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Freicoin - easy-to-use demurrage currency

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Re: Freicoin - easy-to-use demurrage currency

#81

Post by maaku »

lolcraft wrote: post #15
kiba wrote: post #13

One does not simply invent a currency to solve a percevied problem in our economic system. A currency must also provide compelling economic reasons to actors for adoption. That is, what is in it for me to use freicoin? I don't see any reason to give money, buy, or sell, or do anything with freicoin. To me, the fact that freicoin decays when not used is a bug, not feature.

Completely agree. FreiCoin: when programmers do not understand what Nash Equilibrium means. Nor the Tragedy of the Commons. They made a great attempt, but sometimes one's best try is just not enough.

> FreiCoin: when programmers do not understand what Nash Equilibrium means. Nor the Tragedy of the Commons.

Care to explain?

Re: Freicoin - easy-to-use demurrage currency

#82

Post by maaku »

Ygg2 wrote: post #19
mistercow wrote: post #11

Earlier quoted context omitted.

It's not centralized (according to their site). The value of held money just decays. The money doesn't go anywhere; it just disappears.

> Q: You said that Freicoin is decentralized. But the Foundation makes it centralized! > A: You are right. But we have no other solution. Initial coins should be distributed to the society. From FAQ, they say its centralized.

No. There is a one-time issuance of currency to get the money out there. Of that, 20% goes to the miners over the next 3 years, and 80% is distributed through community-vetted grant and prize proposals.

Of the demurrage however, it is perpetually destroyed and recycled through the miners.

Re: Freicoin - easy-to-use demurrage currency

#83

Post by amalag »

maaku wrote: post #78
amalag wrote: post #61

Earlier quoted context omitted.

I like some of the concepts behind this freicon, it disincentives pump and dump and pyramid schemes. I personally will never put money in bit coins because it is like a pyramid scheme. Again what we really need is probably frictionless digital payments, not another currency.

You should never put money in freicoins either. Rather you should use it for buying and selling things, and just keep enough at hand for cash-flow purposes. What we want is a frictionless medium for digital payments, with good economic properties. Bitcoin doesn't offer that. * Disclaimer: I'm one of the creators of Freicoin.

I appreciated the thoughts behind it, the relation between interest rates and incentives for investment is not something I thought about. It makes a lot more sense to me than bitcoins.

Re: Freicoin - easy-to-use demurrage currency

#84

Post by amalag »

jimktrains2 wrote: post #64
khuey wrote: post #56

Earlier quoted context omitted.

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 Lio…

So, you're saying all collectible markets are also ponzi schemes?

Collectible markets are not liquid and very whimsical. They are a place for rich people to show off their money, because when you have enough money, the money isn't important, it is buying something new and unique.

Re: Freicoin - easy-to-use demurrage currency

#85

Post by maaku »

aethertap wrote: post #68
khuey wrote: post #55

Earlier quoted context omitted.

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.

How does it improve the situation if I'm just buying something else to stuff under my mattress (e.g. silver)? I guess my issue is that it seems like even with a system like this implemented at a national scale, over the long run you'd end up with people rushing to convert the currency into "real" money, that being whatever commodity people land on as being most easily traded/stored/etc. At that point it seems like th…

Because the assets you're holding under your mattress aren't affecting macroeconomic factors derived from the supply and demand of the currency of trade. More simply, you are conflating money as store-of-value and money as medium-of-exchange.

Re: Freicoin - easy-to-use demurrage currency

#86

Post by maaku »

terhechte wrote: post #32

Funny, just this morning I decided to write a blog post about Gesell and the 'Schwundgeld' and his short usage in the city of Wörgl almost a century ago. The real question, of course, is wether inflation isn't a much more natural way of depriving currency of it's value.

What benefit does inflation have over demurrage?

Re: Freicoin - easy-to-use demurrage currency

#87

Post by jdotjdot »

smnrchrds wrote: post #58
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

I knew what he meant about Islamic banking, was more commenting on the grammar.

Interest rates can be high (or exist at all) in Iran because legally it's not actually interest. I understand it to be some sort of equity arrangement legally where the interest is actually dividends. But for macro purposes, it's interest rates.

Re: Freicoin - easy-to-use demurrage currency

#88

Post by jimktrains2 »

khuey wrote: post #76
jimktrains2 wrote: post #64

Earlier quoted context omitted.

So, you're saying all collectible markets are also ponzi schemes?

I didn't say anything was a Ponzi scheme. For starters, a Ponzi scheme involves fraud ...

Ugh, me no no wurds.

Ponzi scheme was not what I wanted to say. Pyramid scheme is what I wanted to say.

Re: Freicoin - easy-to-use demurrage currency

#89

Post by jdotjdot »

rmc wrote: post #72
smnrchrds wrote: post #58

Earlier quoted context omitted.

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

Fun fact: Charging interest used to be against Christian principles aswell. Instead people would borrow from Jews (who did charge interest). The Magna Carta (in England) has sections on what exactly happens if someone ones money to Jews and dies (for example).

That's why usury was traditionally a Jewish profession in the Middle Ages--they were the only ones allowed to do it (and sometimes it was the only thing they were allowed to do).

Re: Freicoin - easy-to-use demurrage currency

#90

Post by awt »

patio11 wrote: post #43
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.

Yes. Well, qualified yes: I don't believe that the new cryptocurrencies are more of a pump-and-dump than Bitcoin is. The pump-and-dump model is intrinsic to why Bitcoin is popular: creating lots of widely distributed coins early, then making them increasingly dear, creates a built-in base of... let me be charitable and call them "cryptocurrency evangelists", who have high incentive to go to their local online waterin…

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