Bitcoin Forum

Just a little research into the right numbers for coin retention and distribution

What do you think is fair given, say, a 6 month full time time commitment from the said individual and no ICO/startup funding

Any other mitigating circumstances?

Eager to hear your thoughts

AM

Great that's what I've been working off!

All the early adopters including the developer of Carboncoin are all capped at 2% ownership, with the only exception being the charity which has had about 4 donated

Zero. 
 
but...   
 
Zero.

but an early adopter might own how many in your opinion?

It is on the market to decide that...

Do you think there's a point, in percentage terms, where the size of one individual's holdings would have a negative effect on the price?

I voted 0.2-0.4% the devs should have funds that he can use to fund related projects for his coin or the project will just stand still or no movement at all,the devs handle marketing and development of his coin not all holders are willing to donate funds for his continous works

Considering Satoshi owned 10% of Bitcoin, probably not, though it does create a bad situation.  On the other hand, there are some technologies where one holder controlling too many tokens could break privacy features. 

Ten percent seems like a disproportionately high amount for someone to own if they develop the thing in the first place, but having manually distributed coins on a network for over 2 years I can readily see how a 10% shareholding might come about in the normal organic growth and development of this technology.

I have consistently sold coins to keep my holdings reasonable, and also limited the amounts we will sell to those investing so that we can make sure that we benefit as much as possible from the network effect.

If you look at many rich lists an approximately 10% max holding appears to be commonplace - but individuals with that many coins would be able to manipulate the markets freely, however this does not seem to put off investors and these coins are often very successful.

Do you think an oligarchy is necessary for driving demand and value appreciation?



Obviously PoS coins pay an "interest rate" to incentivise people to hold onto them, and masternode networks allow mining in proportion to coin holdings. Both of these things incentivise people to acquire an increasing stake. I ask because Carboncoin does not have that, our focus being on raw capital growth.

Most of you voted "Nothing at all", but you must be joking, right? :) Let's say that a developer has 0.5% of the entire supply. That would give him like $5,000 if the coin reaches $1Mn market cap. Don't you think that this is unfair? I see nothing wrong if the developer of a particular coin holds a bit more of it as long as he is not buying before releasing some news and selling when he knows it goes nowhere...

I think "nothing at all" assumes that the developer has raised enough funds to start the thing on a salary anyway, not sure if this is the crypto-startup status quo these days. There is nothing about an ICO in the question for example.

Could there be legal ramifications if the person who is starting the network at genesis block effectively issues himself with coins? 

It makes clear sense that those who help a network are rewarded for doing so

i think he need to use those money for the development of the coin, and not for dumping his own coin for bitcoin like 99,99% of dev do lol, soif he is a legit dev i would say that 15 is ok to give him as a reward to develop further his coin, otherwise zero coins is always good, because he need to mine like any other here

Interesting point about dev mining, but it is very difficult to avoid conflicts of interest if you are able to know when key events are happening. I'm not sure Devs should mine in a fair system, past keeping the network going.

For example you might get in touch with the owner of your main pool to have his service go down at a critical moment so you can take advantage of, for example, a marked difficulty reduction - all sorts of stuff like this can and does happen

Definitely also a valid point about market abuse from @spartak_t

What I meant was that "Nothing at all" sounds like people want developers to work for free. I am not all against ICO's, because I see nothing wrong with "funding some brains", but far too many scams happened. If a developer has funds and want to invest them in his coin, then it's good. He can then rent miners and mine as much as he can. Premine doesn't work very well nowadays. Majority of the people do care only about Bitcoin and few others. Try gather a team funded with the premine (without selling it for BTC). Believe me. it is extremely hard.

Tell me about it!

Carboncoin has been running for 2 years and self funded, we also had to do a community takeover when the original developer disappeared in questionable circumstances...

We're just working on a new feature which will prevent our future helpers from exchanging their rewards straight away, and i'm also considering implementing a staking reward for a little while to give people some incentive to accumulate coins.

Nothing like a bit of hard work :)

I went with over 2% because I have worked on enough tech projects to know you need funding to continue dev.  Stressing about where the money is going to come from impedes development. Sometimes you need badly to hire coders for different parts in order to keep it moving.  Then branding...quality branding is expensive and this area must not be bypassed.

I will. I am part of the FailCommunity team, which supports FailCoin for more than 2 years as well. We are 12 people from 10 different countries. All of us are working for a specific % of the coin and as one of the Project leaders, I really know how hard it is. Especially to find honest people out there.

+1

One of the hardest things I've been though is watching people who believe in my project, and want to be a part of it, move on to a new thing because of not being able to get paid.

Carboncoin is certainly the last project I will be doing without raising money at the proof of concept stage because of that.

The decision not to jump into getting funding straight away was that we wanted to spread the coin out widely and fairly while it was at low value, and we've been relatively successful at that - but it has ended up costing much more in non monetary terms!

The lesson I learnt is if a system relies to much on honesty then it's probably not really suitable for humans :)

There's a really good documentary on netflix about it called "(dis)honesty" which I would very much recommend


At the heart of the Carboncoin are 8 who help regularly and many many more on stand by.

We've grown a community of about 500 people who have bought coins to hold on to since we started.

We've done our best to ensure that no one individual owns more than 2% apart from the charity which has just over 4%. That said, many have come and gone seeking short term gains to throw at the next pump. They don't do anyone any good.

A pleasure to make your acquaintance.

Well, it can actually work. I know the real identity of pretty much everybody (except the dev and three other guys, but I respect their choices, because everything they did so far was good). Everyone else I have on Facebook for example. 6 of us exposed ourselves here and tbh, it's easy thing to do once you have nothing to hide. Truth is that you just can't succeed without real "investors" (people outside your community who follow your work and "invest" in it). No matter how good are your intentions. :)

P.S. Btw the % of a currency you hold does not matter if you don't measure it in Bitcoin or fiat (i.e. you are looking at your coin only) and you are using it properly.

Pleasure to meet you too.

Cheers,
Spartak

bump. 

(Please click the links, as they are essential to understanding this post.)

This is a very important question.

This is a difficult question to answer, because developers need to be funded (https://bitcointalk.org/index.php?topic=1524286.msg15342314#msg15342314) if we expect any realistic chance of actually fixing our F.U.B.A.R. crypto ecosystem (https://bitcointalk.org/index.php?topic=1526067.msg15372924#msg15372924) within any rapid timeframe.

Also we'd like the developers to have a vested interest in improving the ecosystem. Ideally every token hodler would be a developer also, but that isn't realistic so we rely on developers.

Yet when the insiders control a significant portion of the tokens (and/or the tokens trade on a corrupt exchange (https://bitcointalk.org/index.php?topic=1413819.msg15372888#msg15372888)), the price and market cap can be manipulated in a way that transfers (https://bitcointalk.org/index.php?topic=1526730.msg15372116#msg15372116) all the gains to the insiders and leaves most of the speculators holding an empty bag at the end.

Ideally we'd prefer not to rely on trust, because trust is a honeypot (https://bitcointalk.org/index.php?topic=1516067.msg15368625#msg15368625) that attracts those who will break the trust. And thus trust replaces "the code is the law" with "politics is the law" (https://bitcointalk.org/index.php?topic=1520678.msg15335354#msg15335354).

There will exist no perfected solution. For example, Monero claims they launched what I define to be a "fair", competitively mined, free market distribution (https://bitcointalk.org/index.php?topic=1526067.msg15364822#msg15364822), but this just handed all their funding to utility companies because paying for electricity for mining is financially equivalent to paying for tokens (https://bitcointalk.org/index.php?topic=1526614.msg15365639#msg15365639) and/or to those who amassed economies-of-scale cost advantages (https://bitcointalk.org/index.php?topic=1483658.msg15343196#msg15343196) such as mining farms (even stolen cloud cloud computing accounts (https://bitcointalk.org/index.php?topic=1520691.msg15344231#msg15344231)) with cheap (even stolen) electricity. Thus proof-of-work launches are not trustless either, and they throw all the funding into the garbage can.

I plan to offer a fair, competitively priced, free market (https://bitcointalk.org/index.php?topic=1526067.msg15364822#msg15364822) alternative to aforementioned disadvantages of an ICO or proof-of-work launch, which can fund the developer while mathematically placing an upper bound of the percent of the launch tokens the developer can possibly own. While this can't guarantee that the percentage is less than 2% (more realistic guarantees are 10 - 20%) of the launch money supply, it can guarantee (under reasonable assumptions) that the percentage is less than 2% of the long-term money supply (assuming there is an ongoing tail distribution block reward). So while this can't entirely eliminate the possibility of the insiders owning enough coins to do some short-term manipulation to drive the price and market cap higher, it does at least provide some reasonable bounds. And the advantage is the developers are funded. So my conceptual innovation, will offer the speculator a choice to have a mathematically bounded balance between trust and trustless, with the advantage being the developers are funded. Note again, proof-of-work launches are not trustless either, and they throw all the funding into the garbage can.

I plan to use this new conceptual way to launch, to offer speculators to invest some small portion of their net worth in a project and developer(s) they feel will be good for the long-term development of our crypto ecosystem. A long-term holding for ideological reasons, not just monetary return on investment but also ideological accomplishment return on investment. Note again, proof-of-work launches are not trustless either, and they throw all the funding into the garbage can.

If you read my threads, you will know I am against trust and politics of trust (https://bitcointalk.org/index.php?topic=1526067.0) (being I am a minanarchist leaning full blown anarchist). I would prefer a launch that has no trust, but I can't think of a way to fund development without any trust whatsoever. But at least the produced token software will be a trustless protocol. So some trust and some leadership is necessary to produce the trustless end. The end justifies the means.

Perfection is for incapable dreamers who handicapped themselves with their perfectionist delusion. The real world requires a balancing act. Let's get the balance right (https://www.youtube.com/watch?v=XWK7QLvuI-I).

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Thank you for taking the time on this. I think you are spot on, have messaged hoping for a further discussion

It depends?

1. What are the developer's credentials? (education, experience, past projects, etc.)
1a. Is the developer anonymous?
2. How long and how hard will you dedicate yourself to the project? (6 months means nothing. You need to specify whether it is 5 hours per week for 6 months or 40+ hours per week for 6 months)
2a. You need to provide some way for shareholders to audit that you are spending that much time on the project, and give shareholders the ability to approve coin distribution in portions (for example- 1 portion per month worked.)
3. Is your idea/vision for the cryptocurrency valuable? Will it fill a niche, solve a problem, have competition, be the 2nd (or 3rd, or 4th, etc) to market, be valuable if developed as planned, be possible to develop?

Some people will adamantly say 0%.

Others (me including) will judge cryptocurrencies on a case-by-case scenario using some arbitrary combination of the parameters I listed above (and others, as that list is incomplete).

It is how the coins are used by the dev that counts far more than the % retained.
With a full ledger with detailed costings then there is no issue with the development team having 50% in theory.
I mean if you know exactly to the cent how the coins were liquidated and used for the development then it is still fair.
There should be milestones and detailed costing plans put forth before release. Measures put in place to ensure those are met.
In this case the coins are simply distributed via exchanges and development costs are covered as you go. The more development the more it costs and hopefully the more advanced and desirable the currency becomes.
The original dev team should put forth a detailed costing plan with milestones the large development pot is then released over time to them as is set forth in the plan.



What is more important is where the coins that are not kept by the dev team go . Mining with a fair release protocol is the best way to ensure they are disbursed equally. Or a fully transparent ICO with board user names listed. There is no real 100% fair way to ensure non dev pot coins are distributed fairly but with a bit of analysis you can either puppet accounts have to work harder or some accounts are struck off from having the right to buy in. With a largely advertised pow launch with pools at the start and fast increasing diff it is hard for single entities to grab up vastly unfair swathes of gpu mined coins. Even if they do they are having to expend energy at the same rate as everyone else albeit at different energy costs. Then again they have had to buy the hardware at similar rates to everyone else. That's about as fair as you can ensure.

Huge % grabbed that are not accounted for and monitored can be used for market manipulation. This is what you do not want.

The currency should be valued upon its merits and desirability/functionality.

Development costs time and money. There is no problem paying for that at a reasonable rate.
The development pot is there to reward reasonably the devs for producing something very useful. If they do then they should be paid very well but it should not be a guarantee to making a fortune even when producing nothing or something of low value.

The problem with it at the moment is that devs are in a win win position. They need to be put in a win if they produce something of worth and risk of not getting paid out if milestones are not reached position.

Would you mind telling me what the above might be worth to you in terms of market capitalisation as an estimate?

If you were going to do an ICO what proportion would you sell and for how much?

Would an incorporated development company behind the protocol be of interest to you over and above an ICO?

I think Carboncoin have hit the nail on the head with regard to distribution and incentive - an awesome model, well done Axis

It seems that so far despite the nothing at all camp in the lead there are more votes in the top two categories combined so 1.5% and over.

Leaving voting open

Great engagement and feedback so far

It's fair for the dev to hold as many coins as he can buy or mine but he sholdn't be his own largest investor. The poll is useless.

That's a useful statement and one which certainly applies in my case. The poll is about premine in the context of reward for developer - so you are saying that you are in the nothing at all camp but with the developer having free license to purchase and mine as he wishes

Do you not think that this raises potential conflicts of interest?

For my project which I have worked on for two years I have capped myself and those who have bought coins from me at 2%. Incidentally myself and the existing community had no access to any premine.

Are you saying that as long as there is someone with more coins than the me the amount should be uncapped e.g. you'd be comfortable investing in a coin if, say, one other person owned 12% and the dev owned 10%?

I say this believing that in cryptocurrencies the primary mechanism for value appreciation is the network effect, and I see large holders impeding this. Very interested to hear contrasting views!

Yes, zero premine. If he needs aditional funding he should use devcoin example and get small payout per block.

Conflict of interest is a problem but if he doesn't hold his own coin he also has no incentive to make it great. It's best for him to make his holdings public on the chain and also tell people his plan of purchase and selling. If he is following a longterm predefined buy and sellshedule i don't see an issue. He should hold his coins for longterm and not engage in daily tradingactivities. His coins are a commodity for him to reap reward of his work.

Maybe corret that a little: he shouldn't be among his 10 largest invests, maybe 20 even. So him being his second largest investor is still a bit too much imo. But somewhere on 20th or 30th spot should be perfectly fine. I think a dev holding 2% or 3% of his coin that he mined or bought and is holding public and not daily trading is ok.

Dev holdings and buy/sell shouldn't be a big topic actually. His default should be "hold". And only buy for hold longterm and only sell with weeks and months notice ahead and in small chunks - and never sell out completely.
Dev really shouldn't make more than 4 or 5 trades a year because he's a dev and not a trader.

Yep, no one's getting my 2% from me! It's clear I should publish my distribution acheivements - about 70% of the total circ is in the hands of people in it for the long term already, with none of those owning more than 2%

Thank you for your input!

First, I would work out what you would like to be compensated for work already done. Then, make a road map and budget for future development. Publish this to the public and get their feedback, and tweak if it is found to be unacceptable.

These amounts should be in a stable currency like USD. There is no way of telling how much your coin may be worth before it launches, or how much any other coin will be worth in X amount of time, so it is impossible to say whether 1%, 5%, 10%, etc. of the total money supply would be acceptable or not.

All future work should be paid in increments among reaching milestones. You should only be paid immediately for work/services already rendered.

I suggest allocating a percentage of each block (and/or the ICO distribution) to development, then allowing stakeholders to vote on development proposals. I really like the way Decred and Bitshares handle shareholder voting to allocate development funds and future development. You should look into setting up something similar for your coin. Cryptocurrencies that rely on donations for development are dead ends, because hardly anyone willingly donates to development funds, and this is a very fast paced industry. Cryptocurrencies need to evolve or die.

people keep saying the dev shoulnd have coins... wtf?
he/she is the main developer, working to make it real and he/she can even have some? lol

as long as it is a small percent (1~2%) i wouldnt care. that only change in those scam ico with lots of bitcoins in donations. in that case, dev already have funds to develop so no premine for him.

Where is 0.000001-0.1% ?

Lots option already mentioned: 100% could also be a good thing. If you seriously have a good idea for some business, you shouldnt put it up for grabs in the first place.

Every Dev these days give themselves huge cuts of the coins which means huge profits even if the coin isnt that successful . In my opinion more often than not this can be the death of a coin due to dev having massive dumping power, when they know they can get so much money out of their coin they dont care if they cause it to collapse since they have their profits. Bitcoin is not so bad because we are at thge stage where the founders coins are irrelevant more or less but not so with many altcoins.