Number of Coins Committee

Ideas
#23

From jkoil: http://spacecollective.org/TheUndying/5970/Big-numbers-and-the-human-mind


Does anyone know, how people handle large sums of money in their everyday life?
http://en.wikipedia.org/wiki/Hyperinflation#Zimbabwe

The largest numbers, which I have used, were in Italy - and only 1 week's holiday:
1 USD was about 1000 lira... 

After people were forced to use too large numbers too long time, they usually change the currency unit: either drop zeroes from the numbers or take a new unit.
What is too large number for everyday life?
#24

When you talk about the "total money amount" why is it in dollars? What makes you think that is the best currency to originate from?


Most people on these forums have no love loss for the dollar, that is why we are here.  Still... it is the #1 currency in the world, by far.  The second is the Euro, and there really isn't a third as far as reserve currencies are concerned.  That basically the Euro and the Dollar make up 85% of the world currency reserves with all the rest of the currencies fighting for that left over 15%.  Of the breakdown of the 85%, the Dollar gets 60% and the Euro gets 25%.  And while the Euro is stronger than the Dollar, they are in a similar range with each other and tend to keep that.  Right now the Euro is .8 to the Dollar.  I could have taken the weighted average between the Euro and the dollar and come up with .94 but I didn't see the point in that.

Basically, I chose the dollar because it has long been the standard for international business.  If you don't believe me, next time you are at an airport, any airport in the world look at the foreign exchange displays in the window of the exchanges, the dollar is on top, and as the dollar moves, so will everything underneath it.


Why do you think an ounce is the amount to do the measurement? Why not gramm or cm
#25

All the discussions about number of coins have no sense. I personally like playing cards so i dont hate bigger amount of less valuable NEMs, its good to start playing poker game with one thousand NEM or more. But its all irracional, if expected 1 NEM starting value will be less or equal to 1 EU/U.S. cent it will be fully OK. 1.000.000.000 or 1.000.000.000.000 everything OK My starting poker pot will still contain the same amount of chips no matter that it will represent 100 or 100000 NEMs, we will still play for amount equal to few euro per every game, no matter if someone will buy-in for NEMs or in fiat.

So i have one only wish: solve it anyhow, solve it fast. There are more and more important things and questions than where will be the decimal point and how many zeroes will follow. Decimal point is small dot and Zero is still a zero of nothing.

#26

I have given a logical analysis earlier on here [url=https://forum.ournem.com/index.php?topic=2531.msg6776#msg6776]https://forum.ournem.com/index.php?topic=2531.msg6776#msg6776. The comparison was a simple one to draw some conclusion. I ended up saying that we could perhaps increase it to 80B instead, being 10 times that discussed. No one has disputed that suggestion. In fact not many acknowledged that either. Maybe they are in denial? I am not sure.

Since there is a call for a logical derivation and some form of conclusion, I am now going to confirm my initial conjecture mathematically. I hope this serves as a basis for increase. Not the crap that have been suggested, e.g.:


    [li]Too late to change[/li]
    [li]Confusion[/li]
    [li]Was cast in stone (as a matter fact, those who give this excuse are Flinstones and they shouldn't be in the crypto economy. Crypto economy is a dynamic economy with change being a constant)[/li]
    [li]Drop in value ( don't know what they are talking about without substantiation - typical of an antithesis heretic)[/li]
    [li]Anti Superstition ( when we have already moved on to increasing the base number to a higher number as the issue instead of superstition.)[/li]
    [li]And the list goes on, mostly without basis but statements of feelings and emotions[/li]


    Reference site: http://bravenewcoin.com/price/price-index/
    Time of evaluation :11/11/2014, 12:33:02 PM (AEST)
    More established Coins were excluded - Bitcoin, Litecoin, Namecoin, Peercoin, Primecoin - as it is not appropriate to compare with these "long time" coins. More can be taken out but the results will tell us that it is more favourable anyway. So, suffice to just take out five.


    Under BNCindex, with the 5 coins taken out as aforementioned, we have therefore 61 coins in consideration. Under BNC2.0, we have 8 more coins in consideration. Hence we have a reasonable sample size of 69 coins.

    We apply the Pearson product-moment correlation coefficient, r (or ρ), to compare the linear relationships of the Price/Supply, Price/Market Cap and Supply/Market Cap. Of particular concern is the Supply/Market Cap correlation. The correlation falls between -1 to 1, with -1 being oppositely correlated (i.e, a small value will correspond to a big value), 0 being no correlation and 1 being linearly correlated (i.e., rising values are in tandem linearly). The following diagram best illustrate what I mean.




    Based on the above, the following were obtained from the 69 coins:

    Price/Supply was = -0.042523124
    Price/Market Cap = -0.023708455
    Supply/Market Cap = 0.489481659

    Interpretation:

    The price of the the coin vs. supply in the sampled population is somewhat negatively correlated, although it is nearer to being uncorrelated. Hence we can say that the price varies insignificantly lower as the supply increases, which is obvious because we expect some dilution. But more importantly, they remain LARGELY UNRELATED!

    The same argument goes for the Price of the coin vs. the Market Cap, i.e., they remain LARGELY UNRELATED.

    Of significant observation is the Supply of the coin vs. the Market Cap. It shows, for the 69 coins in question, that the Market Cap LINEARLY INCREASES with the supply of the coin! At close to 0.49, the correlation is significant.


    Now let's take a look at BNC 2.0 components. There are 8 of them in question. If ever NEM is being considered it will fall into the Crypto 2.0 category and hence should fall under BNC 2.0.

    The Pearson product-moment correlation coefficient for these 8 were:

    Price/Supply was = -0.330035441
    Price/Market Cap = -0.285714882
    Supply/Market Cap = 0.866585382


    Interpretation:

    Applied to the BNC 2.0, it shows a runaway conclusion that there was significant price correlation with the Supply and the Market  Cap, in that the higher the market cap, the lower is the price and that the higher the supply is, the lower is the price. This is obvious thus proving the validity of the Pearson product-moment correlation.

    The most conclusive is that the Supply of the coins are directly correlated to the Market Cap, i.e., the higher the supply, the higher will be the market cap.

    Conclusion:

    It appears that there is a very high correlation between supply of the coins and the market cap for Crypto 2.0. There is a very high likelihood that the market cap will be higher if the number of coins are higher.

    Further, it shows very clearly that the front runner in the capitalization are those with higher number of coins. There is no conclusion however that there should be a sweet spot value. Given a linear relationship, it should theoretically mean that the supply should be infinite.

    However, consideration should be given to "over supply" to the point that the volatility is affected. From the observation, a BTC valuation of 0.0000X is considered safe and if we wish to have a market value of the order of $40 million and a price of 0.00001BTC (0.35 cts) to start with, then the number of coins should be about 11.5 Billion, say 10 Billion. This figure should balance between volatility, market cap and supply.

    If we believe that NEM is a run away winner in terms of features, use and superiority in technology such as PoI, Eigentrust ++, multisig, Business rules, then scaling it to 100B should not be a problem as that will neutralize volatility.

    I can therefore conclude that it should be 100B based on a high Pearson product-moment correlation factor.
#27

I talked with Jaguar and the number of coins needs to be less than 2^53, with the floating point part added (6 digits), in order for the number to fit inside a Javascript int. This is over 9 billion, but less than 8 billion. So why not make the number of coins 8 billion and simply double, as has been discussed? This is probably the easiest change to make.


More coins than this will make it harder for people to program to support NEM.

#28

https://bitcointalk.org/index.php?topic=654845.msg9502827#msg9502827


I think there's definitely a sweet spot somewhere. I think 4 billion are too few, but maybe closer to 100 billlion-1 trillion is a better range.


I think the number of coins is a very important part of an currency and should be chosen very carefully.
But numbers like above are scaring me a bit, to be honest.

1 000 000 000 000 (1 trillion) NEM x 1 satoshi equals 10 000 BTC.
The current NEM marketcap is 8 470 BTC, that would mean 0.847 satoshi per NEM.
With the current 4 000 000 000 NEM one NEM costs 211 satoshi.

The other problem I see with a too high number of NEM is the volatility.
Every cryptocoin is traded first of all in BTC. The smallest amount of BTC is 1 satoshi.
With 1 trillion NEM / 1 satoshi, a 1 sat change would mean +100% change in marketcap. 
At 10 sat per NEM it
#29

I talked with Jaguar and the number of coins needs to be less than 2^53, with the floating point part added (6 digits), in order for the number to fit inside a Javascript int. This is over 9 billion, but less than 8 billion. So why not make the number of coins 8 billion and simply double, as has been discussed? This is probably the easiest change to make.


More coins than this will make it harder for people to program to support NEM.


Based on Pearson product-moment correlation coefficient, I support that without "feelings or emotions"! However, I will support 9,999,999,999 where 1,999,999,999 will be used as a volatility damper by way of slow release into the system for harvesting reward.

Edit: I believe it should be under 9. OK. Then 8,888,888,888! 888,888,888 reserved for harvesting reward after year 3 for the next 8 years after that. Happy everyone??
#30


I talked with Jaguar and the number of coins needs to be less than 2^53, with the floating point part added (6 digits), in order for the number to fit inside a Javascript int. This is over 9 billion, but less than 8 billion. So why not make the number of coins 8 billion and simply double, as has been discussed? This is probably the easiest change to make.


More coins than this will make it harder for people to program to support NEM.


Based on Pearson product-moment correlation coefficient, I support that without "feelings or emotions"! However, I will support 9,999,999,999 where 1,999,999,999 will be used as a volatility damper by way of slow release into the system for harvesting reward.

Edit: I believe it should be under 9. OK. Then 8,888,888,888! 888,888,888 reserved for harvesting reward after year 3 for the next 8 years after that. Happy everyone??


This sounds good to me. Create 8 888 888 888 NEM, with 888 888 888 reserved for paying people to run nodes over 8 years, after the node rewards run out in 3 years. Thats 11 years of supporting the network, which should give NEM a good chance and becoming entrenched in the global economic system!
#31

For the sake of completeness, there is yet another option: move some of the decimals of precision to the left-hand side of the decimal. For example, if we had a precision of 3 instead of 6 places after the decimal, we could go up to 8 trillion NEM.

#32

For the sake of completeness, there is yet another option: move some of the decimals of precision to the left-hand side of the decimal. For example, if we had a precision of 3 instead of 6 places after the decimal, we could go up to 8 trillion NEM.


I do not believe this is a good solution. Fiat is 10 decimal places and is significant right up to 6 decimal places. 6 is the minimum as we may need that with colored coins. But I find <9Billion as a limit disturbing though. It may be a shortcoming for colored coins but I cannot give an example off my head now.
#33

As other people have mentioned, and I believe it is true, if there are too many coins than people will be reckless with them.  This could cause highs and lows and NEM might find itself in a crash that it can't recover out of. 

At the same time, too few and then people won't spend them as much and that too could stagnate the NEM economy. 

What is needed is the sweet spot. 

To me, what I think is a neat idea but an idea that I haven't seen any coin try is a decimal point that is floating.  Bitcoin actually needs this and has run into the problem that the number of Bitcoins is just far far too low.  At the current 13.5 million, it couldn't have any dream of being a seriously used monetary unit.  For instance, I have more than 13.5 million won (Korean money) right now, and that is just me.  This is a reason why so many people are focusing on changing bitcoin to the 100 satoshi denomination.  At that point the number of Bitcoins effectively increases to 13.5 trillion.  It is a lot easier to spread 13.5 trillion around and get people using it.  I think Satoshi knew this when planning.  And it is something that is desperately needed if Bitcoin will try to gain more market share.

I would like to see something like that set up for NEM.  Because right now with Bitcoin there is a big fight over should we switch and if so what should the name be?  What would be nice with NEM, is if we started out a lower number, to avoid too many fluctionations in the market and false bubbles.  Then after NEM is real and strong, have a mechanism in place to move the decimal point so it basically increases the amount of NEM supply by 10 or 100 times.  That could be done a few times and that way there would always be just the right amount of NEM. 

I don't know how this would be acheived, but my guess is to write it into the code from day one that after block… XXXXXXXXX that the decimal point moves one or two places. 

I really think the whole argument of "how many NEM do we need" is arguing about the wrong question.  This is because the amount of NEM needed will be different as it grows.  I think the real argument should be how do we manage the decimal point so that there are not ever too many or too little NEM, both of which are pretty disastrous on a platform. 

#34



I talked with Jaguar and the number of coins needs to be less than 2^53, with the floating point part added (6 digits), in order for the number to fit inside a Javascript int. This is over 9 billion, but less than 8 billion. So why not make the number of coins 8 billion and simply double, as has been discussed? This is probably the easiest change to make.


More coins than this will make it harder for people to program to support NEM.


Based on Pearson product-moment correlation coefficient, I support that without "feelings or emotions"! However, I will support 9,999,999,999 where 1,999,999,999 will be used as a volatility damper by way of slow release into the system for harvesting reward.

Edit: I believe it should be under 9. OK. Then 8,888,888,888! 888,888,888 reserved for harvesting reward after year 3 for the next 8 years after that. Happy everyone??


This sounds good to me. Create 8 888 888 888 NEM, with 888 888 888 reserved for paying people to run nodes over 8 years, after the node rewards run out in 3 years. Thats 11 years of supporting the network, which should give NEM a good chance and becoming entrenched in the global economic system!


Just read some back comments and saw this. 

If Javascript has its limits, then that makes the decision much easier.  We do want to make it easy for people to program for after all.  Most of us here agree that a bigger number would be better, but if Java sets the limit, than it 8.888888888 billion seems pretty good to me.  I like the price support of a little over 10 years too.  If NEM can't make it after 10 years, it won't make it at all.  The crypto explosion is coming soon where whoever is there at the right time will end up being first mover and gain a lot of market share. 

This is what happened with all big companies.  I think NEM is positioned in time very well!  Wright brothers didn't go on to have a big airplane company, somebody else did that.  Ford didn't invent the car, but he was the first one to do it big and do it right.  Microsoft wasn't the first to invent an operating system, but they just happened to invent one at the moment right before home computers vastly had its market expanded. 

At anypoint, I once saw a very long thread about why Satoshi choose 21 million with 8 points after the decimal.  Lots and lots of people argued about it, and then one dev, one of the original devs that worked with Satoshi way back in the day said, "It was the limit of the computer language," any bigger number would have made it much more difficult to do programming wise, and then everybody else shutup. 

It looks like this is the case with NEM and Java.  Whether it is NEM being created 1 per each person, or to match gold, or match the existing monetary supply, or all of these reasons, I think 8.888888888 sounds good to me.  It is a number that is limited by Java and has these other reasons supporting it. 
#35


Conclusion:

It appears that there is a very high correlation between supply of the coins and the market cap for Crypto 2.0. There is a very high likelihood that the market cap will be higher if the number of coins are higher.

Further, it shows very clearly that the front runner in the capitalization are those with higher number of coins. There is no conclusion however that there should be a sweet spot value. Given a linear relationship, it should theoretically mean that the supply should be infinite.

However, consideration should be given to "over supply" to the point that the volatility is affected. From the observation, a BTC valuation of 0.0000X is considered safe and if we wish to have a market value of the order of $40 million and a price of 0.00001BTC (0.35 cts) to start with, then the number of coins should be about 11.5 Billion, say 10 Billion. This figure should balance between volatility, market cap and supply.

If we believe that NEM is a run away winner in terms of features, use and superiority in technology such as PoI, Eigentrust ++, multisig, Business rules, then scaling it to 100B should not be a problem as that will neutralize volatility.

I can therefore conclude that it should be 100B based on a high Pearson product-moment correlation factor.


That was an awesome analysis.
#36

https://www.youtube.com/watch?v=M5y8r2MXYpY&list=PLRgTUN1zz_ofJoMx1rB6Z0EA1OwAGDRdR&index=12


Interesting video about comprehending what a trillion is.

#37

I watched that yesterday. Very good stuff.

#38

http://thedailycrowd.files.wordpress.com/2012/10/global-money-supply.png 
80 000 000 000 000 00  cents in total from around 2011
I say cents because the smallest unit of NEM should be small enough to buy a penny sweet.
8 billion total units of NEM would be.  8 000 000 000 000 000 smallest units.

8 billion NEM covers these numbers perfectly according to this graph.

There would be more than enough NEM if there was no QE 4 as deflation should set in.
There would not be enough NEM if QE 4 takes place which I expect to happen.

The more I think about it 80 billion or  800 billion would be safe and ensure enough NEM .
If the latter was chosen then I would prefer to go to 1 trillion.

I dont expect to get my way though… :slight_smile:

#39

What nembit86 wrote is right.

#40

I was looking at 10+ month old tipping in other alternates on Reddit and I didn't really see any correlation between tipped amounts and publicity. 

In this case we should be focusing on other correlations (like Rockethead indicated).


#41

http://thedailycrowd.files.wordpress.com/2012/10/global-money-supply.png 
80 000 000 000 000 00  cents in total from around 2011
I say cents because the smallest unit of NEM should be small enough to buy a penny sweet.
8 billion total units of NEM would be.  8 000 000 000 000 000 smallest units.

8 billion NEM covers these numbers perfectly according to this graph.

There would be more than enough NEM if there was no QE 4 as deflation should set in.
There would not be enough NEM if QE 4 takes place which I expect to happen.

The more I think about it 80 billion or  800 billion would be safe and ensure enough NEM .
If the latter was chosen then I would prefer to go to 1 trillion.

I dont expect to get my way though...... :)


That is nice.  I had been looking for the M3 when I started my calculations but it is more abstract so much harder to find.  I am glad you found it. :-)
#42


http://thedailycrowd.files.wordpress.com/2012/10/global-money-supply.png 
80 000 000 000 000 00  cents in total from around 2011
I say cents because the smallest unit of NEM should be small enough to buy a penny sweet.
8 billion total units of NEM would be.  8 000 000 000 000 000 smallest units.

8 billion NEM covers these numbers perfectly according to this graph.

There would be more than enough NEM if there was no QE 4 as deflation should set in.
There would not be enough NEM if QE 4 takes place which I expect to happen.

The more I think about it 80 billion or  800 billion would be safe and ensure enough NEM .
If the latter was chosen then I would prefer to go to 1 trillion.

I dont expect to get my way though...... :)


That is nice.  I had been looking for the M3 when I started my calculations but it is more abstract so much harder to find.  I am glad you found it. :-)


I think they stopped looking at M3 recently.