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Freicoin is "Bitcoin with demurrage".

It is an alt chain with the design goal that holders of the coin will have negative interest rates, as a means to increase the velocity of money by reducing the incentive to save. Fees are taken for holding coins and distributed to miners.

The design of Freicoin specifies that during the initial money creation period (approximately 3 years), 80% of the generated Freicoins are to be distributed by the Freicoin Foundation via donations and only 20% are awarded to miners. This differs significantly from Bitcoin, in which 100% of issued Bitcoins are awarded to miners. At the time of writing this, the exact methods and procedures describing how the Freicoin Foundation would direct its donations, were not available yet.


Why would someone choose to hold a Freicoin and incur demurrage, where he can just hold Bitcoin instead?

Assuming they already have the Freicoin, exchange fees to Bitcoin may be greater than the loss from demurrage.

Demurrage incentivizes miners to a greater degree than transaction fees, to provide the network with a higher hash rate. The network hash rate needs to be maintained above a certain level to prevent "51% attacks" (double spending, etc). Thus, in a situation where network A rewards miners with transaction fees and network B rewards them with demurrage in addition to that, lack of transactions or unwillingness of transactors to offer fees can starve miners on network A (causing the hash rate to drop and opening up avenues for attack) but cannot starve miners on network B. Upon this difference might depend the number of miners operating on each network, and the hash rate of said networks.