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Minting is a ponzi
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Author Topic: Minting is a ponzi  (Read 4843 times)

blackyblack1

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Minting is a ponzi
« on: January 15, 2015, 06:44:41 am »

I created this topic since the MS minting system is designed as a ponzi scheme and will harm the NXT community in the future.
The only settings for the minting coins is the initial difficulty and max difficulty. This way the first to come takes more coins for MH and later adopters will effectively pay to issuer and early adopters. There is no way to set a constant rate for a coin since all cheap coins will be immediately taken by the big miners, dumped to the issuer and abandoned. The difficulty cannot be lowered down so the minting with constant price coins destroys the coin.
We see that the price for minted coins cannot be set to constant. Can it grow? Yes if it is a ponzi scheme. Price is being raised artifically without real value coming to the system.
The only legit option for the MS minted coin is the dropping price.

TLDR: MS minting system is designed in a way to create devaluing coins and ponzi coins. MS minting is flawed and can harm NXT. MS minting should be redesigned or banned.

Proofs:

Coins without inherent value try to create artifical price:

https://nxtforum.org/elems/project-rescue/
https://nxtforum.org/monetary-system-153/(ann)-egold-1st-mintable-keccak25-coin-zero-premint/

Coin pegged to the real value is struggling to promote but it is impossible with MS minting:

https://nxtforum.org/monetary-system-153/(ann)-nxt-metals-au-a-(nmaua)!-first-mintable-mscoin-backed-by-gold!/
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egold

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Re: Minting is a ponzi
« Reply #1 on: January 15, 2015, 07:06:44 am »

When they talk about money, usually the term "intrinsic value" is utilized to refer to what you imply. Give one example of crypto currency with intrinsic value please.
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blackyblack1

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Re: Minting is a ponzi
« Reply #2 on: January 15, 2015, 07:08:58 am »

BTC, NXT
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blackyblack1

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Re: Minting is a ponzi
« Reply #3 on: January 15, 2015, 07:12:01 am »

When they talk about money, usually the term "intrinsic value" is utilized to refer to what you imply. Give one example of crypto currency with intrinsic value please.
Sorry dude, but EGold does not have a value until you are ready to rebuy all minted coins at a fixed price. If you are ready to do it you must have an infinite budget. If not you are running a ponzi.
Another way is to have shops and stores to accept EGold eg have some usage value. But with MS minting this value can only be devalued.
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egold

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Re: Minting is a ponzi
« Reply #4 on: January 15, 2015, 07:13:55 am »

BTC, NXT

 ;D
You should read more on intrinsic value.
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egold

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Re: Minting is a ponzi
« Reply #5 on: January 15, 2015, 07:15:18 am »

When they talk about money, usually the term "intrinsic value" is utilized to refer to what you imply. Give one example of crypto currency with intrinsic value please.
Sorry dude, but EGold does not have a value until you are ready to rebuy all minted coins at a fixed price. If you are ready to do it you must have an infinite budget. If not you are running a ponzi.
Another way is to have shops and stores to accept EGold eg have some usage value. But with MS minting this value can only be devalued.

You have just described NXT and BTC in its early stages. You really don't see the similarities?
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blackyblack1

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Re: Minting is a ponzi
« Reply #6 on: January 15, 2015, 07:18:23 am »

When they talk about money, usually the term "intrinsic value" is utilized to refer to what you imply. Give one example of crypto currency with intrinsic value please.
Sorry dude, but EGold does not have a value until you are ready to rebuy all minted coins at a fixed price. If you are ready to do it you must have an infinite budget. If not you are running a ponzi.
Another way is to have shops and stores to accept EGold eg have some usage value. But with MS minting this value can only be devalued.

You have just described NXT and BTC in its early stages. You really don't see the similarities?
MS coins are different. They do not add the option to send money or reach the decentralized consensus. So they only can serve as tokens of some external value. Eg a BTC pegged coin. But if they are tokens they cannot be minted since MS minting can only devalue them.
MS coins NOT equal to other crypto.
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egold

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Re: Minting is a ponzi
« Reply #7 on: January 15, 2015, 07:24:45 am »

When they talk about money, usually the term "intrinsic value" is utilized to refer to what you imply. Give one example of crypto currency with intrinsic value please.
Sorry dude, but EGold does not have a value until you are ready to rebuy all minted coins at a fixed price. If you are ready to do it you must have an infinite budget. If not you are running a ponzi.
Another way is to have shops and stores to accept EGold eg have some usage value. But with MS minting this value can only be devalued.

You have just described NXT and BTC in its early stages. You really don't see the similarities?
MS coins are different. They do not add the option to send money or reach the decentralized consensus. So they only can serve as tokens of some external value. Eg a BTC pegged coin. But if they are tokens they cannot be minted since MS minting can only devalue them.
MS coins NOT equal to other crypto.

No crypto currency has intrinsic value. If you claim some of them do, you misinterpret the term. Decentralized consensus makes the currency have intrinsic value, really? Are you trying to re-define the term "intrinsic value" in electronic age for the internet generation? You should start with the definition, not with pointing fingers at what has intrinsic value and what doesn't based on your vague assumptions of what it is.
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blackyblack1

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Re: Minting is a ponzi
« Reply #8 on: January 15, 2015, 07:32:42 am »

No crypto currency has intrinsic value. If you claim some of them do, you misinterpret the term. Decentralized consensus makes the currency have intrinsic value, really? Are you trying to re-define the term "intrinsic value" in electronic age for the internet generation? You should start with the definition, not with pointing fingers at what has intrinsic value and what doesn't based on your vague assumptions of what it is.
So what are you implying that all cryptos are ponzi and you are running one of them?
Decentralized consensus could not be reached until Satoshi and provably fair distribution could not be reached until POW mining. This is the real value of bitcoin.
What is the unique feature of EGold? Where does it's value come from? Do you have shops and stores to accept it? Do you rebuy all minted coins at a fixed price?
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egold

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Re: Minting is a ponzi
« Reply #9 on: January 15, 2015, 07:41:45 am »

No crypto currency has intrinsic value. If you claim some of them do, you misinterpret the term. Decentralized consensus makes the currency have intrinsic value, really? Are you trying to re-define the term "intrinsic value" in electronic age for the internet generation? You should start with the definition, not with pointing fingers at what has intrinsic value and what doesn't based on your vague assumptions of what it is.
So what are you implying that all cryptos are ponzi and you are running one of them?
Decentralized consensus could not be reached until Satoshi and provably fair distribution could not be reached until POW mining. This is the real value of bitcoin.
What is the unique feature of EGold? Where does it's value come from? Do you have shops and stores to accept it? Do you rebuy all minted coins at a fixed price?

I don't imply that all currencies are ponzi. Certainly many currencies don't have intrinsic value, including all fiat currencies. The cost of production of a bank note is less than a cent. Creating money in digital form by banks is even cheaper, at virtually no cost. Does this make them a ponzi? It's a too complicated issue to discuss with someone who tries to replace the traditional accepted term of intrinsic value with what he himself concocted in his mind. I am not running anything, I set up EGOLD as proof-of-concept mintable currency on NXT MS, will submit EGOLD to Coinmarketcap when the logo is voted on and will be done with it. If the currency should survive, it will survive on its own merits. I don't believe in promotion, promotion is usually characteristic of ponzi schemes, as you are aware. If people see the value in something, they will see it without pushing it to them. If they don't, the world doesn't stop at that, there are other things to discover.
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egold

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Re: Minting is a ponzi
« Reply #10 on: January 15, 2015, 07:45:25 am »

I don't recommend to buy EGOLD. In the EGOLD own thread I explicitly stated that it's an experimental currency. Most experiments fail.
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Fatih87SK

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Re: Minting is a ponzi
« Reply #11 on: January 15, 2015, 08:10:11 am »

Replace "Satoshi" with "NXT Devs"

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Come-from-Beyond

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Re: Minting is a ponzi
« Reply #12 on: January 15, 2015, 08:36:30 am »

Here are my comments:

I created this topic since the MS minting system is designed as a ponzi scheme and will harm the NXT community in the future.

No, it wasn't designed as a ponzi scheme. It was designed to generate a lot of fun. No sacral knowledge nor bad intentions were behind minting.


The only settings for the minting coins is the initial difficulty and max difficulty. This way the first to come takes more coins for MH and later adopters will effectively pay to issuer and early adopters. There is no way to set a constant rate for a coin since all cheap coins will be immediately taken by the big miners, dumped to the issuer and abandoned. The difficulty cannot be lowered down so the minting with constant price coins destroys the coin.

In Bitcoin generation rate is tied to the real world time. In Nxt generation rate is tied to actual work spent on already minted coins. You are wrong when you say that there is no way to set a constant rate, it is constant but in other dimensions (not chronometrical). Btw, you can set min and max difficulties the same.


We see that the price for minted coins cannot be set to constant.

"Constant" relative to USD? Sorry, but this doesn't make sense to 50% of people who live in Asia.
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lucky88888

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Re: Minting is a ponzi
« Reply #13 on: January 15, 2015, 08:46:21 am »

i thought with ms we can create a coin and have it ready to mint in block x, that way people can do pre ann and let everyone be ready to mint as soon as it has satisfy certain block number requirement. eg current block 200,000. mint enable on 210,000block.
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lopalcar

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Re: Minting is a ponzi
« Reply #14 on: January 15, 2015, 08:49:05 am »


Proofs:

Coins without inherent value try to create artifical price:

https://nxtforum.org/elems/project-rescue/
https://nxtforum.org/monetary-system-153/(ann)-egold-1st-mintable-keccak25-coin-zero-premint/

Coin pegged to the real value is struggling to promote but it is impossible with MS minting:

https://nxtforum.org/monetary-system-153/(ann)-nxt-metals-au-a-(nmaua)!-first-mintable-mscoin-backed-by-gold!/

I agree with blackyblack1 in his ideas, current mining system is flawed, anything prevents that a miner with huge hashrate get most of the coins in first day since there isn't a limit in coins mined per day, instead of adjust difficulty each X blocks, it's adjusted each % of supply mined, and this is even worst. Although I also think that PoW distribution isn't fair itself... and almost everything in this world it's a ponzi. First come, first serve, early bird catch the worms...
About the comparation in the quoted coins, I don't think that a pegged crypto is imposible, is impossible to be mintable "If it's backed by somthing, I doubt that the backer agree to give away his gold for free to a group of miners, that would be ridiculous... That is why NMAUA has a high difficulty and most of them are premined, he doesn't say also how many gold is backing the remaining coins, so no one will mine them. Instead, in ELEMS and EGOLD, the geeks which are browsing in the forum find an easy way to get some imaginary coins backed by anything but fun for experiment with and easy to obtain.
In my opinion, the best use to MS is a pegged coin, issued by one company or exchange which allows yo to send fiat currency like a crypto, or create local currencies redeenable for fiat currencies in centraliced points in order to avoid electronic cards for make photocopies in the university or pay the bus in any city...
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blackyblack1

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Re: Minting is a ponzi
« Reply #15 on: January 15, 2015, 09:00:03 am »

Here are my comments:

I created this topic since the MS minting system is designed as a ponzi scheme and will harm the NXT community in the future.

No, it wasn't designed as a ponzi scheme. It was designed to generate a lot of fun. No sacral knowledge nor bad intentions were behind minting.
Yes it's fun and it is not working for the real world cases. Let's do it better.

One idea is to make an option to mint a limited amount of coins per NXT block (chronometrical limit).
Another idea is to make diff adaptive: grows and drops depending on the speed of all minters.
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Fatih87SK

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Re: Minting is a ponzi
« Reply #16 on: January 15, 2015, 09:02:56 am »

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blackyblack1

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Re: Minting is a ponzi
« Reply #17 on: January 15, 2015, 09:03:11 am »

About the comparation in the quoted coins, I don't think that a pegged crypto is imposible, is impossible to be mintable "If it's backed by somthing, I doubt that the backer agree to give away his gold for free to a group of miners, that would be ridiculous...
It is called a giveaway. Pegged and minted crypto is possible but not with NXT MS.

In my opinion, the best use to MS is a pegged coin, issued by one company or exchange which allows yo to send fiat currency like a crypto, or create local currencies redeenable for fiat currencies in centraliced points in order to avoid electronic cards for make photocopies in the university or pay the bus in any city...
It is a real use case indeed. But no room for minting here. Let's redesign minting until people get harmed.
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Jean-Luc

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Re: Minting is a ponzi
« Reply #18 on: January 15, 2015, 02:13:46 pm »

i thought with ms we can create a coin and have it ready to mint in block x, that way people can do pre ann and let everyone be ready to mint as soon as it has satisfy certain block number requirement. eg current block 200,000. mint enable on 210,000block.
This is how it works if you make the currency both reservable and mintable, the minting phase begins only after the issuance height is reached. Reserve supply and minimum reserve per unit cannot be 0, but you can make them very small so the reserve part doesn't matter.
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coretechs

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Re: Minting is a ponzi
« Reply #19 on: January 15, 2015, 02:39:30 pm »

Let's redesign minting until people get harmed.

I think this is a bit dramatic.   A rising linear distribution exponent is simple and nobody knows how things will turn out, so let's try it.  I'm sure additional distribution parameters can be added in the future if needed, and you could conceivably use some sort of automation / smart contract to achieve similar results (i.e. issue a new batch of currency units every N coins with difficulty adjusted).
« Last Edit: January 24, 2015, 10:47:00 pm by coretechs »
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