You are assuming the masses hold most of the wealth, that is likely false. Yeah grandma may do the wrong thing. George Soros probably won't. For that matter, her grandkids (or theirs) probably won't either. It's a bit like getting scammed on the internet today. Grandma is a far higher risk than the grandkid.

No, what it means is, people abandon the coin, stop using it, and move to a coin that has a fixed, non-zero subsidy of most likely 1-2%.  In other words, Bitcoin itself will either have to dwarf every other coin in market cap and liquidity, by exponential magnitude forever to avoid this, or even BTC itself will die if they refuse to fork to non-zero block reward.

You are conflating the debasement of the dollar with the artifacts of the power vacuum of democracy.

The repeating cycles of failure of the collective is not due to debasement. Debasement is absolutely required because growth of the population and productivity is exponential (percentage, not fixed nominal amount)-- hard money tards would rather savings eat productivity because it means capital can grow in purchasing power merely by sitting in hole and not being productive. Even the Bible admits this when it says in numerous versus about money "it will grow wings and fly away" and the punishment given to the tard who buried his hoard in a hole (to "keep it safe") in the Parable of the Talents was all his hoard was taken from him and given to the one who put it to productive use earning a compounded interest.

The centralized control over debasement is one of the levers afforded to the power vacuum, but it does not logically follow that decentralized debasement is.

The breakthrough of Bitcoin was the creation of a protocol for the network to reach consensus on how the next block was created. But this is for deciding transactions (and yes it just so happens that block rewards are also given at that time too) but what if there was another protocol created so the network can reach consensus on how much reward is created?

So there are camps of people that like the current setup with Bitcoin having a hard cap, and then there are proposals for a fixed constant block reward (e.g. 1 coin per block) or even block rewards based on a fixed exponential growth (e.g.. 0.5%-1% per year), but what if the block reward is instead reached by network consensus?

So in that case, it may be possible that the network can go 100 year without ever raising ANY reward, so you get absolute hard cap on supply. But if the network decides that there needs to be some new coins released, it does that and the effect may be tiny growth, maybe even on the order of 0.0001% or even as large as 2% depending on how much coins have been lost, or how expensive it is to process transactions. In this case, no hard limit is set on the amount of new coins created, (i.e. some people are very against say 2% growth), the amount is flexible (may even be 0%), and entirely decided by the network (i.e. it is "fair").

Do you think such mechanism is possible?

in general i like the idea.

BUT: i think a possible unlimited inflationary money supply would fear many investors away

does your idea mean that miners only get rewarded by transaction fees or do they get nothing?

i'd like to see an working example with miners working only on fees! that sounds intersting...but more as an experiment.

the next problem is how to reach consensus in the second chain. in btc side-chains or merged mine chains are possible so i'd say it could be implemented...) the tough questions are: how to vote: pos like with your current stake (by submitting it to a pow proofed sidechain) or by burning some of your coins?

edit: imagine a very big exchange gets robbed. it could bribe holders with fiat to vote for a bigger supply to make it possible to recover that loss. i am unsure if i like that. need to think more about it

I have an incentive to contribute in that way, because we all benefit from hashing out the ideas.

I meant those who have implored me publicly and privately to contribute actual programming effort. So now they have my answer.

My hypothesis is that all consensus built via stake (voting) is centralizing.


Satoshi's longest chain rule via Proof-of-work. And we are contemplating improvements to it.


The way open source appears to work best is all discussion is open, but when it comes right down to it, the leader keeps the direction focused. Watch Linus Torvalds explain it (also explains why people get annoyed with my posts).

After Satoshi left, Bitcoin was leaderless and no significant innovation was achieved after that.

First you must choose the long-term debasement rate category:

a) declining nominal rate of debasement, i.e. asymptotically nominally 0 a la Bitcoin
b) slight demurrage, i.e. shrinking money supply if you send it to the ether (forgot how Freicoin handles demurrage)
c) fixed nominal rate of debasement, i.e. asymptotically 0%
d) fixed % rate of debasement, a la Inflatacoin (which failed? Was it 10%? Did it exist?)


If you choose d (which apparently quite a few of us think is correct, but we may not be the majority?), then you have to decide the %.

So what determines the ideal %?

I suggested the long-term rate of debasement should mirror the population + productivity growth.

http://www.globalchange.umich.edu/globalchange2/current/lectures/human_pop/human_pop.html


http://www.nber.org/papers/w15834


So that is a range between 1.3 + 1.7 = 3% to 2.1 + 2.05 = 4.2%, i.e. 3 - 4%.

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Another way of framing this question is to consider my theory that if the mining is won by the home miner (who doesn't care about the electrical cost thus crowds out the investment miner) this increases the number of spenders, which due to Metcalf's law, increases the network effects (growth in use) by the square of the increase in spenders.


Thus the ratio in network effects growth between a 0.5% and 1% rate of debasement is ≈ 1 x 1 0.5 x 0.5 = 400%.

Thus the ratio in network effects growth between a 0.5% and 3% rate of debasement is ≈ 3 x 3 0.5 x 0.5 = 2700%.

Thus the ratio in network effects growth between a 1% and 3% rate of debasement is ≈ 3 x 3 1 x 1 = 900%.

The ratio in network effects growth between a 3% and 5% rate of debasement is ≈ 5 x 5 3 x 3 = 278%.

The ratio in network effects growth between a 3% and 4% rate of debasement is ≈ 4 x 4 3 x 3 = 178%.

The math shows that going to higher percentages diminishes the potential gain in network effects growth for the same difference, e.g. 3 - 1 = 2 and 5 - 3 = 2, but the former is 900% and the latter is 278%.

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One counter argument to the benefits of getting more coin into spenders hands is they spend putting a downward pressure on the price. But this liquidity means the price seen on the exchanges is more realistically the marginal price you will pay. Whereas I had pointed out that when liquidity is low, the market price is meaningless.