Quote from: AnonyMint on December 03, 2013, 11:56:54 AM

Freicoin if I am not mistaken, sends the demurrage into the ether, so those who transact more often see their coin balances decline less fast, thus it effectively redistributes relative coin value to the users of the currency. That could in theory be combined with a proof-of-stake system. The problem is correctly as Impaler described it, how to secure the public ledger.

Although I admire how demurrage distributes directly to those who transact the most, it suffers from the fact that spenders are not necessarily doing anything to secure the coin (except perhaps increasing its long-term value, thus value of mining if coin rewards do not diminish). Spending can even be wasteful and misallocation of capital. Indiscriminately subsidizing spending (or anything) is not good economics. Zero transaction fees would already be a significant gift to spenders. Demurrage also reduces the balances of holders, I find it difficult to conceive how it will be popular. Whereas coin rewards do nothing to balances, and also apparently nothing to coin value since Bitcoin is rising in price while the debasement is currently 12.5% new coins in the money supply this year.

Whereas those who actually mine are proactively using their time, ingenuity, initiative and capital to secure the network, thus it seems more capitalistic they should receive the redistribution from the hoarders. Besides it may be the only viable way to secure the public ledger.

Add if demurrage was paid out as negative transaction fees instead, the problem is this encourages transaction spam (sending to yourself). However the design required to allow zero transaction fees solves this.

So it would be possible to offer a balance between demurrage and perpetual coins. I don't know what the best balance is.

I am actually excited to realize this, and I think Impaler will be too.

Quote from: sangaman on December 03, 2013, 03:38:30 PM

Quote from: AnonyMint on December 03, 2013, 11:56:54 AM

The most significant flaw of any proof-of-stake system and any system that diminishes coin rewards, is it can't distribute currency from the hoarders to the users of the currency, thus it will end up with the hoarders (the banksters) accumulating all the coin and the currency usage dying.

This is because the wealthy spend a much lower % of their net worth than the masses do.

This I disagree with. Do you think bitcoin is flawed in this regard as well? It also has diminishing rewards.

I very much do. Rather than repeat my past 2 weeks of posts, I will just refer you to click my name and then Show Posts.

Quote from: sangaman on December 03, 2013, 03:38:30 PM

Even if it didn't, the coin rewards go to people who can afford mining hardware.

ASICs are not fungible.

ASICs scale too well and result in centralization of mining:

http://www.kotaku.com.au/2013/11/bitcoin-mining-is-getting-out-of-control/

Quote from: sangaman on December 03, 2013, 03:38:30 PM

Even freicoin's demurrage goes straight back to the miners.

I didn't know that. I thought it went to ether and there were separate coin rewards. Indeed that makes sense.

Quote from: sangaman on December 03, 2013, 03:38:30 PM

Poor people that spend most of their income on consumption aren't going to be saving up for ASICs, so their is not necessarily distribution of currency from the hoarders to the users as you describe.

That is one of the problems with ASICs.

Quote from: sangaman on December 03, 2013, 03:38:30 PM

Precious metals have this characteristic as well.

All hard money is horrible for all of us. Impaler and I have been agreeing on this.

Quote from: sangaman on December 03, 2013, 03:38:30 PM

I don't think a large amount of hoarding necessarily leads to the currency usage dying, just as gold and bitcoin haven't died. Where a currency has advantages over other mediums of exchange, its use has value..

Gold has died as a base money. And it has never been a hard currency.