Devcoin is not a currency. Devcoins are tokens so that is a problem with them calling it a coin when it's a token.


Devcoins don't have any real value other than to be used as some token to represent the labor. Honestly we could work for Bitcoins instead but Bitcoin isn't focusing on that right now so there is Devcoin. Devcoin is not something to invest into as a commodity and it's not a currency that you should save or spend. It's a transitory or transient token which the moment you get must be traded in for the actual payment in the form of Bitcoin. Devcoin will never make it as a currency and will always be a token system because that is what the creators call it and the fact that you can have an infinite amount of worthless tokens in the same way you can have an infinite amount of time cards. It's the shares and the generation process that matters and from what I can see that process seems to function independently to the amount of coins that exist in total.

I think the solution to this problem would probably be to set the tokens to self destruct after X amount of time. Devcoins can be created infinitely but old coins which aren't traded in for Bitcoin should expire and we should probably treat it like coupons. I did X amount of work, wrote Y amount of words, I get a coupon worth Z amount of shares, and there has to be some volatility to the process but since there is no 21 billion cap and it's infinite the math would indicate that at some point no one will buy Devcoins for any investment or speculation, and it probably does not make sense to do so now, which is why the price is so low. But it does make sense to work for Devcoins and provided that the amount you get is modulated and adjusted, the fact that infinitely many get produced wont matter.

What I mean to say is, if there is 21 billion that exist then the jobs will be paying tens to hundreds of millions of Devcoins. All that changes is the decimal places and the amount per share. Honestly I don't know why they made this decision of infinite inflation, because from a marketing perspective it's keeping many people away from Devcoin who need to be using it. It kept me away from buying it, but I don't mind earning some provided that I can trade them in nearly instantaneously. Basically the only purpose behind them is to let people work and feel like they earned a billion coins or something, but the truth is people work for dollar amounts not coins and the amount of coins will be based on what people are willing to accept. No one is going to accept anything which isn't a fair amount in a free market, at least right now. When the market becomes more global that is when Devcoins will become worthless to many people because the price of the labor once again will be the minimum that anyone in the world will work for.

Devcoin is fine for now but I suspect at some point there will be competitors.

Luckybit,

Can you give me a quick answer to a couple questions for which I cannot find any good answer.  This is relevant to the value and future of tokens such as devcoin which is why I'm asking it here and not in PM.

1) Since you cleared these are tokens which does change a lot with my own personal theories I'm hoping you can add some color to what I've been searching for.

2) What's your take on the incredibly stable bitcoin token, an utterly worthless video game token showing incredible strength and price stability at well above $120.  From an econ point of view it's not possible for this length of time so maybe you can add some new perspective.  I firmly believe the natural forces exacerbated after a few weeks and it is now being propped up, but for what purpose, by artificial means....but who and for what purpose, again?

3)  These tokens are known about by maybe 1% of the population, and I mean, known as in knowledge not some quick thing they heard on channel 12 news.  So it's only a matter of time before awareness explodes and goes logarithmic and depending the number of tokens on the market at the time most if not all coins can stand to gain massive price appreciation, especially one such as devcoin which has a large following.  What's your take on this theory of mine and the possibility of it actually happening in my timeframe of 6-18 months or so?

4) Tokens are different than money but I think from the physics and economics point, such as supply and demand, velocity of money, turn over rate, etc,. these tokens should behave closely to the same model as money since in essence they can be treated as fiat money at some point so then their price can appreciate based on the same theories which govern the current market value of any fiat currency.  What's your take on that and perhaps a timeframe?

Thanks in advance.

regards,

Vlad

Bitcoin isn't a community token, it isn't merge mined, it's a cryptocurrency which is a commodity more like gold. It has intrinsic value based on it's scarcity and the difficulty and expense of obtaining it. Devcoin is just a community token no different than if we created coupons and called them shares and gave them out so people can exchange those coupons for Bitcoins. The coupons would be coupons not Bitcoins. The value would be in the Bitcoins themselves which function as the gold standard to back the coupons. In the case of Devcoins the value is in the Bitcoins that people can trade Devcoins for. Devcoins themselves are merely community tokens and are not scarce because they don't have to be worth anything to be used to prove you did a job any more than a time card has to be worth anything more than to prove you showed up on time. Devcoins are functioning like time cards for Bitcoins. Devcoins can help establish who did what job and its a lot easier to reward in Devcoins but I see no intrinsic technological innovation or value in Devcoins to make it last nor is it scarce enough to have any psychologically instrinsic value to a smart investor. Negotiable instruments or fiat currency had value in that it was lighter and easier to carry than gold but I don't see what niche or role Devcoin has that could not be done by PPcoin or Litecoin If you'd like to go buy millions of Devcoins go and for now it will be an okay investment but the moment Devcoin is globalized and the majority of writers are in third world countries the value will crash or something has to change, I do not see how it's a sustainable model mathematically.

Devcoin is not designed to be scarce. It will never become like gold because it doesn't have the same design. Anyone can get Devcoins for cheap and while there might be occasional volatility it's always going to be cheap because it will never be scarce. Devcoin isn't really a coin. Let me give an example, lets say I took decks of cards with arbitrary random numbers on them and I called them "shares" and passed them out to anyone who did X amount of work and who typed Y amount of words. Let's say the cards are made by a card company that for sake of argument mined the cards into existence using technology from a completely different company that makes very rare limited edition baseball cards but agreed to let them use the facility to make the arbitrary cards and then gave us unlimited amounts to pass out. The point here is that with Devcoin the worker is acting as the miner mining by earning shares. The more workers who write, the less profitable it becomes to write, the less workers will want to write. This is a flaw in the design of Devcoins because while it was designed to produce efficiency it neglects the fact that in a global economy there will be people willing to write nearly for free so once critical mass is reached there will be hundreds of thousands or perhaps millions of third world writers who will write for $5 a share, so what of those expecting $50 or $500 a share? It simple does not scale. The number of Devcoins being generated are just arbitrary numbers, it's only the worth of the shares that matter to the writer just as miners care about how profitable mining is and not so much about securing the blockchain.

Bitcoin is a global commodity currency. You can use it as a store of value or as a currency to purchase large items but not so much for micropayments. Litecoin is better at micropayments, hence it's a bit less scarce and has faster transaction times. PPcoin is better as a store of value than Bitcoin because of Proof of Stake and the differences in managing difficulty. Devcoins are tokens which represent a value in Bitcoin but which have no intrinsic value of their own. Bitcoin has an intrinsic value of it's own because people will buy or even invest in Bitcoin. I don't see many people thinking Devcoin is a good long term investment. Anyone who actually attempts to work out the math quickly finds out that with unlimited supply but limited demand, you're not going to see much of a price rise. Limited supply but unlimited demand like with gold or perhaps Bitcoin is a very different story.

To test this out, if you ask people here if they have enough Bitcoins most will say no.
Try asking people here if they have enough Devcoins and see what they say.

Well, the issue with limited number of coins is that... it's limited. Take the USD, for example. We have inflation because the government keeps adding more money to the pile. Why? Because the population increases. As we have more people, we need more money to help create a sort of middle ground.

I think coins like DVC are really the same. Our population (in relation to the US in the example) would be people coming on board. Think about it like this:

We have 10 coins and 10 people. Each person has one coin. Ten new people jump on board. At any given time only ten coins can be out there, which means hoarding becomes necessary or you have 0.

On the opposite side:

We have 10 coins and 10 people. Each person has one coin. Ten new people jump on board, so we create 10 new coins. As time goes on, each person can end up with their coin. Being that there is no more fear of not having any coins left, they are traded as a currency.

This is a very watered down simplification but it should help illustrate the point. The only downside to DVC is that it continues printing the same number of coins forever. So in the example above, if we got 2 more people we still have 10 new coins. If we got 0 new people, there are still 10 new coins. And if we got 50,000 more people from a village, there are still just 10 new coins.

There should be a way to adjust, in some way or another, the output based on some criteria.

I think the concept of Freicoin's demurrage is intriguing, they basically selfdestruct at a fixed percentage over time. Such a demurrage could be added to devcoin (or rather a follow up) and the generation of new coins balanced with the demurrage to keep the total number of coins steady in the long run.

Combined with devcoin's 90% model, this would allow a foundation to constantly hand out coins for work, because the generation would never cease, while making the coins valuable. To keep a certain amount of coins one would either have to work for them constantly or buy more of them... I'm not sure if this would work out over a long time span, but the current non-stop process is guaranteed to make devcoins worthless in the future.

I agree Mark that a limited coin is flawed eseocially at 21 million.  I don't disagree with printing more money but it should be less or using demurrage.  Something to keep the billions from growing while the price is imploding.

I agree a lot with what luckybit says but I also think the way bitcoin, once a token, now a coins currency simply because its in demand, devcoin can too follow that route but it would take many adopters.  And if what he says its true and we have hundreds and soon thousands of workers in third world countries then yes, it will destroy the plan cause most 1st world countries will not work for a small share that's only worth maybe $10, while over there that's a good wage but I doubt the content will the same quality there which is why I suggested more like a .25 share for third world countries to keep the businessplan from unraveling.

I also like his idea of devcoins not in use for an X amount of to auto destruct.  That's brilliant as it limits the total numbers and it creates massive money volatility which would then put an upward pressure on the price as people will only hold on so long before selling the coins. Maybe a clause saying once sold the shares clock starts again but up to a limited amount of time to prevent abuse from clever guys with 10 different wallets.

I am 100% against the destruction of coins. This creates way too many problems. You should be able to hold some for use whenever you want, without being forced to utilize them. This is part of what creates value.

I think what needs to be done is slow down the creation of new coins. We need some way to determine how many should be made and use that to continue on. Every month or so it should be re-evaluated and altered as necessary. This will help keep the total number of coins in check, without causing problems by taking away what people have already earned. Inflation (or deflation in the form of the currency's value) will handle that all on its own, and is a much more efficient determinant.

Fair enough.

Hi, Actually I would say Vlad and FinShaggyare correct on their statements.

We could have a look on the theory behind token money and money.

at http://wiki.answers.com/Q/What_is_the_difference_between_a_commodity_form_of_money_and_token_money you can find this:
Which fits the common knowledge of what a token is, but a more strict definition is found here http://oll.libertyfund.org/?option=com_staticxt&staticfile=show.php%3Ftitle=318&chapter=9929&layout=html&Itemid=27
Therefore token money is basically ALL money we handle now-a-days, the main difference is, money handled centrally by a government authority is recognized by law, and criptocurrency is recognized by custom, is only a matter of time and social power to make custom into law.