How do you think something like that could be managed?

Bitcoin is only deflationary because the number of people who use it is growing faster than the number of coins in circulation. But how can you measure the number of people who are using it, and how can you measure how much they are using it? (IE are they speculating, are they actually using it to hide money from their government, are they buying needs like food+water?).

Any cryptocurrency hoping to 'appreciate by at most 5%' has to have some reliable metric for measuring it's value in the real world. Otherwise coin generation algorithms are just a shot in the dark, hoping to mimic the expected growth of the coin or having some authority that can provide input about it's real dollar value. And anything that tries to get insider metrics will need some defence against liars and sybil attacks.


On Mon, Nov 25, 2013 at 5:07 PM, Jim Bell <jamesdbell8@yahoo.com> wrote:


From: Kelly John Rose <iam@kjro.se>
To: cypherpunks@cpunks.org
Sent: Monday, November 25, 2013 8:00 AM
Subject: Re: Interesting take on Sanjuro's Assassination Market

On 11/25/2013 4:26 AM, Lodewijk andré de la porte wrote:

>> Why suddenly all this attention for yet another assassination market?
>> Because it's more "hit them and earn the bounty", like at a fair, style?
 
>I wonder what would happen if multiple people claimed the same date for
>the death of a celebrity.

I haven't read enough of the 'AM' system to know what that system would do, but it seems to me that a logical outcome would be to split the reward based on the size of the contribution included with each prediction.  For instance, if Person A correctly predicted with 1 BTC, and Person B correctly predicted with 9 BTC, Person 1 should get 10% of the reward, while Person B should get 90%.

Incidentally, one problem I see with Sanjuro's 'AM' (Assassination Market) system (at least, so far) is the setting of a minimum bet at 1.0 BTC, which is about $800 when I checked a few seconds ago.  In writing my AP essay, I anticipated that very small bets (say, 10 cents US) would be allowed.  Except in unusual situations, few people would want to donate $800 (USD) to see somebody dead; Far more would be willing to donate $1 (USD) for that.
 
I don't know if the current minimum bid in 'AM' has something to do with the granularity of 1.0 BTC, but the existence of digits to the right of the decimal point in the prediction totalizations suggests that this is not the case.   If the problem is that the prediction totalization is currently being done manually, rather than automatically, that is a limitation that I think must be fixed in order for 'AM' to operate well.  And with a minimum bet of 1.0 BTC, it might be portrayed as if 'AM' is a tool of the wealthy, rather than that of the average person.

To the extent that this is a problem now, it will be worse as Bitcoin continues to deflate (increase in value) as it was no doubt intended to do.  What happens when 1 BTC = $10,000?   I consider that one of the few disadvantages or problems with Bitcoin is its hyper-deflationary nature:  How can a currency function as a currency, if it is 'scheduled' (by algorithm) to appreciate in value far faster than any commodity?  Another related problem is that Bitcoin is effectively programmed to excessively reward early-adopters.  While I feel that the inventor of Bitcoin should be richly rewarded for doing the work necessary to give us such a beneficial addition to society, the limit of my generosity is about $1 billion (USD).  Ultimately, I think that a replacement for Bitcoin ("Bitcoin 2.0"?) is necessary, one that won't appreciate in value more than, say, 5% per year.
         Jim Bell


Disclaimer:  I am not associated with Sanjuro's 'Assassination Market' in any way.