Hey folks, I'd like to share some thoughts with you and get an opinion about them.
So far, we have established that XCN is a highly innovative coin because it introduces the prune-able mini-blockchain and the accounts DB.
Therefore, for the first time in history it is now possible to keep the required amount of data for a scalable crypto-currency proportional to its actual usage, preventing unlimited growth of the blockchain to all eternity.
That's good!
What is still not-so-good is the fact that even XCN still relies on mining - a wasteful game of high-speed lottery. There are some promising approaches out there to improve this concept:
1. make computers do useful stuff instead (Ethereum) and create a big cloud-based supercomputer. Great. But as a result the primary focus of the coin has shifted away from the use as a currency towards the application and payment system of that super computer. And what we're actually all looking for is THAT new, perfect and stable money we can use all over the world.
2. Replace mining's proof-of-work by a proof-of-stake algorithm. Which is nothing else than paying interest based on account balance.
Both approaches have one common disadvantage: They lead to money concentration, just like bitcoin does as well. After enough time there will be only a few, rich and powerful people left who control the whole ecosystem. Just as we experience in the "real world" with FIAT money.
I would like to see a new coin, one that is actually USABLE as money and long-term stable because it's systematically built to be long-term stable. And here's where XCN is a great technological foundation because at least data-wise, it already is long-term stable and scalable. The only thing left to solve would be mining / transaction processing. I like the idea of paying participating nodes for processing transactions. That's just fair and is an intrinsic motivation to participate and keep the network alive. But instead of raw hashing power, what we ACTUALLY need for this is good network connectivity. Because the core action of validating a transaction doesn't require much processing power at all.
How about we build a mining algorithm that rewards nodes for "discovering" a new transaction and forwarding it to the other peers.
Let me explain:
Let's say computer A wants to send money to computer B. This new transaction now needs to be processed in the network. Computer C is the first direct link to computer A. That means C "discovers" the new transaction and forwards it to its peers. These peers are D, E, F. They all are now confirming and signing that transaction themselves and forwarding it until at the end of the round, the complete network knows about it and forges a new block for the blockchain together.
The rewards are now distributed as follows:
Computers A and B both PAY a transaction fee which they can set as they like, just like with bitcoin. The higher the fee, the more likely it is for that transaction to be included in the next block because of course the block size is limited and every other peer in the network wants to fill the new block with the most valuable transactions.
So Computer C suggests it to be in that new block and signs it as the first. Next ones are D, E and F, also all signing the signature of C. Therefore, they are now "tier 2" signers which entitles them to a smaller share of the reward. And so on, until the complete network has signed the transaction as is creating the new block.
This way, the incentive would suddenly be to place your mining rig in a remote location of the world to create good, reliable network coverage (to be able to receive and sign as many transactions as possible AND to be the first one to sign them) while rewarding everybody evenly without the need for expensive mining rigs and high power bills. In the beginning, the rewards would be mined, just as with bitcoin and later on the transaction fees would take over.
With this approach, every wallet out there could also be a miner at the same time, simply because it doesn't cost any resources, except for a little network traffic - which is the ACTUALLY valuable resource on the internet. We would have to solve issues like one node running multiple wallets at the same time to increase its income unproportionally. But that's easy as it could all be e.g. IP address based (the only other actually scarce resource on the internet: unique addresses).
and for money concentration: We should also look into some concepts of encouraging spending the money, like continuous deprivation for example. All goods loose value over time - it would only make sense for money to do the same. How much is for us all to decide - I'm feeling it shouldn't be too much. But it should be noticeable over ~5 years. This would have many advantages, of which one is that "lost" wallets would over time be emptied and the money is fed back into the ecosystem (and can also be used to pay mining!).
This, together with the mini-blockchain would be what I imagine to be the first, actually usable new money out there.
All of this is only some rough ideas I had during a long drive through the countryside recently and the details still need to be sussed out. But what do you guys think?
At least for me, personally, the whole cryptocoin movement is a quest for finding the perfect money of the future and therefore I think we need to focus on developing it systematically right - altough I don't mind making some profit from mining other alt-coins along the way
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