It's not in master, I'm working on it with tewinget. Unfortunately, because of the way the code was originally written, it requires a massive refactor of the consensus code for block acceptance/storage/reorganization and so is going to take a little while.

https://github.com/tewinget/bitmonero/tree/blockchain

None of the current members of the core team had anything to do with the initial reference code or the cryptocurrency's inception.

Chain is going to be larger for this one, probably some 5-20x larger than that of Bitcoin's. That being said, that means maybe hundreds of GB at worst in a few years, which isn't an impossible tradeoff (for now) with privacy.

There are a lot of propositions for means to reduce the size of the blockchain, and we're reviewing them all carefully.

2-way peg will turn every current blockchain into a sidechain of Bitcoin and vice versa, and will enable totally decentralized trading. It'll be interesting to see what the regulators think of that.

Of course, anyone mining blocks is essentially already acting as a handler of money for a third party mining blocks too. The legacy banking system is really struggling with this.

We may simply softfork as we will likely go with a different solution than for Boolberry. However, there are other faulty components of cryptonote that will likely later require a hard fork.

This is similar to adaptive block sizing, which applies a penalty for generating blocks over the median size. The cost of the penalty is supposed to be mitigated by the value of the fees. My opinion is that this will not work well.

Such a mechanism doesn't work for this reason: miners generate their own blocks and include whatever tx they choose too, however the smaller the block, the less likely it is to ever be orphaned. If there was an overlay PoS network (like for MC2) you could try and enforce tx being included into blocks even at some level of reward penalty, but naturally miners will just include as many high fee transactions as possible without destroying any of their reward. Such a method of securing a blockchain is highly experimental and may not work for other incentives reasons (that's for the MC2 thread). As PoW stands now, miners are free to manipulate the transaction volume/fees volume in the network as they desire, and so subsidy penalties will not really work.

The quantity required is an open question, and it depends on the value of 1 XMR in 10 years time. If 1 XMR is $10k USD, then 0.1 could be very attractive. If it ends up at $10 USD, it will be very unattractive, but then the price of fees will be low so transacting on the network will be cheap and can be used to pay the miners if sufficient volume occurs. If the price of fees is high ($10k USD per 1 XMR), then a small subsidy like that will likely be essential in keeping the chain secure in my mind. Without a secure blockchain, the entire system will fall apart.

In regards to the second question, the other way to do so is FreiCoin's system, which over time destroys the balance of all accounts equally through demurrage. The FreiCoin devs insist that this is totally different from inflation, but I haven't been able to follow that argument (and it diverges into a lot of economics I'm not well versed in).

One thing we can do is make an official merged mined currency alongside Monero with exponential inflation, to provide a fiat-like adjunct that can one day be traded in a decentralized manner with a two-way peg.

That I'm not sure. Johnny Mnemonic proposed exponential inflation, which I think was ill received as a lot of people think it'll turn Monero into the next FreiCoin.

Debasement as above is non-perpetual; over time the inflation rate goes to zero slowly with a fixed subsidy. For instance, at year 11 annual inflation is 0.335774683775%, while at year 20 it is 0.325925311615%.

We're working on adding this feature now. We need to do a couple things to make it verifiable by any given person cryptographically (the wallet needs to support a view-only mode given view keys, and we need to sign key images from one-time use private keys if we spent with ring signatures to show that they were actually spent).

The issues are two-fold:
1) It seems unlikely that fees will properly secure the blockchain a long time into the future. There have been numerous comments from the core devs (eg Peter Todd) and academics at Microsoft about this.
2) Any blockchain that has logarithmic decay for subsidy will eventually face persistent and random deflation when coins are lost, causing wild speculatory price fluctuations.

Tiny inflation (0.1 XMR at year 10 as I have proposed) that tends to zero slowly as time goes on probably alleviates both, so I don't see why it's so controversial.

It refers to a well known privacy issue on CN coins. We've had a fix for this in the development for weeks now after corresponding with a Bitcoin core devs that should be more effective than the solution for Boolberry, we're just waiting until the core of the software is more mature before we roll it out.

I've been perpetually confused as to how the finite miniblockchain scheme can possibly be used to enforce data consensus in a byzantine generals problem-like network. I'd appreciate it if someone could ELI5 it to me.

There was no instamine;
http://monerochain.info/charts/coins

Instamine implies massive inflation in the beginning where a small group of individuals gets all the coins. Inflation is still so high that anyone is welcome to bring miners on the network and get paid large amounts of XMR.

This is a fun forum to post in, especially when everything seems dire to everyone.

My units will become unprofitable to run by November of 2014 at 15 cents/W at current levels of exponential hash rate growth.  They get about 1.2 W/GH/s, which isn't that inefficient.

If you're using more efficient hardware, you maybe have miners with 0.5 W/GH/s and electricity at 15 c/W. Your profitability ends in February 2015.

Best case, you have 0.5 W/GH/s and electricity at 5 c/W. Your profitability ends in May 2015.

The last time this happened, everyone started spelling gloom and doom for Bitcoin mining, that mining units would never return on fiat, etc etc, and the market bounced back and suddenly Bitcoin mining was once again profitable.

The other situation could be that hash rate growth will stop because it is unprofitable, and the difficulty with begin tanking, and everyone will start offloading mining hardware (which is what happened with GPUs in 2011-2012). This works if price falls or remains stable.

Yes, I've gotten two.

If all blocks were empty and the average block size was 350 bytes, that amounts to just 500 kb a day from blocks. If it were 2 min block time, that's 250 kb. That's not a big difference, and I don't think much to worry about.

The current daemon softfork limits the blocksize to ~192 KB to avoid propagation issues, which may be exacerbated when we move from in-memory DB to an actual database. Of course, miners may make larger blocks if the median allows for it, but it's very likely they'll be orphaned.

This gives us about 2x the theoretical bandwidth of Bitcoin. End of the day, I think what will happen is that fees will begin to dictate tx inclusion, and that tx via Monero will probably be more expensive than for Bitcoin (given unlikely equal adoption).

Softfork to mandatory minimum mixin of 3 will bloat the chain about 3-fold further, but as it currently stands this is not a huge issue.

I'm working with tewinget right now on the database, so it won't be that far off in the future.

Cool, thanks!

Flat 0.005 fee + small quantities to burn off dust in you use dust inputs

You still have to burn tx fees.

We have a fix coming for this in the near future (it's actually pretty easy), we just need to have some of the other components integrated first eg database.