Bitcoin Forum

WARNING - This is a wall of text. You have to read it. Sorry. - WARNING

So many of these altcoins, even the ones I'm rooting for, have bits and pieces of what I think an ideal cryptocurrency should have, but none of them have it all.

Now, this announcement isn't really an announcement, its a request. If you want to add to this decentralized value system, please post, then I'll edit the OP, and then maybe some of these magic hacker wizards can breathe life into the machine; give the idea form.

Some of these details are probably difficult to code. I apologize for blue skying here, but hey. Why not?

So this is not a coin you can mine, then go pump and dump on your favourite exchange. So if that’s your hopes, please, don't fill this board with nonsense.

Oh yeah, first off, its proof of work. POS = fat cat to me.

First component: Privacy. This coin will be based on cryptonote, with a hard-coded minimum mixin level. There are various reasons for privacy on the blockchain, I won't go into them here – the monero thread has all you need.

Second component: Egalitarian distribution. This has many components.

1. Early adopters should not benefit from simply getting on board before everyone else. If you disagree, then cryptocurrencies are simply a get rich quick scheme for you, and you can stop reading. Granted, this concept of coinage of value in return for running the system is a good one, so block rewards will still exist. However, the distribution curve will be inverted, similar to Pebblecoin

Block reward stage A = 300 DVS (pronounced, div ees)
This will be reached by year 20 (or some TBD year). Starting at year 0, the block reward will be 1. Linear increase to 300 over those X years.

2. All workers in the network should be rewarded for contributing hash-rate, and full nodes should be rewarded.

Smart Block reward distribution - the entire network is treated as one pool. Therefore, if you're mining, you'll get your hash-rate equivalent of DVS every block. (Might need to do something about dust)

Smart network monitoring – if a single node obtains significant hashing power, the network throttles that node. This might be achievable by forcing the wallet and daemon to always run simultaneously, and the wallet auto refreshes, the wallet can the keep tabs on amount of deposit. Integrity of system can be performed by the wallet+daemon package running a periodic SHA256 hash on the actual program file. Is this possible? I dunno. If integrity is flawed, program aborts.

Re: POW algorithm – undecided. Cryptonight is good, and I like the concept behind boulderhash in Pebblecoin (requires 13 gigs of ram). Cryptonight seems ASIC resistant but is not botnet resistant, boulderhash  can still allow for centralization (servers). Perhaps something like myriad coin.

The-whole-network-is-a-pool design is a disincentive to run only a miner. This will increase # of full nodes.

3. Longterm, non-myopic, future-proof design – a decentralized value storage system should be designed to last 100s of years. We're trying to build a system that can launch us into a new era of civilization here, folks – lets make something for the civilization we want to exist – or whatever it is thats beyond civilization (getting all Daniel Quinn on yah, break out your Ishmael!)

One that persists!

Some components that will facilitate this.

Dynamic block rewards. For the sake of simplicity, Phase B will be 5 years of of constant block rewards (300) . In phase C, the block rewards will be dynamic. That is, the network will monitor its own activity and adjust block rewards accordingly, say over a rolling 5 year average. So starting on year 26, the network will take the average of the past 5 years and adjust the block reward.

Now, how do we adjust the block reward. This is where I think I might lose some hardcore bitcoiners, because I can't grasp a purely deflationary value system. On the other hand, I don't agree with a dropping money from helicopters inflationary system either. Ultimately, my working hypothesis is that if we hard code in certain parameters that are a balance between these two extremes, this will provide stability to society because the “monetary policies” are no longer policies – they are rules of a system. No single cohort of humans can change them. We are creating a natural system.

So, with this in mind, the system would decrease the block reward during times of high economic activity, and increase block reward during times of low ecnomic activity. But this would be a slow, incremental change, that would float over years. In reality, if we started at 300, the moving-frame average would probably deviate so minimally that it may have the intended effect on economic activity (either increasing the incentive to spend during inflationary periods, or increasing the incentive to save during deflationary periods), and have reduced side effects (devaluation of the currency during inflationary periods, and increased hoarding during deflationary times).

And it would be automatic and trustless – there'd be no more “well, is the fed gonna change the rate? I dunno”. People could make projections based on knowledge of how the algorithm works.

I'm no economist, but in theory I see it as this – if society is doing fine, there's enough value, represented by the money supply. (because money is kind of the value of working together). Thus, during times of high economic activity (a lot of DVS network activity, lots of transactions), new value does not need to be minted. Plus, the increased network activity has inherent value distribution due to all the transaction fees going out to everyone!

However, in times of low economic activity, low transaction frequency indicates that society is going through a devaluation phase (for whatever reason) – on top of the fact that currency is not being distributed because there's no mining fees. Thus, block reward increases to counteract this.

Hrm... I think I had other things, but its late.

Ah yes – why this makes sense somewhat.

I'm fantasizing here, but I doubt that gold, as a currency back in the day, worked as such: One guy, or small group of guys, find a huge mine of gold. They then are able to get boatloads of gold out of that mine immediately. Over a short course of time, other people go "hey, that gold is cool! i want some"

No, gold probably went more along the lines of: people randomly find gold, slowly - 100s of years. Over time, people get better at finding gold and extracting it from the ground, so there's more of it.

Compare that to current cryptocurrency systems – huge block rewards to start off with, that decrease with time, as the equipment to “mine” them advances, it essentially makes it more difficult to find them.


???

 

Cryptonight is dead algo...

I've modified the OP to warn people that its a wall of text.

Sounds very interesting. I'm definitely going to enjoy watching this evolve.

I'm curious why you think this.