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Is there a cryptocurrency out there that doesn't hand outsize rewards to early adopters? I feel like I could get much more excited about something like that.

tromp 9y ago
Grin is trying to discourage speculative investing by having a linear emission curve, a decision that is frequently questioned, see e.g. this discussion https://www.reddit.com/r/Mimblewimble/comments/7dlcol/grin_unlimited_supply/ https://www.reddit.com/r/Mimblewimble/comments/7dlcol/grin_u...
- bitxbit 9y ago
  What’s a good “paid-in capital” estimate of bitcoin?
  - tromp 9y ago
    Do you mean the sum over all blocks of block reward times bitcoin price at time of mining?
  - irickt 9y ago
    I've been wondering this too and haven't been able to find any estimates. By "paid-in capital" I think you are trying to get at how "leveraged" the holders of bitcoin are, or how much non-cryptocurrency was used to buy the bitcoin relative to current "market cap". This is complicated by the mining costs incurred and by the fact that trade for other cryptocurrencies obscures the source of funds. But understanding the distribution of how rich bitcoin holders feel would help a lot to understand the market.
    - bitxbit 9y ago
      Yep. It would be an interesting exercise. IMO bitcoin valuation is more or less btc-based assets minus discounted cost of btc network. Me thinks it’s negative right now.
vminkov 9y ago
Maybe USDT (Tether) if you feel foolish enough to ignore the fraud alerts...
- philipwhiuk 9y ago
  So basically dollars. I'm not sure but I think that already has a wealth inequality problem.
mtgx 9y ago
You'd probably have to find a cryptocurrency that has an extremely high inflation rate. There's no other way around it. So let's say initially 1 million "coins" are created and people put $1 million in total in them, so each are worth $1. To keep that $1 price, you'd have to increase the amount of coins each time more people want to buy more such coins. So if new people put another $1 million into the cryptocurrency, you'd have to automatically generate another 1 million coins. So you'd maintain, roughly, that $1 per coin value. Otherwise, with any relatively finite amount of coins in a cryptocurrency, you're going to see an exponential rise in their values, as more people get interested in that cryptocurrency. It doesn't matter if you create 1 million or 1 trillion coins initially. If the inflation rate is "only" say 10% per year, but millions of dollars, and then tens of millions of dollars, and then billions of dollars are put into that cryptocurrency within a relatively short amount of time, its value is going to explode.
- dominotw 9y ago
  >So if new people put another $1 million into the cryptocurrency, you'd have to automatically generate another 1 million coins. So you'd maintain, roughly, that $1 per coin value. Price doesn't depend purely on number of available units.
Drdrdrq 9y ago
I don't think so - that wouldn't make sense. Any cryptocurrency's survival depends on early adopters, so it makes sense to award them. Note that their risk is higher too. Don't believe that? Join them. :)
- spookthesunset 9y ago
  That is cool and all, but if bitcoin was ever even close to being "mainstream" you can bet your ass there would be a bazillion articles, FB posts, tweets, etc from people who do not like the idea of being locked out of the economy unless they buy "the future of money" from a relative handful of early adopters. Such an idea is, to be blunt, complete horseshit. The idea that every person on earth needs to first purchase Bitcoin from a handful of early adopters in order to continue to participate in the economy is flat out loony-toon nuts. No matter how Bitcoin evangelists try to frame it, it's just not gonna happen. Don't think that the lack of discussion about this means it isn't an issue. It is a massive, massive showstopper to Bitcoin adoption. The reason you don't see more people talking about this is because Bitcoin is absolutely nowhere near becoming the default currency used by anybody. Much easier to beat up on all the other massive technical flaws in Bitcoin...
  - craigc 9y ago
    I am not sure that long term BTC will actually replace USD or another government backed currency. I think it would take a LOT for that to happen. If that does happen then that means the value of the USD and every other currency will decline at the same time as the value of BTC increases which could lead to a global financial collapse. That said, if it were to happen, I don’t think you will have to buy bitcoin from a handful of early adopters. It is more likely that your employer would start paying you in Bitcoin when it becomes inevitable. Those same early adopters who hold a lot of the wealth will likely use their wealth to invest in startups/charities/companies/etc. the same way as entrepreneurs and rich people do today.
    - johnny22 9y ago
      and from where would they get the bitcoin?
thisisit 9y ago
Serious question - why will you get more excited about something like that? This is like saying I might want to invest in a company which didn't favor seed investor. If you were excited about a coin and you wanted to invest - wouldn't you want more coins? If the reward is skewed in favor of later reward, why would anyone bother at all? In case you are serious about this you might want to check Peercoin. While it doesn't have the skew you want, the supply is designed to attain an annual inflation of 1% instead of deflation in bitcoin.
- UncleMeat 9y ago
  Because you aren't investing in a company. You are using infrastructure. I'm not super excited about a new system that has even less wealth equality than we currently have.
anonymous5133 9y ago
Everyone currently buying crypto is an early adopter right now
kekeblom 9y ago
There is a project called Basecoin. Here is an article about it: https://www.coindesk.com/basecoin-revealed-a16z-metastable-seek-crypto-holy-grail-stable-token/ https://www.coindesk.com/basecoin-revealed-a16z-metastable-s... Unfortunately, I don't know much more about that project at this point.
acover 9y ago
There are several universal basic income coins. The issue is why use them? The bootstrap problem.
AgentME 9y ago
There aren't good ways of making a decentralized cryptocurrency that scales its minting/inflation rates with its current market value (what specific market is the "decentralized" software coded to trust?), so unless a cryptocurrency exactly predicts its future adoption/demand rates and fits its minting schedule to that, then it's very unlikely to give only "reasonable-sized" returns to its early adopters.
stordoff 9y ago
Is that even possible without rapidly inflating the currency (which could well mean it never gets the early adopters at all)? It seems to me almost inherent that as a currency becomes more useful it will become rapidly more valuable, thus disproportionately rewarding early adopters.
Frogolocalypse 9y ago
Risk = reward.

tromp 9y ago

Grin is trying to discourage speculative investing by having a linear emission curve, a decision that is frequently questioned, see e.g. this discussion https://www.reddit.com/r/Mimblewimble/comments/7dlcol/grin_unlimited_supply/ https://www.reddit.com/r/Mimblewimble/comments/7dlcol/grin_u...

bitxbit 9y ago
What’s a good “paid-in capital” estimate of bitcoin?
- tromp 9y ago
  Do you mean the sum over all blocks of block reward times bitcoin price at time of mining?
- irickt 9y ago
  I've been wondering this too and haven't been able to find any estimates. By "paid-in capital" I think you are trying to get at how "leveraged" the holders of bitcoin are, or how much non-cryptocurrency was used to buy the bitcoin relative to current "market cap". This is complicated by the mining costs incurred and by the fact that trade for other cryptocurrencies obscures the source of funds. But understanding the distribution of how rich bitcoin holders feel would help a lot to understand the market.
  - bitxbit 9y ago
    Yep. It would be an interesting exercise. IMO bitcoin valuation is more or less btc-based assets minus discounted cost of btc network. Me thinks it’s negative right now.

vminkov 9y ago

Maybe USDT (Tether) if you feel foolish enough to ignore the fraud alerts...

philipwhiuk 9y ago
So basically dollars. I'm not sure but I think that already has a wealth inequality problem.

mtgx 9y ago

You'd probably have to find a cryptocurrency that has an extremely high inflation rate. There's no other way around it. So let's say initially 1 million "coins" are created and people put $1 million in total in them, so each are worth $1. To keep that $1 price, you'd have to increase the amount of coins each time more people want to buy more such coins. So if new people put another $1 million into the cryptocurrency, you'd have to automatically generate another 1 million coins. So you'd maintain, roughly, that $1 per coin value. Otherwise, with any relatively finite amount of coins in a cryptocurrency, you're going to see an exponential rise in their values, as more people get interested in that cryptocurrency. It doesn't matter if you create 1 million or 1 trillion coins initially. If the inflation rate is "only" say 10% per year, but millions of dollars, and then tens of millions of dollars, and then billions of dollars are put into that cryptocurrency within a relatively short amount of time, its value is going to explode.

dominotw 9y ago
>So if new people put another $1 million into the cryptocurrency, you'd have to automatically generate another 1 million coins. So you'd maintain, roughly, that $1 per coin value. Price doesn't depend purely on number of available units.

Drdrdrq 9y ago

I don't think so - that wouldn't make sense. Any cryptocurrency's survival depends on early adopters, so it makes sense to award them. Note that their risk is higher too. Don't believe that? Join them. :)

spookthesunset 9y ago
That is cool and all, but if bitcoin was ever even close to being "mainstream" you can bet your ass there would be a bazillion articles, FB posts, tweets, etc from people who do not like the idea of being locked out of the economy unless they buy "the future of money" from a relative handful of early adopters. Such an idea is, to be blunt, complete horseshit. The idea that every person on earth needs to first purchase Bitcoin from a handful of early adopters in order to continue to participate in the economy is flat out loony-toon nuts. No matter how Bitcoin evangelists try to frame it, it's just not gonna happen. Don't think that the lack of discussion about this means it isn't an issue. It is a massive, massive showstopper to Bitcoin adoption. The reason you don't see more people talking about this is because Bitcoin is absolutely nowhere near becoming the default currency used by anybody. Much easier to beat up on all the other massive technical flaws in Bitcoin...
- craigc 9y ago
  I am not sure that long term BTC will actually replace USD or another government backed currency. I think it would take a LOT for that to happen. If that does happen then that means the value of the USD and every other currency will decline at the same time as the value of BTC increases which could lead to a global financial collapse. That said, if it were to happen, I don’t think you will have to buy bitcoin from a handful of early adopters. It is more likely that your employer would start paying you in Bitcoin when it becomes inevitable. Those same early adopters who hold a lot of the wealth will likely use their wealth to invest in startups/charities/companies/etc. the same way as entrepreneurs and rich people do today.
  - johnny22 9y ago
    and from where would they get the bitcoin?

thisisit 9y ago

Serious question - why will you get more excited about something like that? This is like saying I might want to invest in a company which didn't favor seed investor. If you were excited about a coin and you wanted to invest - wouldn't you want more coins? If the reward is skewed in favor of later reward, why would anyone bother at all? In case you are serious about this you might want to check Peercoin. While it doesn't have the skew you want, the supply is designed to attain an annual inflation of 1% instead of deflation in bitcoin.

UncleMeat 9y ago
Because you aren't investing in a company. You are using infrastructure. I'm not super excited about a new system that has even less wealth equality than we currently have.

anonymous5133 9y ago

Everyone currently buying crypto is an early adopter right now

kekeblom 9y ago

There is a project called Basecoin. Here is an article about it: https://www.coindesk.com/basecoin-revealed-a16z-metastable-seek-crypto-holy-grail-stable-token/ https://www.coindesk.com/basecoin-revealed-a16z-metastable-s... Unfortunately, I don't know much more about that project at this point.

acover 9y ago

There are several universal basic income coins. The issue is why use them? The bootstrap problem.

AgentME 9y ago

There aren't good ways of making a decentralized cryptocurrency that scales its minting/inflation rates with its current market value (what specific market is the "decentralized" software coded to trust?), so unless a cryptocurrency exactly predicts its future adoption/demand rates and fits its minting schedule to that, then it's very unlikely to give only "reasonable-sized" returns to its early adopters.

stordoff 9y ago

Is that even possible without rapidly inflating the currency (which could well mean it never gets the early adopters at all)? It seems to me almost inherent that as a currency becomes more useful it will become rapidly more valuable, thus disproportionately rewarding early adopters.

Frogolocalypse 9y ago

Risk = reward.