Hacker News Reader

Comment by cstross | Hacker News Reader

Out of curiosity, what's your opinion on crypto-currencies that aren't deflationary, or that rely on proof-of-stake rather than proof-of-work?

Now, that sounds like a good idea. But at that point, we're talking about a cryptocurrency equivalent of real grown-up money, which would sort of kill its appeal to a lot of the folks who rant on about the evils of fractional reserve banking and hoard gold because they think it has some sort of mystical inherent value -- the sort of folks who invest in what William Gibson termed "Dunning-Krueger-rands".

View on HN

>Out of curiosity, what's your opinion on crypto-currencies that aren't deflationary?

Now, that sounds like a good idea. But at that point, we're talking about a cryptocurrency equivalent of real grown-up money

I'm extremely amused, because Dogecoin is inflationary. So Dogecoin is "real grown-up money" by your definition.

Not everyone interested in Bitcoin are libertarian gold-hoarders :)

Some of us are interested in it because Bitcoin represents an experiment into a distributed network for ownership, in the same way that the Internet is a distributed network for data.

Ultimately, the economics of Bitcoin don't hugely matter in the long term, because crypto-currencies can be programmatically traded between different blockchains using distributed contracts. The hard part is getting an interface up between "normal" currency and crypto-currencies.

There are already some crypto-currencies out there that experiment with different economies and setups. Dogecoin (yes, that Doge) has a fixed inflation rate, for instance, while Peercoin uses a proof-of-stake/proof-of-work mixup that gets around Bitcoin's large use of computing power.

Dogecoin has a fixed rate of growth of the money supply - inflation is the ratio of growth of the money supply to growth of the economy. So a shrinking money supply can be deflationary, but so can a growing one whose usage is growing faster. DOGE, right now, is probably deflationary.

Thanks for the correction.

And not everyone who claims to be a libertarian gold-hoarder is actually a libertarian, even if they're into bitcoin. That's just a term that disgraced embarrassed republicans who want to snort coke and party with hookers call themselves. If they still listen to Glenn Beck's advice about gold hoarding and vote republican because they hate Obamacare and resent the 47% freeloading on them (or for any reason), then they're still republican. ;)

Charlie, if you know everything better, why don't you just go out and do it?

Nobody is preventing you from coming up with awesome-inflationary-proof-of-stake-charlie-coin. NOBODY. The source to the variety of coins (there's more than a hundred) and the variety of non proof-of-work based ones, is all online, on github mostly.

You're just sitting on your blog bemoaning and insulting the community, and you do jack fucking squat.

If you're not part of the solution, you're part of the problem. Git push or shut up.

You don't want to do that? Well that's grand then, you're just sitting there on the sidelines with no investment either way and spouting your bullshit theories but no willingness to put your money where your big potty mouth is. that's rich Charlie, really grand.

Proof of stake is wildly anti-egalitarian: very literally, the rich get richer.

Explain? Surely stake out == stake in, or something is very wrong with your proof of stake?

Proof of stake means: your chance of mining coins is derived from how big a Scrooge McDuck style money pool you already have. Merely for owning that money, Mr McDuck gets more money.

To a certain extent, the same is true of POW as rich people can afford more hashing power.

In other words, it works like interest. In a properly functioning monetary system, interest and inflation are fairly similar, so even though the number of coins in McDuck's pile is getting bigger, what can be bought with that pile stays relatively constant.

How is that like interest? Interest is rent on money. Cash in the mattress doesn't get interest. In a properly functioning monetary system, interest is above inflation.

Just as interest in the conventional economic system is wildly anti-egalitarian: very literally, the rich get richer.

Agreed but a difference is that to profit by interest, you generally have to invest, take risks, and put the money to work.

As opposed to proof-of-work, where the people investing in mining rigs get richer.

So it's really the people investing in it rather than the bitcoin itself you have problem with? I am confused now.

Reply on news.ycombinator.com