read about this (scary) multiplier concept :-)

PicoStocks.com, High-tech startup fundraising, evaluation and profit sharing
Etlase2
Hero Member
*****
Offline Offline

Activity: 798


View Profile
September 15, 2012, 01:20:39 PM
 #56

The reasons for gold value fluctuations are in the instability of other currencies though.

The instability of other currencies did not cause the gold spike in the late 70s, speculation of the instability of other currencies did. As it turned out, the sky was not falling.

Quote
If You have a stable currency than You risk destabilization because people will trade other unstable currencies against You. You would have to have a total value much bigger than gold to be resistant.
Remember the problem of Switzerland ? :-)
http://www.theweek.co.uk/business/2433/swiss-national-bank-pegs-franc-euro [just a top hit from ggle]

This is exactly the situation that Decrits can handle so easily though. "Decrits is so stable while all this other crap sucks! BUY ALL THE DECRITS!" And then currency production ramps up and keeps the price/value relatively stable, at least over time. What would eventually happen is that Decrits would become worth more vs. fiat currencies because nobody wants fiat anymore, but this would not affect the price of a loaf of bread in Decrits.

Quote
Some instability can not be avoided. Also pegging to energy transfers the effort of the community to energy suppliers [and increases energy consumption, imagine green peace demonstrations against BTC-like currencies :-)]. You wrote, You want to avoid this ... I have to read about this (scary) multiplier concept :-)

Many people make the argument that bitcoin is not energy-inefficient because of all the energy wasted storing, transferring, securing fiat. I don't really buy it, but the same argument applies here but divided by 10 for creating currency, and divided by almost zero in securing the currency. I think Friedman estimated that gold production at one point was around 0.5% of the US's GDP. If the world economy can ever reach a steady state (which might be a lot more likely with a stable currency), then very little energy is needed. Efficiency gains in old products can cause natural deflation while new products soak up the difference and allow everyone to be wealthier.

In my consciousness stream notes I mention a special transaction that destroys currency so this can be used as proof to transfer it to a new currency. The new currency could accept Decrits destruction for some time, but then eventually sever ties. This new currency could be without any form of money creation at all.

tytus
Sr. Member
****
Offline Offline

Activity: 276



View Profile WWW
September 15, 2012, 04:22:38 PM
 #57

burned decrits did belong to somebody. Somebody would have to pay for burning it. Defending the currency against inflation [or collapse of credibility] is more difficult than against deflation.

You would have to implement ways to add value to the currency by giving away something for burning decrits.

Take for example my ad idea :-) If somebody wants to display an ad on all bitcoin clients during the next block he has to pay (burn!) 1BTC [or some value based on the best bidder]. The display can be implemented easily in the client and you get an appreciation of the value by selling the attention of all bitcoin enthusiasts :-). You can easily extend this idea to bitcoin browsers ... but we left this tangent :-)

The burning is trivial to implement. Either You define a transaction that gives always false or You send it to the account 11111..... [or some other fancy value] and than you have an interesting race to discover the private key to this address :-)

PicoStocks.com, High-tech startup fundraising, evaluation and profit sharing
chrisrico
Hero Member
*****
Offline Offline

Activity: 496


View Profile
September 15, 2012, 04:27:55 PM
 #58

The display can be implemented easily in the client and you get an appreciation of the value by selling the attention of all bitcoin enthusiasts :-)

Until someone forks the client and removes those ads...
tytus
Sr. Member
****
Offline Offline

Activity: 276



View Profile WWW
September 15, 2012, 04:29:34 PM
 #59

The display can be implemented easily in the client and you get an appreciation of the value by selling the attention of all bitcoin enthusiasts :-)

Until someone forks the client and removes those ads...

to get the inflation back :-)

PicoStocks.com, High-tech startup fundraising, evaluation and profit sharing
Etlase2
Hero Member
*****
Offline Offline

Activity: 798


View Profile
September 15, 2012, 04:43:12 PM
 #60

burned decrits did belong to somebody. Somebody would have to pay for burning it.

The point was to move value to another currency if one so desired--there is no actual destruction of value. Bitcoin can accomplish the same thing with an address like 1111 or whatever like you said, but this was just a way to sanction it as well as remove the record of that currency from existence instead of leaving it sitting around in an inaccessible account.

Quote
Defending the currency against inflation [or collapse of credibility] is more difficult than against deflation.

You would have to implement ways to add value to the currency by giving away something for burning decrits.

In earlier versions of the Encoin proposals such a thing existed--destroying unrefunded transaction fees. However, Red originally brought up the idea of arbitrage, killerstorm mentioned it in this thread, and I think it makes sense. If the trade value of the currency is typically below its cost to produce, it presents an opportunity for arbitrage. People will want the currency simply because they know it would cost more to create it than they can buy it for. This is something bitcoin cannot defend against, because there is no mechanism for finding the true cost to create currency. In effect, I am willing to wager that bitcoin is more likely to experience extended periods of gross inflation than decrits. Like say, 1600% in a few months.

Now if there is a collapse of credibility, that is a different story and one that cannot be solved by destroying currency or whatever else. Every currency can suffer from this problem. Every single one. There isn't much you can do to fix it except hope that it rarely happens (or isn't permanent) by making the foundation for the currency solid. If the cryptography behind bitcoin or decrits is broken, that's it, game over. Destroying currency won't help.

Pages: « 1 2 [3] 4 »  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!