Bitcoin Forum

Update - after 1 year, nobody sent any bounties at all except my initial 1 BTC.
I have decided to sent this 1 BTC to SunnyKing for his innovation in creating PPCoin, and close this bounty pool.


This is a bounty-collecting thread for the first alt-coin to support some "good" form of Proof of Stake (https://en.bitcoin.it/wiki/Proof_of_Stake).

Rules:

1. The coin should either be based on Bitcoin or Litecoin (scrypt), with an addition of Proof Of Stake. No other fancy changes, just PoS.
2. The coin must combine Proof of Work with Proof of Stake.
3. Different PoS methods from the wiki (or others) should be evaluated, and the "best" one chosen. I currently favor Meni's version simply because I trust him, but I haven't done the technical evaluation myself ... if convincing arguments can be made for another implementation, that's acceptable.
4. The coin should be fair. The definition of "Fair" is subjective, so I will just use my definition of "Fair" (I'm leaving the exact definition unspecified a.t.m).
5. The coin must abide by the Alt-Chain Release RFC (https://en.bitcoin.it/wiki/Alt-chain_release_RFC). TL;DR - don't premine, make it open source, announce it in advance. Read the RFC.
6. I am nominating myself as the bounty collector. (the gist of) these terms apply (https://bitcointalk.org/index.php?topic=93606.msg1063576#msg1063576). If you disagree, you may nominate another bounty collector.
7. This is the bounty address: 19k9uxrye1kj2UdS5xH3eMBV5RjDxLiRig (http://blockchain.info/address/19k9uxrye1kj2UdS5xH3eMBV5RjDxLiRig)
8. Donated 1 BTC.

Edit 1
9. This can be implemented as a fork or not. Added a requirement that 0.01% of Bitcoin hash power starts using this modified client, regardless of whether if it's a fork or not. For Litecoin, 1% is required.

Why a new coin? PoS requires no block chain or network protocol changes. Or rather, it is a proper superset of the current protocol rules that includes new rules for choosing checkpoint blocks.

Why not implement PoS directly on top of Bitcoin (or Litecoin) with a modified client?

Are you sure about that (http://bitcoin.stackexchange.com/questions/4320/is-proof-of-stake-a-hard-fork)?

P.S.

If PoS is implemented in an existing cryptocoin, that counts.

I appreciate the initiative but I think it's a bit premature for this.

Threads can wait for a long time, and addresses can collect coins.
Even if it takes a year to get there...

Technically the bounty conditions mean that if not claimed in a year, the coins will be donated to another bitcoin project ... but if I see more interest in a year I'll consider postponing the deadline.

Some principal questions:
If the amount of the coins I hoard increases my income, why would I ever spend them?
If I need to acquire coins in order to get income why would I bother with the currency in the first place?

While there may or may not be valid reason to do this for security it is absolutely senseless from an economical perspective.

Look at it this way: If you want to generate StakeCoin, you can do one of several things:

1. You can buy some, and invest them (e.g. lend them for X% weekly interest).
2. You can buy and run mining rigs, and pay for electricity, cooling and operation.
3. You can buy some coins, and "lock them into the blockchain". This helps the network security, and as a reward, you get to generate new coins.

Why is option 3 so bad, compared to 1 and 2?
This option enabled people to participate in "the mining game" directly, while in other coins you have to either

A) Dedicate large quantities of your time to understand how mining works, download miners, optimize hardware, etc... this is for specialists, normal people won't do it.
B) Mine-by-proxy - you can buy mining bonds ... but then you're trusting a 3rd party, who might be corrupt/corruptible.

StakeCoin is about allowing every "common Joe" to mine-by-proxy ... without a proxy.

Yes. In a sense this is less disruptive than P2SH, since it doesn't involve a backwards-incompatible change to the interpretation of the block chain structure. It's essentially an overlay network on top of bitcoin for negotiating checkpoints (I'm assuming we're talking about Mini's proposal).

There will be a hard-fork as soon as there is disagreement over a block, however. You'd better have near-unanimous mining pool support before you turn it on...

EDIT: Your SE question is a misquote of me. PoS does require a hard-fork no matter how you slice it, but that's simply due to PoS working as advertised, not because of a change to the blockchain structure. I simply maintain that it would be a diversion to create an alt coin specifically for this purpose, when it could be developed as a patch against the mainline clients of Bitcoin or Litecoin (or Freicoin), and tried out on their test nets.

Hmm.
I'm unsure what is the correct way to proceed. If 0.01% of Bitcoin hash power starts using this modified client, I'll accept the bounty (added to OP), regardless of whether if it's an altchain or not. For Litecoin, 1% is required.

I can't see how that is related to the issues I brought up. I recognize some people want a mechanism which enables them the charging of interest. But I consider interest a harmful concept in a limited base. Worse the concept does amplify the early adopter advantage issue. Those with many coins will get even more, to the point where joining isn't simply worth it anymore for latecomers.

I would even consider the idea itself harmful btw, but I don't wanna derail the thread.

I'm not sure what relation, if any, that has to do with proof-of-stake. Could you elaborate?

Proof-of-stake is a mechanism for negotiating checkpoints weighted by bitcoin balances. Checkpoints are way of mitigating attacks on the network and have nothing to do with income.

It doesn't really matter where the income is coming from, if it is anything which can be expressed as compound interest it is bad IMO.

What compound interest?

The more stakecoin you have the higher the reward the more you accumulate the more stakecoin you have, etc...

Stakeholders are not rewarded with coins, just the ability to select checkpoints. I recommend reading the wiki page on the subject: https://en.bitcoin.it/wiki/Proof_of_Stake (https://en.bitcoin.it/wiki/Proof_of_Stake).

The dumbest theory I ever saw: Trust the rich to protect the network.

From the guy who said litecoin was irrelevant. So irrelevant that 2 exchanges are going up in response to the btc-e hack.

The rich are rich because of their connections and backroom deals not because of their holdings.

NO FEDERAL RESERVE (trusted nodes) IN THE CRYPTOCOIN WORLD!

Go away scammers.

You kind of sound like an OWS protestor.


Well, one could make the argument that most of the plutocracy in place today has root in the Rothschilds/gold moneylending industry that eventually turned into central banking. That happened because a super scarce resource (gold) was easily controlled.

Who knows how different the world could be today if money was honest. Bitcoin is not honest money and would likely follow the same path as gold were it to become a significant force in the world.


If you have honest money, the wealth of the world will be distributed far more equally than it is today. Perhaps we will lose some of our pettiness if that ever becomes the case.

1. I don't consider interest harmful. There will always be an incentive for people for lend their coins for interest, rather the storing them under the mattress, regardless of protocol rules. It's just the way the world works.


This is true in Bitcoin, Litecoin, Gold, Foocoin. The richer you are, the richer you'll get, and no cryptocurrency is going to change that. DemurageCoin is not a viable solution. So ... there's no use complaining about it. If in StakeCoin this is part of the protocol, then that's fine. The amount of interest, however, shouldn't be a hard-coded number, but rather negotiable by the market somehow - not sure how to design that exactly.

You don't "need to acquire coins in order to get income" - you can sell goods & services to get an income, you can have your employer pay you salary in this coin, there are plenty of other ways to get the income.

The wiki is just the start of the discussion.

I don't have time to re-read it now, but I believe StakeCoin should have some incentive for coin owners that participate in the signing process, much like miners are incentivized.

It needs some kind of incentive to get people to sign the checkpoints.

PoS is better than relying on one developer to lock the chain.

+1

The incentive is: it keeps their (bit|lite)coins from becoming worthless. When you have or control a significant portion of the total supply of coins, that is no small incentive.

You mean Steak Coin Bounty. Do you think they let you pay for your BBC with Steak Coins?? Let me bring the Beer Coin™ (The coin you wanna drink!™) and get this BBC started!

This is a fair point, however it doesn't allow the masses to participate. Therefore for all practical purposes, one tyrant or a few oligarchs results in the same situation. At least you can talk to a tyrant. Oligarchs are paranoid fucks who need to be spoonfed incentives.


The checkpoints also affect low stakeholders. In an effort to gain more control, high stakeholders can pay for attacks (including psychological) which create chain forks that send money from low stakeholders to them.
Incentivism is a futile exercise in trying to motivate the lazy. There's an undercurrent in the bitcoin and litecoin communities that will throw off the dead weight of fat wankers who need an incentive to tie their own shoes never mind create.

So far those proposing proof-of-stake have failed a simple test:
I haven't heard of one proposal that allows pools of peasants to be stake miners. Effectively these would function as cryptocities as there would be an incentive to keep cryptocoins within communities. This would create feedback loops and self-propelled microeconomies.

It was a simple extension that never crossed anyone's mind. Fail.

Failing this simple test does not give me confidence in proof-of-stake models. The people looking to add this feature are still thinking in terms of maintaining value rather than creating value. You guys are not thinking forward and it scares me to death.

There's a thread here that is going to cover the whole gamut of proof types that could make cryptocurrencies work.
http://litecoinforums.org/index.php?/topic/22-cartel-wars/ (http://litecoinforums.org/index.php?/topic/22-cartel-wars/)

If you control 1% of the coins, you can still rely on the other 99% to work towards "keeping your coins from becoming worthless", so you yourself don't have a direct incentive.

I don't understand what's the big difference between hashing power and financial power. They're convertible and therefore ultimately equivalent.

StakeCoin is a way to reduce the friction of this conversion and decentralize the network.

From the wiki (myths):

Gotta love people who quote the wiki written by and for bitcoin sycophants is used to make an argument.

Thanks! :)

I'm not talking about fairness. I'm talking about proof-of-stake that includes everyone who pulls an equal amount of weight. There's no difference between premining and early adopters building bunkers. One versus a few still leaves many in a second class category. If you think you can push special tier privileges and expect ppl to go along with it, you're delusional. If you think there's nobody who can repeat the success of bitcoin, you're blind.

Define "pulls an equal amount of weight".
If a coin release schedule is fair, then everyone will have ample time to contemplate, design and debate it before it's released. So no unfair "early adopters".

Early Adopters of successful coins are rewarded for discovery the fact the coin is good. If it weren't for them, the coin wouldn't have started at all, by definition, so they deserve a reward.

Early Adopters of shit coins are "punished" because their investments plummet down the drain.

There is no special tier in StakeCoin, no thresholds. Everyone can participate, big or small.

I think the success of Bitcoin will be unmatched me for many, many years ... it is too revolutionary. This kind of idea doesn't come by every year. There might be improvements (StakeCoin might be one of them), but the basic principles will remain the same.

Sorry, but the UtopiaCoin you'd like to see just can't exist in this world.

That's funny because so far every proof-of-stake proposal I've seen says "Minimum X (large) coins and peasants get to fill out napkin size complaint form".

I'm not sure why you have your panties in such a bunch over proof of stake. The bitcoin protocol and ergo litecoin are not very friendly to decentralization on a massive scale. The design is to already make the many in a second-class category. The moneylenders and the debtors. It will be the same scenario all over again.


LOL @ "coin release schedule"

"I will let you have coins when I SAY you can have coins!"

A closed monetary system is such a joke.

coin release schedule = the schedule at which the new alt chain is released.
This is composed of designing the new alt, asking for comments, releasing a testnet version, and finally releasing the real blockchain.

This has nothing to do with the rate of coin generation.

Stop trolling, please.

Oh well it's hard to understand what you mean sometimes. You say a lot of things without understanding what you say, so forgive me for being confused.

For example


So you propose that every account with a satoshi in it gets to sign the block chain, right? Do you have any idea how much bandwidth and data that would take? Do you realize miners will just drop these signatures anyway? Perhaps you should sit on the sidelines and let the big boys talk about these kinds of changes. You should stick to quoting the wiki where someone has spent time actually making up a bullshit argument for you.

Welcome to my ignore list.

There are 2 proposals (see https://en.bitcoin.it/wiki/Proof_of_Stake, also linked in the OP) and none of them say anything about a minimum. The "minimum" that may be needed in practice is on the order of magnitude of dollars.

I think you might be confused with the SolidCoin system.

Well so far someone has actually suggested that the peasants would have "accountability and a feedback process" with regard to proof-of-stake.

So there's already the second tier meme in play even if not in the design.

Instead of PoW vs PoS, I would like to see something along the lines of rock/scissors/paper where three systems balance each other simultaneously. The third system would be reputation based. Call it a Proof of Merit rating. Merit is earned by accepting transactions. PoS outweighs PoW, PoW outweighs PoM, PoM outweighs PoS.

PoW includes transactions to gain Merit. Stake gives up liquidity (or possibly demurrage) to gain Merit, Merit takes time to build. Merit is spent to broadcast blocks.

Even if PoS gains monopoly power, it can be overturned if PoW gains enough Merit. If a PoW miner is successful in acquiring Merit, it can reduce power consumption and switch to PoM. There will need to be constant evaluation of the network to determine which strategy is most cost effective.

This is just a simple idea. Pay no attention. It's not that I like or dislike any system in and of itself, but only the fairness of the system. I still think PoW is better in the long run because technology will always keep increasing hashrate, but game theory suggests other strategies can be effective.

That would be a natural extension of proof-of-stake. Signatures in proof-of-stake are weighted by the number of coins they represent, but there's no reason another reputation-based weighting function can't be added on top of that.

That said, you'd have to find a way to deal with when the reputation evaluations don't agree.

I assumed PoS would be like mining where you need % of coins to fork the chain.

It'd be a hybrid of both. You'd need X% of coins (51% of the weighted signatures) to fork the chain, and 51% hash power to maintain that fork.

+1

Bump.

So, nobody except me has donated anything for this?

Maybe try adding a PPCoin address for donations? :)

-MarkM-

I actually still need to read PPCoin proposal and see what it's all about.

On the surface it doesn't obey rule #5 above (The coin must abide by the alt-coin RFC), but since the bounty collected so far is trivial, and the RFC is just something I made up, if PPCoin answers the rest of the conditions I'll award them the bounty.

If not, I will add a link to this thread to my sig.

PPCoin is not proof-of-stake, at least not as that term has come to be used. It has nothing in common with either existing PoS proposals--on the surface it resembles Cunicula's, but it's totally different in the details. It fails #3. (Given that it's centralized with a checkpointing super-node, I'd say it fails #1 and #4 too.)

IMHO, keep the bounty going, or at least wait. This proof-of-stake "solution" has not been community vetted. If anything, it's going to end up making proof-of-stake look bad when the coin collapses.

(Necrothread)


Update - after 1 year, nobody sent any bounties at all except my initial 1 BTC.
I have decided to sent this 1 BTC to SunnyKing for his innovation in creating PPCoin, and close this bounty pool.