[ExI] Thoughts on Ethereum?

[Brent Allsop]

Thanks Micro,  that is very interesting information.

It seems to me that Adrian has a good point about small percentages 
being much more significant than you are making them out to be.

And your data is only covering a period in financial history where the 
money supply is being pumped up way beyond any money growth rate in our 
federal reserve history.  Everyone considered the new Federal reserve 
chairman, Janet Yalen's?), job to be to reverse this trend and make it 
go negative for a long period of time. Everyone is wondering how she 
will be able to remove all this money that has been dumped into the 
system during the time of your graphs.  Many doom and groomers 
predicting that it will not be possible, and that inflation will go way 
beyond what it was in the 70s.


On 3/16/2014 2:00 PM, Mirco Romanato wrote:
> 	
> Inflation (theoretic) rates compared
> 	Dogecoin	Bitcoin	Litecoin	Ether
> 2015	5.26		10	33.3		33
> 2016	5		9.09	12.5		25
> 2017	4.76		4.1	11.11		20
> 2018	4.54		4	10		16.6
> 2019	4.25		3.85	9.09		14.29
> 2020	4.2		3.7	4.1		12.5
>
> In this we see Ether is more like Doge on long term, because it has a
> fixed issuance of new ethers (from day one) where Doge have a fixed
> issuance of Dogecoin after one year.
>
> Litecoin e Bitcoin, instead, have a halving issuance every four years
> (with a two years advantage for Bitcoin).
>
>
>> Invictus Innovations Bitshares, on the other hand, will have zero new
>> coins coming into production after the initial genesis block is seeded.
>> In my book, this will be a much better investment (I have invested in
>> them).  But then, there is unobtanium coins, that takes this theory to
>> the extreme, and it isn't doing well either, so who knows.
> What hit me, compiling the data above, is even ethers and Doges start
> appearing interesting to hold against the USD (Yen, Renmimbi, Euro,
> etc.) after a few years.

This seems completely unjustified to me.  First off, do you even think 
Bitcoin will be around, in anything like it's current form beyond 2020?  
About 4 percent for the best of these still seems like it could be far 
above the growth rate of the world economy, especially if we start to 
have any recessions during that time. Isn't the average annual growth 
rate of the entire world economy only about 2 or 3 percent per year, 
over the long haul?  Do you have any annualized data for this (again, 
not just during these recovery from a recession years you are reporting?


> What could support the value of ethers is the fact you need to spend
> them to setup contracts and more complex the contract (more steps it
> has), more ethers must be spent on it in fees.
> Some ethers must be spent to pay for the various steps of the contract,
> so they will be unavailable until the steps are executed. Others will be
> linked to the contract and on hold until the contract end.
> This could cause a larger share of ethers to be hold and unavailable
> compared with Bitcoin.

Seems to me, unless these are very small amounts of ether, per contract, 
nobody would use it as the cost would be prohibitive?

>
> For example: a transaction using Bitcoin prevent the bitcoins to be
> spent for one hour (six confirmations) so the same bitcoin could be
> transacted 24 times a day (at most). An Ethereum contract could last
> days, weeks, months and the ethers used would be mostly (like 99.9%)
> unavailable.

But people, like coinbase, are already talking about micro transactions 
being done in Bitcoin, off block.  So things like that could drastically 
alter the impact of this kind of analysis, right?

>> To me, all these hard coded inflation rate currencies are 'dumb' coins,
>> which will never work in the long run, and are nothing more than flashes
>> in the pan (although very big flashes).  I think a 'smart' coin that can
>> intelligently adjust will easily out compete any inflexible dumb coin.
> I think the reverse.
> Any coin flexible will be flexed and gamed by TPTBs for their profit and
> our loss.
> Any inflexible coin will not and will keep the field leveled.

I seem to be much more Keynesian, and you much more Austrian in our 
working hypothesis.  Oh, and the power that be (TBTB) in the smart canon 
coin case, are the holders of the canon coins.  The holders of the coins 
would be the ones that vote their coins, in an amplification of the 
wisdom of the crowd process.  It is my working hypothesis that such an 
amplification of the wisdom of the crowd process would vastly out 
perform the intelligence and agility of any hierarchically organizes 
power that be.  To say nothing of being able to do, whatever the holders 
of the coins say, concisely and quantitatively, they want, getting 
measurably perfect buy in of everyone.  Also, the work being done to put 
new currency into production, could go to whatever the holders of the 
currency want, vastly more efficient than what today's centrally 
controlled government hierarchies are able to do, if they are able to do 
anything at all, other than polarize on trivial issues and endlessly 
argue about them.

Brent Allsop