Freicoin is a peer-to-peer (P2P) currency based on the accounting concept of a proof-of-work block chain used by Satoshi Nakamoto in the creation of Bitcoin. Unlike Bitcoin, Freicoin has a demurrage fee that ensures its circulation and bearers of the currency pay this fee automatically.
This demurrage fee was proposed by Silvio Gesell to eliminate the privileged position held by money compared with capital goods, which is the underlying cause of the boom/bust business cycle and the entrenchment of the financial elite, and has been tested several times with positive results.
How Freicoin works
In Freicoin, currency is produced through a process called “mining”, the execution of tasks required to keep the network running and secure. Every Freicoin client is capable of performing these tasks, but in practice mining is the domain of computer enthusiasts and IT professionals with tuned top-level hardware.
New currency is created in strictly limited amounts according to certain math algorithms implemented in the Freicoin client. The total amount of currency in circulation will smoothly increase for approximately 3 years following launch, until it stabilizes at 100 million coins.
Freicoin the 3-year initial distribution, part of the newly created currency is given to the miners in proportion to their contribution, starting at 30% of new coins (on launch) and decreasing to 5% (at the point of stabilization). While the network is small and young, it needs more care and attention than when it’s become mature.
The remaining currency is distributed through the Freicoin Foundation, a non-profit organization aiming to promote Freicoin and support a sustainable world. 80% of the total will be distributed through the Foundation.
0% interest, forever
Freicoin parameters are carefully chosen to eliminate the basic interest component of investments, called the liquidity premium by economists. Usurious non-zero basic interest distorts the free market, incentivises poisonous greed, excess, and short-term thinking, and perpetuates a vicious cycle of boom/bust recessions.
Zero basic interest encourages sustainable investments, as long-term investments tend to be, by removing the time preference implicit inflationary (U.S. Dollar, Euro) or deflationary (Bitcoin) currencies. When business is conducted in Freicoin, participants value present and future holdings equally, and favor sustainable processes.
Stable long-term value
Demurrage forces freicoins to circulate at deliberately high rates. Separation of money’s roles as store-of-value and medium-of-exchange allows money to flow when it is needed, in good times and bad. Our careful selection of governing parameters creates a currency whose value is stable with neither price inflation nor deflation.
FreiExchange was developed by Fedde, the same person that made Fed&Fab mining pool and Freicoin Alliance. Fedde is the backbone of the freicoin community. When Freicoin was deslisted from all but Vircurex, Fedde decided to make an exchange where Freicoin can be traded.
Tips for securely storing your Freicoin
- Do your own research. Before sending any coins or private data to a wallet, make sure you have researched the wallet provider to make sure everything is above board. Keep an eye out for scam wallets, such as those using URLs only slightly different to the URLs of legitimate wallet providers, and check out some independent reviews for all the pros and cons.
- Back it up. Make use of your wallet’s back-up and restore facility so that if something ever goes wrong with your wallet, you’ll be able to recover your funds.
- Set a strong password. Now is not the time to be lazy when creating a password; take your time to create a strong and uncrackable code.
- Make use of all available security features. Make the most of all the security features your wallet offers, such as two-factor authentication or multi-signature transactions. It’ll offer increased protection for your funds and greater peace of mind for you.
- Update your antivirus software. Take care to regularly update the antivirus protection and anti-malware software on any device you will be using to access your wallet.
- Keep your private keys private. Last but not least, don’t underestimate the importance of your private keys. Store them somewhere safe and don’t share them with anyone else.