Quote from: hugolp on July 01, 2011, 06:53:00 AM

Since both those thing are not scarce, why would you back a currency with them? For example, do you thing anyone woul trust a currency backed by leafs? No, because leafs are very abundant.

Scarcity is relative. There is clearly a limit on the # of processors or # of hard drives that will fit on earth. The only difference is things like gold have nearly already been exhausted, while silicon/hard drives have not.

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Clearly you need to give it more though. How do interest rates affect the economy? Is is possible for one person (or a group) to centrally plan interest rates? Its not a problem of corruption, it is a problem of limited information.

And what would be the result of "democratically" selected interest rates in the economy? How would peple know with their limited information and their personal incentives what are the interest rates needed?

Good point and I agree there are problems. All I am doing is proposing the best I can think of. How would you do it? Bitcoin now is basically Satoshi wrote the rules and everyone follows them. All I'm proposing is a system where people can easily "dissent", make their own rules, and if enough people follow, actually change things.

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That is not price inflation indeed, but if that were to happen with money that would be monetary inflation. Why is that bad? Because it creates bubbles. Check the 20's. There was almost no price inflation, Irving Fisher said the Fed was doing a great job at managing the monety supply and creating the correct monetary inflation to keep prices stable. But hiding behind the price index there was a bubble forming in the stock market due to the monetary inflation that popped in the crash of 1929.

Having some price index constant is not a good monetary objective and does not matain a healthy economy.

I don't understand this part but I want to. Could you link me to something that explains this further?

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This is very wrong. Bitcoin is inestable because its a small market and when new money comes in it has a big influence. If you start your new hashcoin it will be unstable as well, no matter how much does it "cost" to produce.

Also, let me predict that your hashcoin would be accused as well of being a ponzi scheme, because those acusations come from not liking Bitcoin and wanting to attack it some way and from envy, not from really thinking that it is a ponzi scheme.

I disagree with both points. I think both of these problems are caused by the following fact: The price per CPU cycle on average is fairly consistent to people. But bitcoin is priced so 1 BTC generation costs not 1 cycle, but rather proportional to total cycles in bitcoin network. The latter quantity is quite inconsistent. You can see this in the markets: as collective power has stabilized, price has stabilized. When difficulty went from < 100k to > 1M was when the massive price swing took place. Pricing a bitcoin now essentially involves conjecturing the future network size, which is what makes it extremely difficulty to do.

Second, people are not thinking this way out of dislike for anything bitcoin like. It is indeed because they feel it is unfair that the coins they make now that cost 1M times as much to generate are worth the same as those who generated years ago.

Quote from: foreverD on July 01, 2011, 11:27:48 AM

Voting will make the number of generated coins highly unpredictable. You are setting up a system prone to positive feedback loops that could create even more price instability.

I don't think that most people will vote altruistically or in the name of economic stability. A lot of miners will just vote for a very high number hoping to bring the weighted median up so they can make a few more coins. Once people get used to the fact that the block award keeps rising, they will vote for even bigger increases hoping to make up for the loss of value of their coins. Hyperinflation could result.

Even your idea of "vetoing" for upper and lower bounds will be "abused" for selfish means: Many miners will set lower bounds (that they keep raising) simply to make sure other voters don't bring the median down again.

If this is true, then if I wrote a bitcoin client that colluded to give miners more coins, they would use it. I don't think that's the case. I think people can understand that if they do these things, the coins they are generating become totally worthless because noone has faith in them anymore.

Quote from: foreverD on July 01, 2011, 11:27:48 AM

Here is a much less corruptible scheme that addresses your concerns:

Number of coins awarded per block = Difficulty

Simple, predictable, easy to understand by everybody, and likely to lead to (more or less) stable prices because difficulty is roughly proportional to the size of the economy.

See point (3). The problem is inflation due to Moore's law. The purpose of changing difficulty is to counteract the fact that computation depreciates.

Quote from: foreverD on July 01, 2011, 11:37:52 AM

And here lies the problem. A system that relies on hope.

The current bitcoin implementation, despite all its flaws, has one feature the gives it a huge amount of resilience: A decision that is in the selfish interest of an individual user is usually also in the interest of the bitcoin network as a whole. It doesn't matter who the user is or what his motivations are. Bitcoin is agnostic to things like hope and ideology.

In the system you're suggesting, a decision that is in the selfish interest of an individual user is detrimental to the network as whole. It's a tragedy of the commons of sorts.

I'm not saying such a system can't work, but it's a lot more vulnerable than the current bitcoin implementation.

No, a single selfish individual decision is not bad. 51% of people making them is. I agree with you this is somewhat troubling, and personally I worry that there may be miners who are not smart enough to see why voting to raise issuance is a bad idea. Fortunately the upper/lower bd gets around that.

Anyway thanks those who have replied so far for constructive feedback, but it looks like unhelpful persons are starting to show up. Before this thread gets worse, I just want to reiterate the following point.

We basically already have this system in place, but just implemented in a very inefficient way. If I don't like the rules, I must (a) write a new client, (b) distribute it, (c) explain/debate with other people why my rules are better (d) get them to them switch. The purpose of "hashcoin" would be to recognize this and streamline it, making it very easy for people who are unhappy with the current rules to find each other and fork the chain. In other words, what I'm really proposing is not philosophical or economic at all, but purely practical: writing a client that has built-in-support for doing steps (a) and (b) automatically. Thus, if you are unhappy, you need only do (c) and (d). The goal is to write a system with the goal in place of "how can I make it so that, if people don't like this system, they can very easily change it themselves without having to write any code or forcing everyone to start over".

Indeed, I suspect there are people with economic backgrounds that have much better ideas for parameter settings than I do as a CS. All I am proposing is essentially a system where such people can put their parameter settings into place without writing any code.