Some suggestions for freicoin;

Hi Jtimon,
first thank you for your great effort developing this!
The last year since I become aware of bitcoin I spend many thoughts about how to create a money with demurrage and how to use the demurrage and how to implement it. I will be happy if you find some ideas helpful for freecoin ;)
In my opinion the most important for the usefulness and therefore acceptance of freicoin is, that the demurrage or generally the creating of freicoins does support the propagating of a through the commnity defined ethic and values which comes along with this ethic. Otherwise what is the benefit to bitcoin?

I think we must find a solution where at least a part (for example 50%) of the demurrage is distributed for propagating the ethic, like for exmale charitable interests,ökology, sustainable living, education or gesells free land idea.
My preferred option is to distribute the money as a basic income to all participants. This will in my opinion create the biggest chance that people will use it, because only people who have this kind of money will use it :)
To sign the participants I suggest the following method (if someone find a better solution like web of trust or other methods to verify the participants, I will be very happy:))
- each signed participant receives X (for example one coin. could of course also be a percentage of the demurrage) per day (and so X/24/6 per block if a block is created each 10 minutes :))
- There is a list of Y (in the beginning Y should be less so that you can have an eye on them :), as time comes and eyes are becoming more this value can increase) so called signing authorities (technically a list of their addresses) which have the ability to sign which address belongs to a signed participant that is qualified to get basic income
- which address is standing on this list and has therefore the right for signing participants is realized through voting with so called "voting transactions" (VTs)
- a VT looks like a normal transaction, but no freicoins is transferred (only the fee)
- (perhaps the best way of implementing this is to handle the voted money in the same way as “normal” money is handled. So each address can have freicoins and so called “signing authority coins” (SACs) and can transfer them further and also the demurrage applies on them. One possible way of creating the SACs would be, that for each “demurraged” freecoins the same amount of SACs is created on this address. That’s only one possible way. More thinking must be done here:))
- the top Y voted (Sum of Money VTs signed to this address) have the right for signing participants
- a participant is signed valid for Z (for example 42 weeks) through a so called "signing transaction (ST)
- a ST looks like a normal transaction, but no money(only the fee) is transferred, and only signing authorities can create such a transaction
- the number of allowed valid signing transactions at a given time is limited to Q (Q could increase in time. perhaps it is a good way to define Q through the amount of money which is voted through VTs for example if 4200 money is voted to X, X has the ability to sign for Q = 4200 /42 =100 participants on the same time)

Of course this is only one suggestion and many more details must be considered. but I find it worth that we do think about it. If we really want to create a money subsystem which does something good, or at least better than current money systems we should spend this time :)

Notes:
- To make it more stable possible its good, that only a new signing authority replaces and old one if it has double of money voted to them, and or the requirement must be hold a certain amount of blocks (For example 62442 blocks (42 Days))
- Perhaps its also good to allow a “negative” vote which could implemented the same way through VTs
- Of course it could also to be good if you allow a inverse (undo) signing function for participants. For this STs can easily be used

One Example:
Money Per Block (X) = 1 /24/6
This means that each signed participant receives 1 Coin per day.
I think this can be a good way of implementing it, because in this way the generation of coins is directly connected to the amount of signed participants. -> the more participants means more money. And less participants means less money. So fluctuations of value should hopefully be less ;)

Number of allowed signing authorities Y = 42
Why in the beginning such a small number?  Because in the beginning you must really have an eye on them if they do it right (follows the commonly agreed ethic of which participant is signed valid and which not). And why 42, because we need a magic number, and magic numbers should be very less, and I prefer to have only one. And why then 42? Of course because it is the answer to all questions :)
If it is good to increase this number or not as times goes on I don’t know yet. At this moment I think its best not to increase it at all.

Number of blocks which the signing of a participant is valid Z = 42 * 7 * 24 *6
This means a signing is valid for round about 42 weeks. Why 42?  Because you know it :)

Number of signed participants allowed per signing authority Z = Sum(Money from VTs to this authority) / 42
This means that a signing authority with money worth of 4200 its voted to can sign (verify) 100 participants at the same time. So theoretically in this example if all money is used for positive voting and with each participant becomes one coin per day, every 42 days the verified participants can nearly double

So what would be good to have in the initially blockchain?
- The list of the first 42 signing authorities
- The list of the first signed participants  This could be the initial community member which support freicoin. Remember, that in this example they must be resigned during the next 42 weeks through one of the signing authorities if they still want to become the basic income.
- And most important the definition of the initial ethic of the freicoin comunity - And of course all the other bitcoin stuff which is needed…

How are miners rewarded?
In my opinion how miners are rewarded should be discussed in a different topic. One possibility can be to give them for example 50% of the demurrage. Perhaps this value should be higher in the beginning and less as the money develops. Perhaps the bast way is to give only the transaction fees to the miners. This depends a lot how the validation of the blockchain is implemented. I also used many thoughts on how this can be realized in a better way, but that’s also another topic ;)

What should happen with the demurrage in this example?
In my opinion the best way to handle demurrage in this example whith the basic income is just to delete it. New Money is created through signed participants per block. And the miners are rewarded only through transaction fees. With a basic income as in this example, each participant should have enough money to pay to the miners for validation their transactions.

Further benefits:
Possibility of creating more security through signed accounts: With signed accounts (addresses) there is the possibility to increase the security. For example you can easily change the protocol in that way, that you can define if you want to be able only to transfer money to signed accounts from this address. But how this can look like is another topic :) Propagating Ethics:
In my opinion the most important in creating a new currency is to make sure, that this money helps to propagate an with this money associated ethic and certain values which comes with this ethic. The most we lack in our time is not money, the most is ethics and values in society. So my suggestion would be to develop an ethic in the freicoin community and then store this ethic and values in the first block. Perhaps it is good to have one part of the ethic which is set in stone (ok in this case in bits in the first block :)) and one part which could be voted on the same way as it is voted on the list of signing authorities. In this ethic you can also write, what properties a signing authority must have (like the level of transparency and so on) and what qualifies a participant to receive a basic income.
One possible qualification of receiving a basic income could be:
- The participant aggress to the ethics and values of freecoin
- The participant agrees to spend at least 42 hours a year for propagating this ethic and values - The participant agrees to spend 50% of his received basic income for propagating this ethic and their values (for example for gesells freeland idea. So land could be bought which is ecologically and sustainable used. Perhaps it would also be good, that P% of the income which is generated with this land is used in generating a further basic income, or for education facilities ok lets better discuss this in another topic :) )
- The participant agrees, that his name and birth date is made public at least between the signing authorities (perhaps also in the blockchain?)

Why should a receiver of a basic income be transparent?
First of all the money can still be uses in an anonymous way. But in this case you initially now which person has initially created the money. In my opinion the greatest difficulty bitcoin faces now or will face in the future is, that a lot of “nonsense” could be done with it. Perhaps here it is a good way to say, that we are good guys, and that we have ethics and values, and that we stand for our values. And I also think that it gives a lot of trust if the first layer of the protocol is as transparent as possible. So in the beginning we should start with only verified accounts. Or accounts which are created through a verified account. If someone does want something else he can use bitcoin. Also it is still be possible to later allow anonymous accounts, and also there still is the possibility of a creating a second layer, which takes care of anonymity. This could be realized the same way, like bitinstant functions. So in the top protocol this anonymous transactions are not visible at all. I find it most important for the success of this currency that we make the start and the main protocol of the currency as transparent as possible. But that’s now my opinion, I would be happy to discuss this further in another topic.

Conclusion:
Of course there are many other possible ways how to use the demurrage and how to implement a basis income. But I think it is very important, that freicoin is more than just a bitcoin clone with some demurrage added. For me the most important is to propagate an ethic with certain values. Freicoin should be a tool for propagating this ethic. Also I believe we can create a much better currency if we make the main protocol as transparent as possible, so we can avoid a lot of trouble bitcoin has and will most likely have. For me In this case decentralization and transparency is more important than anonymity. Anonymity can be granted in an second layer.
So lets have some fun and make the world at least little better :)
Martin, a computer scientist from Germany

P.s. : Another way of using the demurrage without implementing a basic income could use something like the described signing authority list to distribute a percentage of the demurrage to. If there is interest I can make an example for this.

P.p.s: The same voting system like used for the signing authorities can of course also be used to vote for other stuff. Perhaps it would be good, that the protocol is so flexible, that it allows participants to define their own stuff they want to vote on. This would also give the money some kind of initial usability which is directly connected with the money.