From the Counterparty wiki we have the following description of BTC trades.

"Trading BTC on the distributed exchange

Suppose Sally makes an order to trade [asset] in exchange for BTC, and Alice makes an order to trade BTC in exchange for [asset]. Upon placing order1, Sally's account is immediately debited, as usual, and, once Alice has placed order2, it is matched with order1. However, her BTC is not debited from her account, and the protocol will not send her Sally's XCP until Alice sends her BTC using Counterparty's btcpay function. If Alice sends the BTC using btcpay in fewer than 10 blocks, the protocol will send her the XCP and thereby complete the transaction, otherwise, the trade expires, and the protocol will re-credit Sally's address with [give_asset]. "

The only fundamental difference between a trade of two CP assets and a trade of an asset and BTC (or IXC in our case) is that BTC is not escrowed.  But BTC trades ARE allowed.  The key difference is that the person holding BTC must do their send transaction FIRST (using btcpay) before the CP asset is sent to them.  Sending BTC first bypasses the problem of BTC not being escrowed.  A BTC trade is probably slower than a purely asset to asset trade, because at least one confirmation of the BTC transaction may be required (not sure how many confirmations CP requires) BEFORE the CP asset is sent to complete the trade.  Requiring BTC to be sent first rather than simultaneously doesn't really matter.  The end result is the same.  A trade is completed.  We should be able to do the same with bets using BTC (or IXC in our case).  There may need to be some tweeks of CP code to allow bets in the native currency, but it may not be too involved since it's already done in the trade algorithm.

The other important thing to note here is that btcpay appears to allow us to implement the complete Counterparty feature set (send/receive, trades, bets) WITHOUT changing any native code (no change to the native blockchain transactions validations).  The only drawback is that any trades with the native coin (IXC) requires perhaps 1-6 extra block confirmations to complete each trade.  If we can live with that the only change would be in the CP code, and hopefully minimal at that.

As I see it, IXC is the obvious de-facto standard coin for betting, ordering, etc.  It's just not a metacoin. 

If the proper IXC transaction validations are added natively to IXC and maybe a few other changes in Counterparty to recognize this, IXC can act just like "the" metacoin.  This would be the best of both worlds.  It removes the redudant metacoin which could potentially compete with IXC for popularity, and it all but ensures IXC as the common currency.  This should increase IXC transactions considerably.

I'd recommend we at least look at how much extra work it would be to actually implement the native IXC hooks needed to make this a complete solution.  That way a competing metacoin won't emerge as the common currency before IXC is well entrench in this role. 

@Friction

So with your planned implementation of Counterparty does it need modifications for us to use it, or is it pretty much going to be bolted on as is?  Maybe a few features disabled?

Yes, I see.  The metacoin does seem superfluous.  You don't need a metacoin intermediary to trade one CP asset for another CP asset.  Counterparty logic controls both assets directly, and can escrow both assets directly.  It doesn't need the metacoin to prevent someone from backing out of a trade.

Even with the IXC to CP asset trade you don't need the metacoin intermediary.  CP enforces the CP asset transaction and a future change to the IXC transaction logic could enforce the IXC transaction so no one can back out on a trade.

So why was the metacoin added to Counterparty?  Well you could conceivably "burn" the native coin to CP assets directly every time you need to (does CP allow direct burns to assets?), but the metacoin allows you to do a single burn then trade it for any other CP asset.  I guess it was more for convenience to provide a common currency so you don't need to keep burning.  The other obvious reason is that you can make a killing if you get in on the ground floor of a new crypto currency, so Counterparty created one just like everyone else.

Good info but you didn't answer my specific question.  As I think about it more I think we can implement Counterparty without their metacoin, and still allow orders without formal escrowing.

My guess is that Counterparty knew they couldn't rely on the Bitcoin developers to add the required transaction validations natively so they had to create their own metacoin to give them the control they needed. 

So for my question about orders it could work something like this.

Let's say a sell order for 5 IXC is placed to buy a CP asset.  The order gets recorded in the blockchain with the address of the 5 IXC for everyone to see.  Then the owner tries to send the 5 IXC to a new address.  Well, the miners need to confirm it first.  By adding checks for open orders before performing a send, the miners can cancel the open order if the address balance drops below 5 IXC.  Only then would they confirm the send.  Or they could just disallow the send all together.  Regardless, it's all enforceable natively. 

The problem Counterparty has doing this using Bitcoin is they can't add the order cancellation to Bitcoin transactions since they are not the Bitcoin devs.  They need the metacoin as an intermediary to give them the control they need.  They control the metacoin and its transaction rules, but not Bitcoin.

In our case our devs control both the IXC blockchain and the Counterparty implimentation.  So we can streamline Counterparty and remove the metacoin by moving any new transaction logic to the native blockchain validations.  It should work.

I wouldn't mind seeing coinjoin added, but definitely not this update.

@Friction

So no meta-coins?  Well if you can get it to work I suppose that would be fine. 

jamaer brought up a good point about orders.  How do you do orders without a meta-coin?  There is implied escrowing with orders to keep both sides honest.  What if someone submits an order with 5 IXC in their wallet, then moves the 5 IXC to another wallet before the order is filled?  Does the order just not occur?  Does it get canceled immediately when the 5 IXC gets moved?

How can we use Counterparty to increase the value of IXC if IXCP is not pegged to it?  Well for reasons mentioned above, I think pegging the two could actually have the opposite effect on IXC.  But, the true value of Counterparty to iXcoin is it essentially turns the iXcoin blockchain into a peer-to-peer exchange.  That in itself will increase the value of IXC for several reasons.  First, when someone wants to start a new Counterparty asset they must use IXC to do it.  There are not an infinite number of CP assets that can be created because there aren't an infinite number of IXC, so there will be competition for IXC to create new assets.  Second, all those people who have CP assets in the iXcoin blockchain will have a vested interest in ensuring iXcoin prospers.  I believe they will also have an inclination to buy iXcoin.  Third, the number of transactions in the IXC blockchain will increase tremendously as more new CP assets are created.  As transactions go up, so does miner interest.  More miners (or at least the retention of miners) mean a more secure blockchain and therefore more customers wanting to start new CP assets.  Other cryptos which are only cryptos and nothing else won’t be able to compete with iXcoin and all its other assets and functionality.  I know this is hard to quantify, but if you look at a crypto with a market cap of $1 million, and iXcoin with the same $1 million market cap plus $100 million in total CP assets which would you be more likely to invest in?  Which is undervalued?  Which is more likely to have the support to survive longer into the future?

I’m new to Counterparty so I may not have everything down, but let me throw out some ideas.

I also dislike the burn process as discussed so far because it destroys IXC, but I have a proposal which may solve the issue.  As background, we could allow burning of IXC into IXCP to be initiated by any holder of IXC at any time.  When the burn occurs X amount of IXC is transformed into Y amount of IXCP, the Counterparty metacoin.  The X amount of IXC is destroyed forever by burning to a non-existent iXcoin address.  Each burn of IXC to IXCP increases the supply of IXCP, which will trade independently from IXC with its own unique market price.  

However, this creates the problem that the 21 million IXC will eventually be exhausted.  To solve the problem, I propose we always increase the MAX_MONEY amount for iXcoin by the same X amount of IXC's which were destroyed during a burn.  By doing so we always maintain 21 million IXC maximum coins.  Since the new IXCP coins are independent from IXC they won't dilute IXC price regardless of how many IXCP are created over time.  (We don’t want a 1:1 price peg between IXC and IXCP because over years or decades there could be many more IXCP’s than IXC.  This could have the effect of diluting the value of IXC because the two coins become essentially one in the same, if price pegged, even though they are used in different ways.)

1.  iXcoin MAX_MONEY = [ (21 million IXC cap) + (total IXC destroyed (“burned”) by creating IXCP) ] * COIN.  MAX_MONEY will change over time, but we maintain the 21 million IXC cap.  (COIN is the number of satoshi's per IXC.)

2.  Block Reward.  When MAX_MONEY gets updated during a burn it automatically pushes forward the date when the block reward ends by the time it takes to replace the destroyed IXC.  In fact, the 96 coin block reward will return even years from now when a burn occurs even if only briefly.  This should be very welcome to miners who will benefit from additional block rewards without affecting the total 21 million IXC in circulation.  The person or persons who do the burn will be the only ones taking the risk of giving up IXC for a new asset.  It’s their choice, and it doesn’t place any risk on other IXC holders.

3.  IXC exchange value.  Long term the value of IXC should not get diluted by this process because the same 21 million cap remains in effect.  Short term there could be some deflationary affects if a very large burn occurs which removes a significant portion of IXC from circulation.  The entire conversion process to create IXCP can occur (I think) within ten minutes to an hour if it’s allowed to occur in a single transaction, but the “replacement” of IXC will only progress at a rate of 96 coins every ten minutes.    

4.  IXC burn cap.  If a potential IXC supply problem is anticipated by item 3, then a cap can be placed on the percentage of IXC which can be in replacement status at any given time.  Perhaps a cap of 1-5% of IXC in replacement status can be set to guarantee at least 95-99% of the 21 million IXC are always in circulation.  Once the 1-5% cap is reached, future burns must wait until IXC is replaced by the normal mining process.

In general, I don't think it's good to have anything that is not reversible.  Does burning take iXcoin away from being used for iXcoin transactions?  If so, that's not good, especially if it can't be reversed. 

I don't see how pegging the value of the metacoin to IXC would work.  Then the metacoin is not an independent entity.  I would avoid this.

I don't know much about Counter Party or Colored Coins and the built in fail-safes, but I wonder if we should install a cap on the number of, for example, different Colored Coins which can be created on top of iXcoin.  The cap could of course be increased if needed, but it would protect iXcoin from an exponential increase in Colored Coins, such as we've seen with crypto coins.  Such an explosion could all but choke iXcoin with all kinds of scam coins and threaten its own existence if iXcoin transactions can't be processed.  For that matter is there a way or is it even appropriate for the iXcoin community to filter scam coins from being created on top of iXcoin in the first place?  There are many questions like this we should probably be discussing before the upgrade gets released into the wild and we can no longer control it.  I'm all for these add on features, but we should probably think through how they will be implemented.

It's not necessarily true that the upgrade won't help price.  Adding Counter Party and/or Colored Coins will automatically bring more users into the iXcoin world.  New coins and other investments will depend on iXcoin for their very existence.  The groups who advertise their own iXcoin based creations will be indirectly advertising iXcoin.  It could become an huge marketing tool.  Just one very popular iXcoin based creation could increase iXcoin transactions many times over.

Using the iXcoin block explorer I notice over 50% of blocks now have mulitple transactions and fees paid to miners.  That's a promising development to encourage continued miner support even after the block reward ends.  Adding Counter Party and/or Colored Coins should increase transactions even more.

iXcoin is by no means dead.  It's just quietly building into a stable, dependable, massively secure crypto in its own right, and a great platform for add-on features!

Two ibex with horns locked to form an X. 

My votes.


Yes to add CIO of cex.io to ixcoin foundation board.  Eliminates ixcoin's greatest near term vulnerability.  Great idea!!!

ghash.io should update to 0.8.6 version ASAP and not wait for next update.  It's holding us back from moving to next update.  It's always important to have pools using similar versions, especially when I've read on this topic that their is still potential for ixcoin forking, even if remote.

Keep IXC on vircurex.  If every hacked exchange was taboo we couldn't trade anywhere.  The more exchanges the better in my book.  It adds liquidity, not reduces.  Many other exchanges would just file bankruptcy, but they are at least trying to give everyone their coins back.  (I do have frozen coins myself.)

Yes to counterparty in next ixcoin update.

Inflation vs. deflation?  While it's true deflationary crashes of the past have been quite devastating, I think the situation is a bit different with cryptocurrencies.  Deflation was so bad, i.e. the Great Depression, because the currency being deflated was the national currency.  A citizen's entire net worth was tied to it.  Houses, gold, stocks, bonds, commodities, food and everything else collapsed in value.  Even loans had to be paid back in currency worth more than when they were taken out, making them hard to repay.  Only those who held the currency itself saw a rise in value, but even that wasn't a sure thing.  Banks failed en masse so you could still see your hard currency vanish despite it rising in value. 

The difference with holding cryptocurrencies is they are not the currency of your country, at least not yet.  Your house and other possesions are most likely going to be tied to a different currency.  So a deflationary crypto isn't as likely to hurt a county's population as a whole, and any bad affects will be greatly blunted.  Even if you had a crypto national currency, there will most likely be other easy to get "foreign" cryptos to spread your assets across.  I mean who would be kraizi enough to put all their investment into one crypto.  Haha.  Lol.  Just messing with you Vlad.  The days of one currency per country may soon be gone. 

Going forward I think it will be more and more rare to have a single national currency where every citizen is locked in for life.  Cryptos have brought huge possibilities for providing choices and will act as life rafts during future economic crises.  A deflationary currency in this scenario is a good thing, and will be a great value store which millions will seek out to invest.  With that in mind my opion is we need deflationary cryptos.  That's what i like about ixcoin.  The inflationary ones are just following the out going trend.  Inflationary currences will ultimately devalue themselves into oblivion.  Just look at all the fiat currencies that have done so over the last 100 years, and there are many more to come.  Cryptos are not immune to this either.   It's so easy to just increase the max coin cap, and those who can resist will stand out in the croud and be rewarded.  I hope we can keep ixcoin true to its beginnings. Just my opinion.

If anyone has a significant amount of ixcoin it could very well be the pool owners.  Afterall, they've been mining for years.  If so they will have a big incentive to continue mining after the block reward ends, even if it takes some time for transactions to pick up.  Otherwise they may be the ones left holding the bag if the hash rate and price crater into oblivion.  So I don't think we can assume pools will drop ixcoin immediately.  Having said that, the ixcoin community should make an effort to increase its adoption because we won't get a free ride forever.  Probably the best approach would be to simply ask the pools what their plans are. 

I'm not too kraizi about adding inflation since it devalues the currency.  If we did I like a fixed number of coins, like 1 IXC per block which is only .25% per year, but the percentage decreases every year since there are more total coins.  Anything over 1% is way too much.  That's on the scale of fiat inflation rates.  But inflation of any kind should be an absolute last resort.  Just my opinion. 

iXcoin Dice!

Use iXcoin to play dice at http://ixc.altdice.net/
Enjoy!

Each bet produces two transactions in the blockchain.  One for the initial bet and another for the payout, even if you loose. Payouts are automatically sent back to your wallet.  altdice is great for increasing iXcoin transactions.  

You're right about merged mining being the ultimate goal for many of the long lived PoW cryptos, but I'm not sure it's a good idea to be pushing other coins to do this now.  MM is the key edge iXcoin has over other more popular coins.  I assume at some point someone will start a systematic purging of crap coins by using 51% attacks.  When that occurs iXcoin should be in a good position to resist, but even very popular coins may not be able to hold up.  So why give them forewarning if they aren't smart enough to figure that out for themselves.  iXcoin needs time to catch up on marketing itself, whereas most new coins go straight to pumping.  It's not a bad strategy because the pumped coins, if they are in it for the long haul, have the cash to pay for securing the block chain (MM) later.  iXcoin has taken the path of securing first at the expense of its coin price.  So it is slow to upgrade features and therefore vulnerable in the fast moving crypto market until its popularity rises.