Quote from: bitcoin_bug on July 07, 2011, 01:59:08 AM

Bitcoin is getting more and more stable all the time ... just another non-problem.

Wider adoption will introduce more stability will introduce wider adoption will ....

(see chodpaba time series analysis, the waves are getting broader and longer with each cycle => percentage-wise the volatility will decrease)

Before central banks most currencies in Europe were bound to gold or silver. The currencies were mainly used for trade (as opposed to speculation), like you foresee the bitcoin in the future. But the currencies were certainly not stable. I recently read about the influx of gold when the america was discovered and how the price of gold fell to 1/3 of its prior value. Extreme case, but I think you get the point. Bitcoin will get more stable, but will never really be stable.

Quote from: Peter Lambert on July 07, 2011, 02:08:47 AM

Quote from: Stuffe on July 06, 2011, 01:10:59 AM

What I suggest is to change the rules a bit. So instead of just having the miners create 50BTC ever 10 minutes, we set the creation rate based on the velocity of the money.

This is already in the bitcoin protocol. Over time, the block reward is lowered. Transaction fees follow velocity. So just wait, everything will be OK.

Really good point, it will help to stabilize, but surely it wont be enough. Do you really think so and why?

Quote from: MoonShadow on July 07, 2011, 02:41:56 AM

Such a proposal would be subject to manipulation, which disqualifies it for consideration. However, if you insist that your idea is better, start your own blockchain and change the name of your currency. We will let the market decide.

There are ways which you could make this more or less manipulation immune.

Quote from: bitcoin_bug on July 07, 2011, 03:05:56 AM

Quote from: CurbsideProphet on July 07, 2011, 02:55:35 AM

Quote from: bitcoin_bug on July 07, 2011, 01:59:08 AM

Bitcoin is getting more and more stable all the time ... just another non-problem.

Wider adoption will introduce more stability will introduce wider adoption will ....

(see chodpaba time series analysis, the waves are getting broader and longer with each cycle => percentage-wise the volatility will decrease)

As I type, MtGox, Low: 13.51 High: 16.5

That's a change of 22.1% IN ONE DAY. This is stability? For perspective, the Dollar moved against the Euro by 0.8% today. The dollar has fallen against the Euro by about the same 22% margin.... it just took EIGHT YEARS rather than a day.

"more stability" implies relative stability, no? 40% movements have been recorded not so long ago.

For some real perspective, the dollar is 200 hundred years old, bitcoin is 2 years old.

If the dollar was moving 22% in a day against anything after 200 years it would be time to get the hell out.

The dollar is stable because it is more or less based on the system I am proposing.

Quote from: hugolp on July 07, 2011, 05:03:35 AM

Quote from: Stuffe on July 06, 2011, 12:41:52 PM

As I said bitcoin days destroyed would have to be a part of the function. So that transactions of money that just been transacted recently would weigh a lot less. Only when the last transaction of the money was older than some barrier would the transaction weigh in 100% on the total velocity. The time barrier could be set to something like 3 hours, but it would be better to set it dynamically based on the last total velocity. I know the number would not be completely precise, but I think it would still be more so than the velocity when calculated in the real world.

Also a single dude cheating would mean less and less, as more and more people get a hold of money.

Sorry, but this is very very poor. There is no way this is tracking the velocity of money. You are missing all the microtransactions that could be real, and suddenly a guy moves his saved bitcoins (lots of them) to another address and your function would give you a big velocity of money when the guy could be sending it to himself. You are not tracking the velocity of money. The pseudo-anonimity of Bitcoin makes it impossible to track.

.

While not precise, the velocity would be calculated far more precise than that which is used to control the inflation of say, the dollar. They calculate it using a consumer price index, which is itself just a survey of goods and services and how they change. Not very precise, but it works pretty ok.

Quote from: Babylon on July 07, 2011, 07:22:07 PM

This would be a change away from one of the basic concepts bitcoin is founded on. However you could take the sourcecode and make your own velocitycoin, or whatever, that works in this way.

Which concept exactly? Instability?

Quote from: LeonGeeste on July 07, 2011, 11:06:09 PM

Just saw this proposal today. My reaction: NO, NO, NO, NO, NO.

Even if everything you say about your idea is true, that doesn't change the fact that it would be, as you seem to accept, changing the rules. It would be breaking the promise made to every single user that there would be no money creation beyond that specified by the protocol. Not acceptable. So, at most, you've justified starting a *different* bitcoin-like currency, and I wish you the best of luck in getting such an inflationary currency off the ground, though that will be kinda difficult.

But please, only impose this inflation on people who have accepted it; don't change horses midstream on a currency that only has its current popularity because of a promise that it would pull stunts like yours.

Setting all that aside: as others have mentioned, such a system can be gamed through fake transactions, and your time-money system does not prevent this, it just delays it, and encourages the earliest-possible overloading of the block-chain with pointless transactions.

In your defense, this is not an error on your part, but an error of all the economists who advocate NGDP targeting, and its shortcomings here are a direct implication of the unappreciated shortcomigns of NGDP targeting in regular money.

If you want to stabilize the value of Bitcoin, there's only one way: widespread agreement regarding exactly how useful Bitcoin will be. And to do that, you need to remove uncertainty. The protocol itself does a lot already to accomplish this: by having a predictable money supply (appropriately defined). Introducing a new source of uncertainty -- how many more will be produced by your new scheme -- only increases volatility.

First of, it will NOT be an inflationary coin, as I wrote, I am suggesting stable deflation. That said, I understand your point that it is changing the rules and some people are not comfortable with that. As for the fake transactions, the time can be adjusted. Still with three hours, you would need to have a very substantial amount of the total amount of bitcoins to be able to make any real impact. Also that impact would be negated the second you stop transacting every 3 hours. Not a real problem.
NGDP targeting? This is a currency, "Bitcoin land" is not really real, thus it has no National Gross Domestic Product. I am actually proposing inflation/deflation targeting.