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Freicoin - easy-to-use demurrage currency

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Re: Freicoin - easy-to-use demurrage currency

#51

Post by gluczywo »

h2s wrote: post #33

Does anybody else feel that the current proliferation of P2P cryptocurrencies looks symptomatic of a pyramid scheme that has proven its viability (in the form of BTC) and is now being repeated by unscrupulous copycats who smell a quick buck? I'm not calling the concept of BTC-style cryptocurrency a deliberate, malicious pyramid scheme in itself. I think this is an unintended side-effect.

I wouldn't call it a side-effect but rather history recurrence. When fiat money became popular in 19th century almost each country started to issue its own currency. Issuing money gives real power. While the analogy is not complete because you can't dilute BTC-style currencies, the advantage here is in being bright and early adopter.

I think that demurrage proposed by Freicoin adds no value because hoarding isn't a real problem for Bitcoin or for any other currency. I suppose that the fear of hoarding comes from the fact that we still live in the world full of harmful keynesian ideas.

Re: Freicoin - easy-to-use demurrage currency

#52

Post by khuey »

jimktrains2 wrote: post #48
h2s wrote: post #33

Does anybody else feel that the current proliferation of P2P cryptocurrencies looks symptomatic of a pyramid scheme that has proven its viability (in the form of BTC) and is now being repeated by unscrupulous copycats who smell a quick buck? I'm not calling the concept of BTC-style cryptocurrency a deliberate, malicious pyramid scheme in itself. I think this is an unintended side-effect.

I'm still not getting why people call it a pyramid scheme. I don't make money by getting other people involved. Sure, by getting others involved I increase the likelihood of it succeeding, but...that's everything.

If there's a fixed supply increasing demand by getting more people involved raises the price, which makes current BTC holders money.

Re: Freicoin - easy-to-use demurrage currency

#53

Post by khuey »

alexjeffrey wrote: post #34
wcoenen wrote: post #30

Earlier quoted context omitted.

> That is, what is in it for me to use freicoin? Perhaps the advantages of bitcoin but without the instability. If bitcoin continues to go through boom and bust cycles that change its value by orders of magnitude, then ironically an alternative with demurrage might prove to be a better store of value. You might lose some of your savings, but at least it'll be predictable.

that's not a very compelling argument given traditional-currency savings accounts will at least grant you very small interest rates.

Fiat currency savings accounts almost universally have negative rates of real return. (The small amount of nominal interest is cancelled out by a couple percent per year of inflation).

Re: Freicoin - easy-to-use demurrage currency

#54

Post by jimktrains2 »

khuey wrote: post #52
jimktrains2 wrote: post #48

Earlier quoted context omitted.

I'm still not getting why people call it a pyramid scheme. I don't make money by getting other people involved. Sure, by getting others involved I increase the likelihood of it succeeding, but...that's everything.

If there's a fixed supply increasing demand by getting more people involved raises the price, which makes current BTC holders money.

That's true for anything though. If I convince you to get into model trains it's not because it will significantly raise the after-market value of my current (rolling) stock.

Re: Freicoin - easy-to-use demurrage currency

#55

Post by khuey »

aethertap wrote: post #28
nodata wrote: post #14

Earlier quoted context omitted.

Encouraging currency to be used/passed around more is not a bug for me. Might interest you: http://www.lietaer.com/2010/03/the-worgl-experiment/

I can't speak for others, but in my case, if I came to possess some of this currency I would immediately seek a way to convert it into something that would not decay as I kept it. I think that saving money for both unexpected problems and future investments is an important part of social responsibility, and I would not adopt a currency that was deliberately designed to make saving difficult unless it was forced on me…

Yes, the point is to get you to convert the currency into something that doesn't decay. That keeps the money supply flowing and encourages you to invest in productive assets, both of which are good for society. A deflationary currency encourages you to stuff all your coins under your mattress.

Re: Freicoin - easy-to-use demurrage currency

#56

Post by khuey »

jimktrains2 wrote: post #54
khuey wrote: post #52

Earlier quoted context omitted.

If there's a fixed supply increasing demand by getting more people involved raises the price, which makes current BTC holders money.

That's true for anything though. If I convince you to get into model trains it's not because it will significantly raise the after-market value of my current (rolling) stock.

Except that model train manufacturers can raise production to maintain a price equilibrium (and have an incentive to do so, namely the profit they make from producing trains). Nobody can manufacture any more bitcoins than the algorithm allows.

Now if you convince me to get into collectible model trains, say pre-war Lionel models, the supply of which is fixed, that will raise the after-market value of your pre-war Lionel models. Whether or not that increase is significant depends on a lot of things of course.

Re: Freicoin - easy-to-use demurrage currency

#57

Post by Ntrails »

rrrrtttt wrote: post #47
jstalin wrote: post #44

Earlier quoted context omitted.

Value is subjective. Water is very valuable in the desert, but not so valuable in the middle of the Pacific. Diamonds are valuable in downtown Chicago, not so much to someone surviving in a lifeboat. During the hyperinflation of Germany in the 20's, people were trading furs and antiques for food. It's all subjective.

Saying that value is subjective is tautological, it's like saying pretty girls are pretty. What's the base case of the recursion? With stock certificates, you have expectations of future dividends. With stamps, they're nice to look at. What do you have with Bitcoin?

Stamps are only nice to look at for some people. The only reason I would buy a stamp would be to sell on again at an expected profit later on.

The value today comes from the expectation of future value, based on something as subjective as the opinions of a subset of society.

Re: Freicoin - easy-to-use demurrage currency

#58

Post by smnrchrds »

jdotjdot wrote: post #50

Some of the comments in the FAQ don't make any sense. Q: Why does Freicoin use demurrage? I'm worried that my coins will just fade away. A: Worried? It's a good thing. If the amount of money was stable, people would prefer saving it as opposed to spending it. This would decrease the quantity of money circulated, which in turn would act against the main purpose of money - a medium of exchange. With demurrage in place,…

He means Islamic bank, which is basically a bank without riba. If you are interested you should look at wikipedia articles [1] and [2].

Funny thing is in Iran, which considers itself an Islamic country and says it follows Islamic laws in banking, interest rates are as high as 20%.

[1] http://en.wikipedia.org/wiki/Islamic_bank [2] http://en.wikipedia.org/wiki/Riba

Re: Freicoin - easy-to-use demurrage currency

#59

Post by pessimizer »

rrrrtttt wrote: post #47
jstalin wrote: post #44

Earlier quoted context omitted.

Value is subjective. Water is very valuable in the desert, but not so valuable in the middle of the Pacific. Diamonds are valuable in downtown Chicago, not so much to someone surviving in a lifeboat. During the hyperinflation of Germany in the 20's, people were trading furs and antiques for food. It's all subjective.

Saying that value is subjective is tautological, it's like saying pretty girls are pretty. What's the base case of the recursion? With stock certificates, you have expectations of future dividends. With stamps, they're nice to look at. What do you have with Bitcoin?

You can avoid taxes, tracking, and buy drugs with it.

Re: Freicoin - easy-to-use demurrage currency

#60

Post by mikecane »

>>>Every Freicoin client is capable of performing these tasks, but in practice mining is the domain of computer enthusiasts and IT professionals with tuned top-level hardware

Given that my PC is obsolete crap, should I even bother getting the client?

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