Something interesting is happening in the little corner of the crypto-world that is Freicoin
Looks like something interesting is happening in the little corner of the crypto-currency world called Freicoin. Back in 2013, Freicoin was considered the possible successor to Bitcoin, but, alas, that never happened. In fact, Freicoin almost died. Now, a combination of grass roots energy, the growing market of crypto-currencies, the developers returning to the coin, and the ending of the Foundation (a correction of a seismic significance to Freicoin policy), are creating considerable excitement within the Freicoin community.
If you remember, Freicoin is one of the oldest Bitcoin clones from way back in 2012—in the blockchain history that’s equivalent to a century. To this day, you still find Freicoin mentioned in most books and references on cryptocurrencies as being one of the most innovative coins. Its innovation was not in a new hashing algorithm or block time, but in incorporating special monetary policy. Consistent with the mood of the times, the post 2008 derivatives bubble, Freicoin proposed a zero-inflation coin with a demurrage fee (recirculate as mining rewards) to discourage speculation and ensure currency circulation. This remains significant since demurrage coins have appeared in history in the works of Silvio Gesell and FDR’s Stamp Scrip. That is, unlike other coins that are trying to find problems blockchain can solve, Freicoin added some real-world financial solutions to a blockchain.
The death of Freicoin:
There were three reasons why Freicoin died: (1) the Foundation; (2) the demurrage structure; and (3) the developers taking a hiatus from the coin (but to, in fact, work on something better).
The Freicoin Foundation was originally intended as a community engagment experiment in alternative methods to distribute the currency. Freicoin wanted to distribute 100 million coins in 3 years and not all through miners. The Foundation was supposed to distribute 80 million coins by sponsoring projects to promote Freicoin and crypto-currencies as well as various charitable organizations. It was hoped that the community would also develop an automated mechanism to distribute Foundation funds. Slowly, however, that idea died as the developers and community members were all volunteers. The optics of the Foundation were not very good either. Many saw it as a possible scam. In the end, most of Foundation funds had simply remained untouched.
At the beginning of the crypto-currency days, Freicoin’s 5% annual demurrage fee appeared very high compared to Bitcoin’s transaction fees. Users (speculators) did not see the purpose in discouraging speculation. The demurrage per block discounting also created difficulties for exchanges and block chain explorers based on the shareware that could not perform the appropriate calculations. Exchanges compensated by charging high fees which resulted in them abandoning Freicoin as its market share dropped.
The developers left Freicoin. The developers Mark Freidenbach and Jorge Timon left Freicoin to found BlockStream to do mind blowing code wizardry creating SegWit and Lightening etc. making Bitcoin history!
Fast forward to 2017.
The rebirth of Freicoin:
Over this last year, Bitcoin users have been paying on average (and this is a low estimate) of 175 BTC in fees per day. That’s about 4% per year. Also, mining rewards have increased the money supply by another 4% approximately. The crypt-currency trade exchanges are ripe with speculation. With this increasing use of Bitcoin and gross speculation around, most crypto currencies, Freicoin’s demurrage and zero-inflation features are being more appreciated. Remember it’s a real-world solution. Also, the Freicoin community members have created their own exchange and modified Abe (a database based program emulating an explorer) to account for the demurrage accounting.
Just recently, the developers have become more present in the Freicoin community, announcing a renewed commitment to the project. This commitment is in the old-school volunteer sort of way, so there are no ICOs etc. This commitment is about bringing the technology BlockStream invented into Freicoin, as well as features such as confidential assets from the Elements Project. Also, the developers suggested ending the Foundation.
Only about 6% of the Foundation funds were ever circulated and no basic income project was ever created. The Foundation just looked like a central bank ready to be robbed. The decision was made to end the Foundation. The community voted on and it was decided to honour its present commitments but destroy the remaining Foundation funds.
For more information on the future of Freicoin see here:
For the exchange see here: http://www.freiexchange.com
Oh. Did I mention that Freicoin is underrated, siting at 631st place on CoinMarketCap? You see? That’s exciting. Yeah.