It may be because of China NY

New York Rangers 5 @ 6 Columbus Blue Jackets

Memphis Grizzlies 105 @ 116 Golden State Warriors

Charlotte Hornets 104 @ 97 Boston Celtics

Sincerely asking, how does timekoin solve the byzantine general's problem? From what I have read, it doesn't seem to.

The simplest solution, I think, for a crypto currency to eliminate the exchange as an achilles heel, is to become what was called in the stable coins discussion as a "mordor coin".

i.e. no issuance limit. coin issue being tagged to energy use. i.e. coins being issued as long as it is certain to burn a certain amount of energy. The currency experiences atleast 3 drops in value when the technology transitions from  CPU to GPU, GPU to FPGA, FPGA to ASIC and then stablilizes forever.

The name mordor coin comes from the wasteland of mordor since the incentive is to keep running the mines as long as you have access to energy. It is not a pretty picture, but it is a solution to incentivize people to run their own mines instead of approaching exchanges, whenever the price of the coin increases too much from what people can gain by just running their own machines.

Continuing my conversation with Etlase over here.

https://bitcointalk.org/index.php?topic=179918.msg1948749#msg1948749


The idea is not to make P totally stable. The idea is to make MV move along a certain growth path, and keep P stable within a certain range. This will be the expectations anchor in the proposed currency, like the certainty of the money supply is with bitcoin



If the specs are published and discussed, then anyone joining in a new currency will be aware. It is just like those who buy freicoin even after they are aware of the demurrage.


No, my comparison was not with Decrits. It was with a coin that printed more as transaction fees increased.



The term I was looking for and used in the last para - expectations anchor. Every currency will need one.


Nothing can be done about off-chain transactions, those are not visible to the chain. We have to design around them.


No, the hyperinflation point was directed towards a theoritical currency that had a feedback loop that encouraged more coinage as more transactions happened. I don't remember enough offhand about decrits to make such a comment about it.


My initial idea, as quoted was to have a pure mordor coin during an early phase of bootstrapping and transaction fees level targetting after that, minimising the need for energy after that. A steady growth in transaction fees has a good chance of encouraging some miners to stay with the coin.

I appreciate the patience that you have shown with my ideas.  Almost nothing I entered here is a criticism of decrits. Those are, my half baked ideas for a stable coin. I truly hoped that others would respond as well, to get more views. If the price of admission to a stablecoin thread is full understanding of decrits, then i can say that is a high price to pay.

Hi Etlase2,

Do you already have another thread where this discussion can be taken, or should I start a new one?

The thing that is being curbed is nominal transaction fees. Without a trusted Oracle, we have to rely on within-network indicators. Nominal transaction fees is a within-network indicator, that is relatively secure.

Any indicator that affects further results will be prone to abuse. And sorry, I believe the direction of the feedback you describe is not correct. If there are more fees being spent and the system encourages it with printing more money, then even more fees will be spent and even more money will be printed until the coin collapses due to hyperinflation. There needs to be a written down growth path for some indicator. For bitcoin, it is the monetary base itself. I'm discussing the possibility of using the nominal transaction fees as an indicator. One can try to model a good growth path that is high in the beginning and lower later, that is beside the idea of targeting a level of nominal transaction fees.

Hope I've made things a little more clear.

The way I look at it, there is a component of proof-of-work/mordor coin that has to be incorporated into every coin. The question seems to be how to minimise it and still maintain stability.

Another thought.

From Decrits, I got the idea of using transaction fees as a proxy for GDP. In a corner of the blogosphere, targetting a level path for the nominal value of GDP is being talked about as the correct way to target the money supply of an economy. i.e if by a certain time, nominal gdp is not as high as the level calculated by the growth path, then print money. If it is more, then withdraw money from the market by selling assets.

I, personally am in favour of such a policy for statist monetary policy. NGDP does look better than inflation targeting or money supply targeting.

So, a policy appropriate to crypto currencies could be to target a steady growth in nominal transaction fees. Have an initial booting up period where anyone who can bring in a certain amount of hashing power, brings it in and gets coins. It is a pure mordor coin during this initial period. After that (2-3 years, maybe, anybody have any ideas on how to determine when a crypto currency has stabilised?), the targetting mechanism takes over.

If the transaction fees paid in a certain interval of time (maybe a week or fortnight) exceed the level target, then automatically lock up a percentage of the money in every account. Coins that can be used now, lets say block height 99, get locked so that they can't be used till block 149. Ownership is maintained, but usage is constrained
 
If the transaction fees paid are below a level target, then automatic unlocking of locked coins occurs, Coins locked till block height 140 get changed so that they can be used in block 90 and so on.

The level target for transaction fees could be a linearly increasing one, exponential or sigmoid.

I agree. The incentivizing aspects need to be discussed.

My first thought is that similar to what you suggest for distributing new coins to transactions and accounts, it can be modified to transactions and locked coins, maybe weighted by how long they keep it in freeze.

I cannot deny that bitcoin's structure influenced me on this. And I know that the price will run free, even if only a certain percentage of the coins are transactable at any given moment. The question is, does it add a little more stability or not?


I'm sorry if you've answered this one before, but what prevents this from becoming a mordor coin, burning up resources indiscriminately?


Decrits sounds like a very interesting proposal. I need to read it in more detail.

Question for the community - Does ripple already do the below?

Datamine the blockchain and find out if there is a possibility of informing everybody on a fully completed money loop (money that you sent out coming back to you) that they form atleast in miniature, a fully solved double-coincidence of wants problem, and they can potentially, take their transactions off the blockchain or use just notional amounts to transact.

Money is needed for solution of a double-coincidence of wants problem, but if the loop is closed, then everyone in the loop has some goods that the other desires. I understand that for one-offs, this may not be the case, but for business, it could definitely be done, right?

Hi All,

Not much to introduce about myself. Very little technical knowledge, but have an interest in economics and alternate ways of organization of society.

Here are my thoughts on the issue of a stable crypto coin. Caveat, They don't form a coherent whole.

[Thought 1  - Locking of coins] 

There are 2 sources of inflation in a crypto-currency. There are the new coins generated and there is the influx of already existing coins coming into the market on the sell side.

I asked a question earlier in the forum about "locking" of coins, rendering them unspendable for sometime. This would create a clearer picture of the money supply that is in actual usage now.

Right now, people say that a lot of their coins are in cold storage, but we have no way of verifying the same. They can appear anytime in the nearest exchange and drive down the price to whatever the market will bear at that time. So stablecoin needs to have a way of clearly placing coins in cold storage in plain sight, with clear indicators that during the next few hours, days or so, more than X number of coins or Y percentage of coins, simply cannot be traded. Thus, not only is the money supply (M1, is it?) in plain sight, but money placed in short term and long term locked coins (bonds?) is also in plain sight.

The issue really is that these bonds will also be traded and we may be back at the same place where we are now, but atleast merchants who deal only with the coin can be more assured, I think. How to incentivize people locking up their coins publicly, not really sure.

I read a few threads on this and realize that all of your thinking on this is much more advanced, but my above point was not made explicitly anywhere, so I thought it is better to put it out there.

[Thought 2 - Liquidity, Velocity, etc.]

The best suggestion that was made in this regard was coin days destroyed, but coin days destroyed could be manipulated by round tripping to one's own account. To counteract that, one can have a minimum transaction fee. A transaction fee however, is something that should be decided by benchmarking against competitors.

[Thought 3 - Demurrage]

The simplest forms of demurrage are flat percent off every account and a flat fee off every account. One is a flat tax, the other is a regressive tax. For a currency, the first one seems to be the better. An authority imposing a currency may have the second to persuade people to centralise their account (maybe with a bank).

A progressive demurrage may lead to people choosing to split the currency across many accounts, thus not yielding much more than a flat percentage.

[Thought 4 - Incentive]
List of people to incentivize
1. People holding the currency, but not too much
2. Verifiers/miners
3. Merchants providing new and needed products to the community
4. Publicly locked coins

So, there they are, my thoughts or a incoherent ramble, as some might portray it.

Can someone brighter than me answer this one?

Is it possible at all to use one-time pads as he advocates, in any form of crypto currency?
Infact is it even possible to use for a digital currency with a central issuer?
Because if the key is sent out from a central location, isn't it vulnerable to man in the middle attacks?

Formalism and informalism as I explained.


Every favour you seek for your own business is counted as a payment to your business, reducing the net tax paid by that much and reducing your own political power by that much in the next election. This needs a slightly different way of thinking compared to present day institutions. It is possible to imagine an independent body which studies every tax allocation not given out to every person in general (like a negative income tax) and reduces the weight of the taxes paid by the recipient for the next election cycle.

Informal lobbying efforts have a huge return in the present scenario. In the taxpayer's oligarchy, it will be greatly reduced because the payments are out in the open.


In a slightly larger context, I am in favour of competing jurisdictions. This is a suggestion for one such jurisdiction. If a community degenerates this way into a banana republic (banana being whatever commodity/industry dominates), then it becomes highly possible that it will face a talent drain.

Jobe7,

Thanks for you honest opinion.

The difference really boils down to formalism and informalism. Or the difference between a price to be paid for a service and a bribe to be paid for the same.

In situation 1, the price for a good is very clearly laid out and printed in the open. The good is available for anyone who can pay the price.
In situation 2, the price is nominally very low, but the good is often in shortage and somehow, it is only those politically well connected  or those who bribe the keeper, who seem to get access to it.

Situation 1 is the free market and Situation 2 is every socialist license permit raj that has existed.

The situation in contemporary democracies is similar. Nominally everyone is the same. Politicians are guided by the popular appeal and secretly, whatever the lobbyists tell them to do. The policies that result are complicated, filled with exceptions for the lobbyists.

I am not saying that the taxpayers oligarchy is foolproof. But the greatest political power will be with the highest taxpayers and that is a good thing, those who provide the money that the governments works with. The taxpayers ar bthe honest rich. We want to encourage the honest rich and discourage the dishonest rich.

If I'm a genuine business accepting bitcoins, paying my taxes and doing due diligence, then my addresses will be public knowledge. I don't understand what you're trying to say.

Imagine an anarcho-capitalist scenario, insurance covers damages and competitive courts act as arbitrers. Even there, I will not be able to genuinely claim I have been hacked as no one can genuinely say that the hackers address is not something I'm controlling with a sock-puppet. In the case of other stores of value, I can.

EDIT : forgive the formatting, I meant to reply to agree with Gordonium's statement.

Precisely, I meant that only.

You cannot prove a loss.
You cannot claim insurance.

With stocks you can do one, with art or buildings, you can do the other. This will make many rich people vary of holding wealth in bitcoin.

Guys,

I'm reposting my comment from another thread as it is relevant to this thread as well.