[P2P-F] Freicoin - Bitcoin with Demurage (Kevin Flanagan)

Fri Jun 29 04:41:15 CEST 2012

Hi,

The reasoning behind demurrage is to discourage hoarding and encourage
investment in real assets and economic exchange ie to keep money flowing.
One of the problems of the current crisis is that money is not flowing.
No matter how much the banks are bailed out they still refuse to lend.
If it is too costly to hoard then the only thing to do is invest in
tangible assets.

It's a stretch to imagine the rich using such a currency by choice.
At what point would a demurrage currency out compete traditional currencies?
For the poor it is a political choice to use a demmurage currency.
Since the poor live paycheck to paycheck and their income is usually spent
quickly on necessities then a demmurage won't effect them as much as it
would the rich who always have the problem of what to do with their money.
If enough people used a demurrage currency instead of traditional
currencies then the value of traditional currencies would start to fall. It
is possible that traditional currencies could loose value faster than a
demmurage currency. The rich would have no choice but to choose to use the
demmurage currency.

One of the things that I don't get about the Freicoin is that there is a
discussion on what to do with that negative interest. As if the interest is
charged and that it should go somewhere or to someone. Of course this would
make it just like a tax.
In my understanding the interest should not go anywhere or to anyone it
should just disappear.

Regards

Kevin
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