I do like the idea of having the wealth more distributed, so early-adopters can't hold ridiculously large fractions of the total share without putting for the equivalent in USD.

Also, I think the whole voting thing would work in an ideal world, but what's to stop a few supercomputers from banding together and drastically changing the price?

One more thing: Democracoin doesn't sound very catchy, rather just like a politically-charged ripoff of the original.

Again, realize any such limit put in place is only giving you security through hoping everyone else is too lazy to write a new client.  If 51% want unlimited coins, you have two options: you give it to them, or they fuck with your network nonstop wreaking havoc.

and re: democracoin name I pulled it out of my ass, I would not actually call it something like that .  I would call them hashcoins.

The idea of not having a deflationary currency which would not massively benefit early adopters is in my view better than the how Btc is set up. As you say, many people do not find Btc atractive at all due to this circumstance. But if the opposite is true, that if a constellation of very powerful computers wanted inflation and there is no possible way of stopping them from getting their will through - how is this scheme better as opposed to different from Btc. This is a genuine question - I have no programming skills whatsoever.

@blogospheroid:
That's actually a very good question.

Financially, only a reasonable appreciation rate (technically, if you're an early adopter, you CHOOSE the appreciation rate yourself and can make it as big as you want; but if you do that, the next round of adopters will probably say screw you and start their own.).  Everyone is different, but my threshold would be if something was appreciating more than 100% a year *above Moore's law*, I would say "screw that".  Thus why I see 1M-fold increase in bitcoin and am basically saying, "screw that".  Note I don't mean value relative to USD.  I strictly mean the "coins issued per difficulty" value, which I would expect to be moore's law + 10% or so.

Admittedly the distribution of bitcoin is quite clever from an "incentivise early adopters"  perspective.  The problem, from my discussion with others about bitcoin, is it totally scares away the crucial "mid-adopters" you need before mass use.  But perhaps I'm wrong and the price instability and difficulty increases won't scare too many away -- humans behave in all kinds of weird ways.

@dennis,
The point of this is to recognize that
1) As of right now, you could not stop such a group in bitcoin.  if 51% were unhappy with the current rules, they could band together and terrorize people, double spending, DDOS
2) We basically already have a voting system but it's terribly inefficient: if I don't like the rules now, I must write a new client, distribute it, and explain to other people why my rules are better.  The purpose of "hashcoin" would be to recognize this and streamline it, so that if people get unhappy or want changes, they can do so without starting from scratch again.  In hashcoin, if you are unhappy with the rules, you simply propose new ones, explain them to the community, and then they will be voted on.  In other words, the system can adapt rapidly to any change in how people feel/what they want.  The goal is to write a system with the goal in place of "how can I make it so that, if people don't like this system, they can propose changes that if most people agree are good ideas, can be incorporated immediately rather than everyone having to start over".

@Rassah
Unfortunately I agree, particularly after my realization that "inalienable rights" are meaningless where 51% can do whatever they want.  There is some hope though, in that the voters are miners/people with massive CPU power, not every random person using hashcoin.  Hopefully the miners/people who invested heavily will spend time to think clearly before voting.  But there is no solution to tyranny of the majority...


Edit
Actually, here is the closest thing you could do to "inalienable rights".  You could refuse to accept certain rule changes, and importantly, make everyone know that you will refuse to accept such changes.  To do this, instead of voting on the value, you vote on an upper and lower bound for the value (here the value is the BTC rewarded per difficulty, but its conceivable there are other parameters people could want to vote on, like TX fee per KB perhaps).

Thus now you vote on a range X-Y, and when you vote, you are basically saying this: I will not accept a block with parameters outside these ranges.  If you send me one, I will ignore it, and will fork the blockchain and stick with whoever else doesn't like your change..  Now the goal of the miner is, given the votes he's seen, to set the parameter to the value that maximizes acceptance (i.e., pick a value that falls in as many people's acceptable ranges as possible).  This is by definition -- a miner wants his block to be accepted by as many people as possible, to guarantee he gets his reward in the generally accepted blockchain.  Thus infact, no voting is needed at all and the miner can do whatever he wants.  However, if he wants his block to be accepted, he better respect others' wishes.  Now if 51% come online they can't force you to accept rules you don't like, but they can wreak havoc/terrorize the blockchain as they can now.

I wrote the edit after the first part so there may have been inconsistency.  In the edited scheme, the blockchain would basically fork at that point.  Basically the blockchain is a state of all transactions and generations up until some point in time.  Say we're at block number 100, and I see a new block 101 just made that gives a ridiculous amt of BTC to the generator.  If I find that unreasonable, I just pretend I never saw it: I go on continuing to try to build block 101 from block 100.  On the other hand, if someone else gives me block 101 that is agreeable, I shift work to continuing on block 102 ontop of that.

Now things get a bit weird: some transactions (like transfers of old coins) will be valid in both chains, while some will be valid in one and invalid in the other (e.g. spends of those new coins).  Now we can do business together even if we don't agree on everything: as long as all the money involved respects both of our rules, any tx between us will be valid in both chains, and so both of us is happy (actually, I guess all that matters is the person receiving the money wants it to be valid in their chain).  But I will not do any business involving coins I didn't accept (i.e., txs that would be invalid in my chain).

Ofcourse, it would be a headache to keep track of these things and the goal would be for this to never, or rarely happen.  A fork should be like a "revolution", not a common occurence, and people would draw their lines in the sand and stick to their chains.

Voting will make the number of generated coins highly unpredictable. You are setting up a system prone to positive feedback loops that could create even more price instability.

I don't think that most people will vote altruistically or in the name of economic stability. A lot of miners will just vote for a very high number hoping to bring the weighted median up so they can make a few more coins. Once people get used to the fact that the block award keeps rising, they will vote for even bigger increases hoping to make up for the loss of value of their coins.  Hyperinflation could result.

Even your idea of "vetoing" for upper and lower bounds will be "abused" for selfish means: Many miners will set lower bounds (that they keep raising) simply to make sure other voters don't bring the median down again.


Here is a much less corruptible scheme that addresses your concerns:

Number of coins awarded per block = Difficulty

Simple, predictable, easy to understand by everybody, and likely to lead to (more or less) stable prices because difficulty is roughly proportional to the size of the economy.

This is an argument to keep newbies locked in the playpen longer. I wouldn't buy a single coin you produced.  The limited supply is the only reason there is any long-term future for Bitcoin.

Bitcoin works. It has a track record. You are [mod edit: No insults allowed] and I don't have time to set you straight, assuming you even wanted to learn. I am just going to keep buying coins now while they are cheap.

Personally, I like the system just the way it is. it has all of the characteristics of a great medium of exchange:

http://economicsandliberty.wordpress.com/2011/06/04/further-observations-on-bitcoin-digital-currencies-privacy-and-liberty/

We just need to now make it user friendly so grandma can do it

How would I do it? I like how Bitcoin is now.

And you are wrong when you say that people just follow what Satoshi wrote. People like what Satoshi wrote or otherwise Bitcoin would not have the success it has had. If a big part of the people liked another way they would have already started a competing currency. There is nothing stopping you from creating your hashcoin. Satoshi even gave you the open source code so you only need to change a few lines of code and you are ready to go.


I really dont know how can I explained more clearly, but Ill try. I am saying that having a price index (no matter what you decide to include or how to calculate that index) does not guarantee you that the monetary system is not creating distortions in the economy. As an example I signaled the roaring 20's. So saying that as long as some price index that you deem appropiate will remain stable is not a guarantee that a monetary system you propose will ensure economic stability.


The problem with your hyphothesis is that price has been stable way before the hashing power stabilized. In fact, hashing power is starting to rise again since yesterday.

Even if you took the time to analize it econometrically (which I believe you havent) I dont think you will find a clear pattern relating hasing power and price, because basically hashing power does not change almost the supply of coins (big increases accelerate very slightly the supply until difficulty adjusts again) and does not affect the demand. This is why we see in reality that increases in price always leads to increases in difficulty (because hashing power has increased).

Both theoretical analisys and empirical data are against your hypothesis. Its important to keep in mind that supply and demand of bitcoins, and thus price, are not affected by hashing power (supply slightly). Instead the incentive to mine it is indeed affected by the purchasing power of bitcoins.


Well, Bitcoin is not a system to get rich, its a currency. Its meant to be used to trade. People should understand that mining is a market with a very low barrier of entry, almost anyone can do it, and will be, more and more as time pases, a very low yielding activity due to competition. If you want to prosper in the Bitcoin economy you will have a lot more success trying to create a business than going the miner route. This is also a good incentive.