1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224
225
226
227
228
229
230
231
232
233
234
|
Received: from sog-mx-1.v43.ch3.sourceforge.com ([172.29.43.191]
helo=mx.sourceforge.net)
by sfs-ml-2.v29.ch3.sourceforge.com with esmtp (Exim 4.76)
(envelope-from <ryacko@gmail.com>) id 1Vq8t8-0008J5-Lo
for bitcoin-development@lists.sourceforge.net;
Mon, 09 Dec 2013 22:01:14 +0000
Received-SPF: pass (sog-mx-1.v43.ch3.sourceforge.com: domain of gmail.com
designates 209.85.212.178 as permitted sender)
client-ip=209.85.212.178; envelope-from=ryacko@gmail.com;
helo=mail-wi0-f178.google.com;
Received: from mail-wi0-f178.google.com ([209.85.212.178])
by sog-mx-1.v43.ch3.sourceforge.com with esmtps (TLSv1:RC4-SHA:128)
(Exim 4.76) id 1Vq8t7-00023c-FI
for bitcoin-development@lists.sourceforge.net;
Mon, 09 Dec 2013 22:01:14 +0000
Received: by mail-wi0-f178.google.com with SMTP id bz8so4357776wib.5
for <bitcoin-development@lists.sourceforge.net>;
Mon, 09 Dec 2013 14:01:07 -0800 (PST)
MIME-Version: 1.0
X-Received: by 10.194.241.228 with SMTP id wl4mr18122081wjc.2.1386626467248;
Mon, 09 Dec 2013 14:01:07 -0800 (PST)
Sender: ryacko@gmail.com
Received: by 10.194.156.194 with HTTP; Mon, 9 Dec 2013 14:01:07 -0800 (PST)
Date: Mon, 9 Dec 2013 14:01:07 -0800
X-Google-Sender-Auth: JcWd7B-LfWFz_7cNZU_mpLSZHF8
Message-ID: <CAO7N=i1p=7fGgzJXvctRoGTsztP6f9rqs78s9=Vnc3TC0RVLdA@mail.gmail.com>
From: Ryan Carboni <ryan.jc.pc@gmail.com>
To: bitcoin-development@lists.sourceforge.net
Content-Type: multipart/alternative; boundary=089e01493c3204419a04ed212298
X-Spam-Score: -0.6 (/)
X-Spam-Report: Spam Filtering performed by mx.sourceforge.net.
See http://spamassassin.org/tag/ for more details.
-1.5 SPF_CHECK_PASS SPF reports sender host as permitted sender for
sender-domain
0.0 FREEMAIL_FROM Sender email is commonly abused enduser mail provider
(ryacko[at]gmail.com)
-0.0 SPF_PASS SPF: sender matches SPF record
1.0 HTML_MESSAGE BODY: HTML included in message
-0.1 DKIM_VALID_AU Message has a valid DKIM or DK signature from
author's domain
0.1 DKIM_SIGNED Message has a DKIM or DK signature,
not necessarily valid
-0.1 DKIM_VALID Message has at least one valid DKIM or DK signature
X-Headers-End: 1Vq8t7-00023c-FI
Subject: [Bitcoin-development] Monetary Authority for Bitcoin
X-BeenThere: bitcoin-development@lists.sourceforge.net
X-Mailman-Version: 2.1.9
Precedence: list
List-Id: <bitcoin-development.lists.sourceforge.net>
List-Unsubscribe: <https://lists.sourceforge.net/lists/listinfo/bitcoin-development>,
<mailto:bitcoin-development-request@lists.sourceforge.net?subject=unsubscribe>
List-Archive: <http://sourceforge.net/mailarchive/forum.php?forum_name=bitcoin-development>
List-Post: <mailto:bitcoin-development@lists.sourceforge.net>
List-Help: <mailto:bitcoin-development-request@lists.sourceforge.net?subject=help>
List-Subscribe: <https://lists.sourceforge.net/lists/listinfo/bitcoin-development>,
<mailto:bitcoin-development-request@lists.sourceforge.net?subject=subscribe>
X-List-Received-Date: Mon, 09 Dec 2013 22:01:14 -0000
--089e01493c3204419a04ed212298
Content-Type: text/plain; charset=windows-1252
Content-Transfer-Encoding: quoted-printable
This is no doubt probably a very controversial Bitcoin Improvement Proposal
and is also a very rough draft of one.
Bitcoin lacks a Central Bank. This is good and bad. A central bank benefits
those with political connections. But Bitcoin lacks price stability, this
generates menu costs, and incentivizes speculation. I propose the creation
of a monetary authority for Bitcoin that sets block reward to a new
mathematical formula.
The velocity of the Bitcoins that are in circulation likely approaches
100,000x per year as compared to 1x - 4x for the USD. This in itself is not
bad. But given that only 10% to 20% of Bitcoins are circulating, this means
that the price of Bitcoin is decided largely through speculation. In fact
the price of a Bitcoin is irrelevant to those who use Bitcoins as a
currency because it appears the majority of coins being used are
immediately being sold and repurchased in the exchanges for the sole
purpose of buying goods.
Unless Bitcoins can be used to purchase intermediate goods and have a
closed economic ecosystem, Bitcoin will be too vulnerable to speculation
and would not be a viable currency. But the development of a closed
economic ecosystem is stymied by the uncertainty of Bitcoin prices and
speculation.
Fortunately the infrastructure for transacting Bitcoin has long been
established, with many major exchanges. Nearly all major exchanges announce
recent prices. At the point when a block is generated, the miner will also
add the exchange price of bitcoin between various other currencies and
crypto-currencies to the blockchain. The exchanges that are kept track of
could be hard coded into Bitcoin or the miner could choose, how this works
is not something I'm personally focused on.
With every new block, the miner will compare the cumulative percentage
change in the exchange price of Bitcoin over the previous 432 blocks. The
standard deviation of the percentage change in exchange rates will be
calculated. Outliers will be excluded, this is so that in case x-currency
suffers from hyperinflation, the x-currency will be ignored. It is
extremely unlikely for all the world=92s currencies to be suffering from
hyperinflation caused by monetary expansion as opposed to a supply shock.
Every 432 blocks the block reward will be reevaluated. For every 5%
increase in the geometric mean of Bitcoin exchange rates in relation to the
world=92s currencies would increase the block reward by 3%. A 5% decrease i=
n
the geometric mean of Bitcoin exchange rates will decrease the block reward
by 3%. Changes in the exchange rates of less than 5% will not alter the
block reward.
The minimum block reward will be one Bitcoin.
Why is this better then the current system? Very simple, we are still
dependent on banks. Currently Bitcoin is poised to replace Visa and Paypal,
not the Federal Reserve. Bitcoin will be less efficient then Visa and
Paypal because it takes times to transfer money out of exchanges to one's
bank account and vice versa. In order for Bitcoin to replace the US dollar,
it needs to not be a more complex version of a debit card. It needs to have
a closed economic ecosystem, where all transactions are done in Bitcoin
(Consumer > Merchant > Wholesaler > Factory), and the only people who use
the exchanges are merchants who need to and those who wish to gamble on
Bitcoin.
In order for Bitcoin to have widespread acceptance, it needs price
stability. My proposal won't peg the Bitcoin to any one currency, but it
would reduce month to month variability in relation to a basket of
currencies and discourage views that it's speculative.
Look at the current system, it's not healthy and it's not a currency.
--089e01493c3204419a04ed212298
Content-Type: text/html; charset=windows-1252
Content-Transfer-Encoding: quoted-printable
<div dir=3D"ltr">This is no doubt probably a very controversial Bitcoin Imp=
rovement Proposal and is also a very rough draft of one.<div><br></div><div=
><span id=3D"docs-internal-guid-436d03f4-d94f-9508-38c8-85c974ca75b0"><p di=
r=3D"ltr" style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt">
<span style=3D"font-size:15px;font-family:Arial;color:rgb(0,0,0);background=
-color:transparent;vertical-align:baseline;white-space:pre-wrap">Bitcoin la=
cks a Central Bank. This is good and bad. A central bank benefits those wit=
h political connections. But Bitcoin lacks price stability, this generates =
menu costs, and incentivizes speculation. I propose the creation of a monet=
ary authority for Bitcoin that sets block reward to a new mathematical form=
ula.</span></p>
<br><span style=3D"font-size:15px;font-family:Arial;color:rgb(0,0,0);backgr=
ound-color:transparent;vertical-align:baseline;white-space:pre-wrap"></span=
><p dir=3D"ltr" style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"=
><span style=3D"font-size:15px;font-family:Arial;color:rgb(0,0,0);backgroun=
d-color:transparent;vertical-align:baseline;white-space:pre-wrap">The veloc=
ity of the Bitcoins that are in circulation likely approaches 100,000x per =
year as compared to 1x - 4x for the USD. This in itself is not bad. But giv=
en that only 10% to 20% of Bitcoins are circulating, this means that the pr=
ice of Bitcoin is decided largely through speculation. In fact the price of=
a Bitcoin is irrelevant to those who use Bitcoins as a currency because it=
appears the majority of coins being used are immediately being sold and re=
purchased in the exchanges for the sole purpose of buying goods.</span></p>
<br><span style=3D"font-size:15px;font-family:Arial;color:rgb(0,0,0);backgr=
ound-color:transparent;vertical-align:baseline;white-space:pre-wrap"></span=
><p dir=3D"ltr" style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"=
><span style=3D"font-size:15px;font-family:Arial;color:rgb(0,0,0);backgroun=
d-color:transparent;vertical-align:baseline;white-space:pre-wrap">Unless Bi=
tcoins can be used to purchase intermediate goods and have a closed economi=
c ecosystem, Bitcoin will be too vulnerable to speculation and would not be=
a viable currency. But the development of a closed economic ecosystem is s=
tymied by the uncertainty of Bitcoin prices and speculation.</span></p>
<br><span style=3D"font-size:15px;font-family:Arial;color:rgb(0,0,0);backgr=
ound-color:transparent;vertical-align:baseline;white-space:pre-wrap"></span=
><p dir=3D"ltr" style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"=
><span style=3D"font-size:15px;font-family:Arial;color:rgb(0,0,0);backgroun=
d-color:transparent;vertical-align:baseline;white-space:pre-wrap">Fortunate=
ly the infrastructure for transacting Bitcoin has long been established, wi=
th many major exchanges. Nearly all major exchanges announce recent prices.=
At the point when a block is generated, the miner will also add the exchan=
ge price of bitcoin between various other currencies and crypto-currencies =
to the blockchain. The exchanges that are kept track of could be hard coded=
into Bitcoin or the miner could choose, how this works is not something I&=
#39;m personally focused on.</span></p>
<br><span style=3D"font-size:15px;font-family:Arial;color:rgb(0,0,0);backgr=
ound-color:transparent;vertical-align:baseline;white-space:pre-wrap"></span=
><p dir=3D"ltr" style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"=
><span style=3D"font-size:15px;font-family:Arial;color:rgb(0,0,0);backgroun=
d-color:transparent;vertical-align:baseline;white-space:pre-wrap">With ever=
y new block, the miner will compare the cumulative percentage change in the=
exchange price of Bitcoin over the previous 432 blocks. The standard devia=
tion of the percentage change in exchange rates will be calculated. Outlier=
s will be excluded, this is so that in case=A0x-currency suffers from hyper=
inflation, the x-currency will be ignored. It is extremely unlikely for all=
the world=92s currencies to be suffering from hyperinflation caused by mon=
etary expansion as opposed to a supply shock. </span></p>
<br><span style=3D"font-size:15px;font-family:Arial;color:rgb(0,0,0);backgr=
ound-color:transparent;vertical-align:baseline;white-space:pre-wrap"></span=
><p dir=3D"ltr" style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"=
><span style=3D"font-size:15px;font-family:Arial;color:rgb(0,0,0);backgroun=
d-color:transparent;vertical-align:baseline;white-space:pre-wrap">Every 432=
blocks the block reward will be reevaluated. For every 5% increase in the =
geometric mean of Bitcoin exchange rates in relation to the world=92s curre=
ncies would increase the block reward by 3%. A 5% decrease in the geometric=
mean of Bitcoin exchange rates will decrease the block reward by 3%. Chang=
es in the exchange rates of less than 5% will not alter the block reward.</=
span></p>
<br><span style=3D"font-size:15px;font-family:Arial;color:rgb(0,0,0);backgr=
ound-color:transparent;vertical-align:baseline;white-space:pre-wrap"></span=
><p dir=3D"ltr" style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"=
><span style=3D"font-size:15px;font-family:Arial;color:rgb(0,0,0);backgroun=
d-color:transparent;vertical-align:baseline;white-space:pre-wrap">The minim=
um block reward will be one Bitcoin.</span></p>
<br><span style=3D"font-size:15px;font-family:Arial;color:rgb(0,0,0);backgr=
ound-color:transparent;vertical-align:baseline;white-space:pre-wrap"></span=
><br><span style=3D"font-size:15px;font-family:Arial;color:rgb(0,0,0);backg=
round-color:transparent;vertical-align:baseline;white-space:pre-wrap"></spa=
n></span><div>
<br></div></div><div>Why is this better then the current system? Very simpl=
e, we are still dependent on banks. Currently Bitcoin is poised to replace =
Visa and Paypal, not the Federal Reserve. Bitcoin will be less efficient th=
en Visa and Paypal because it takes times to transfer money out of exchange=
s to one's bank account and vice versa. In order for Bitcoin to replace=
the US dollar, it needs to not be a more complex version of a debit card. =
It needs to have a closed economic ecosystem, where all transactions are do=
ne in Bitcoin (Consumer > Merchant > Wholesaler > Factory), and th=
e only people who use the exchanges are merchants who need to and those who=
wish to gamble on Bitcoin.=A0</div>
<div><br></div><div>In order for Bitcoin to have widespread acceptance, it =
needs price stability. My proposal won't peg the Bitcoin to any one cur=
rency, but it would reduce month to month variability in relation to a bask=
et of currencies and discourage views that it's speculative.</div>
<div><br></div><div>Look at the current system, it's not healthy and it=
's not a currency.=A0</div></div>
--089e01493c3204419a04ed212298--
|
