Towards reducing the manufacturer and hardware trust of physical coins it occurred to me that you can easily and voluntarily create a non-block-chain-transferable bitcoin. Its a bit like partially destroying a coin (by spending it to an invalid address) where you create a coin that is not blockchain spendable (by bitcoins rules), but where you can still prove you half-own it, and can hence half-transfer it. Because you can half-transfer it, it can still be transferred outside of blockchain rules (eg offline or by a group of clients respecting these alternate rules). To summarize existing methods that coins can be sacrificed or made permanently non-transferable: spend the bitcoin to an invalid address, eg to the address 0, or H(digits of pi) or to an address formed from a public key of form H(random). Now back on topic, to create a coin that is partly spendable is analogous: a 2 of 2 signature with one invalid address. Or requiring hash preimage of 0, or digits of pi. (I mentioned the idea of having a multisig with one invalid address in the thread about fixed public key coins, also about physical coins, but I did not see this use case at that time.) Alternatively if the serial number were implemented as a demonstrably invalid optional second signing address added to a multisig, on each physical coin, probably tools could already index it; though invalid addresses are frowned on for frustrating compaction.
The partially-transferable coin means you have intentionally created a coin that can not be transferred on the blockchain but the physical ownership can still be demonstrated if you have an electronic coin like firmcoin ( https://bitcointalk.org/index.php?topic=232898.0 ). How does that help physical bitcoin security? Well it ensures that someone cannot empty a coin of its value undetectably by removing the SD card under the tamper evident sticker, or spending the private key where its hidden under a tamper evident sticker, or trusting the coin manufacturer that the coin is even in there in the first place. And relative to firmcoin (which allows coins to be unloaded and reloaded, but deletes the private key on unload, you no longer have to trust the manufacturer to do that as much, because even if they have the private key in unloaded state on their computer, they still cant spend it on the block chain). To double spend a coin the attacker would need an extra empty physical coin, or the manufacturer could put the same private key in multiple coins (or the user if the user loaded the private key). And whats more if multiple people think they own the same coin it can be somewhat obvious in that the coin is spent at locations too far apart to physically move in the time frame. (And this is a topic of another post, tracking that). If its permanently non-block-chain transferable that creates two non-intercheangeable bitcoins a physical coin that can not be unloaded, and an online bitcoin, and the only way to trade them is to swap them 1 for 1. You might also consider variants where the 2nd element is not invalid but heavily time-locked eg 1 year. To time-lock the person loading the coin would create a 1 year time-lock and put the time-lock private key in the physical coin. In this way anyone can validate the address and see it wouldnt have been possible to spend it yet. Or where the 2nd signature allowing online redemption can be spent but only in cooperation with a somewhat-trusted entity, or a quorum of entities or users (k of n of them.) Adam Do you think this idea could work for Mastercoin under the context of user issued redeemable cryptocurrencies? I will watch this. |
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I've spend the last few days working on updating my Mastercoin-wallet (running on OS X and Unix-like, windows is possible as well) to supported distributed exchange messages and gave it it's own topic. For those who want to help test things this would be a great opportunity. I intend to test it out later today. By the way you and JR should have a look at this paper: https://bitcointalk.org/index.php?topic=324106.msg3464105;boardseen#newIt seems highly relevant to Mastercoin. The particular concept which is most interesting in the paper is the concept " confidence chains". There are some good ideas in the paper and maybe some can benefit Mastercoin. I think it would be a wise if there were some bounty set aside to fund theoretical papers of high quality just for R&D purposes. There are a lot of researchers on Bitcointalk who might be able to contribute to that if not right now at some point in the future. |
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what do you think about ripple ? Do you think it's a competitor for mastercoin ?
I think that Ripple is a powerful idea that has been badly mismanaged, and yes, it competes with MSC. Their focus on Peter owes Paul owes Sam owes Jake debt chains causes their true killer features to get lost in the noise. Nobody cares about collapsing debt chains, but distributed exchange is incredibly important. Perhaps they have fixed this marketing snafu (I haven't checked lately). I also disagree with their XRP distribution model, and I am doubtful about the case for long-term appreciation of that currency. (Trivia: the MasterCoin giveaway thread was funded with MSC purchased with BTC I got for selling XRP I received from an early Ripple giveaway) Finally, I think their system is way too complex, not sufficiently decentralized, not sufficiently open source (this may have changed since last I looked), and not flexible enough for other cool things people want to do with distributed currencies. Other than that, I love Ripple.  You should check it again. Totally open-source since a month . I agree they are not good at communicating but their main aim is not bitcoin community but exchange platform like zipzap and future gateways. With more gateways and nodes the ripple network will be distributed enough to be fair and honest. New features are coming with "contracts". I don't think it's too complex, it can easily be integrated and someone could use a ripple wallet without even know about it. About flexibility I couldn't really tell I'm not competent enough to say. XRP distribution model is particular but you don't need xrp to use ripple network (mm ok actually you need less than 1$ to fund a wallet...). About long-term appreciation I think it may appreciate if the network find more gateways and plateforms that use ripple. Otherwise it may also disappear (just like bitcoin or mastercoin actually since there's not real economy backing them). I've been reading a lot about MSC, and my concern is that communication-wise we're repeating the same mistakes Ripple is blamed for in the quote above. Perhaps the concept is clear to everyone deeply involved, but I'm willing to bet there's heaps of people like me on the forum and Reddit who, even with their best efforts, just can't find a simple explanation about what MSC is, why do we need it and what are the practical, real-life use cases. How do we expect people to get excited about weekly newsletters if these basic things are not explained anywhere? Either MSC can't be explained in a simple way, in which case I'll become even more concerned about its feasibility, or people who truly get it are not trying hard enough to explain what's it about. As an example, I tried to find a ELI5 for Mastercoin. There's two requests for that I found ( here and here). To me neither explains much; they only demonstrate how bad the situation with common-sense introduction material is. If the mindset is that ELI5 request can be answered with a link to the whitepaper (read: technical system specifications) then we really, really need someone on board who understands communication. It was good to read that a PR company will start working with MSC. Perhaps that will solve this issue in a month or two. In the mean time I would like to hear do you people agree what I say about the lack of ELI5-like material, or haven't I just been able to find it? I have some posts with some thoughts on what a finished Mastercoin protocol could do. Honestly I think we need a series of videos just as there is with Bitcoin. Text can only explain so much. https://bitcointalk.org/index.php?topic=265488.msg3429661#msg3429661https://bitcointalk.org/index.php?topic=318610.msg3436731#msg3436731https://bitcointalk.org/index.php?topic=265488.msg3435101#msg3435101If you don't want to read all those different overly wordy use cases. The main categories of users will be traditional users and issuers. Traditional use cases:If you're a traditional user then you'll want to do stuff you already can do but in a decentralized way. Maybe you want to do decentralized betting. Maybe you want to trade Bitcoins for Litecoins on a decentralized exchange built into the Bitcoin blockchain. Maybe you want to buy crypto-equity/stocks or bonds without having to worry about whether or not Burnside will shut the site down. Issuers:If you're an issuer then perhaps you're a business owner and you're issuing virtual stocks. If you're an issuer you might offer bonds or somethings similar. Or you might offer your own currency, voucher, credits, backed by your goods and services or backed by another currency. So for example if you issue a currency you can back it by another issuers currency called goldcoins to back your currency by gold. This allows for redeemable cryptocurrencies and that is a game changer. Currently when people ask what Bitcoin is backed by we have to say it's not backed by anything. New currencies will actually be redeemable and backed by the goods and services of the issuer. This will provide long term stability. I hope my explanation was of some help but I know it probably does not help. A visual illustration is needed and this will mean videos showing how it all can work. |
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What are the rules for testing? I'd like to take part in that contest.
Well, you help out however you can, making sure to post what you are doing publicly. Then at the end of the contest, you summarize everything you did, and we split up the money among contestants based on the opinions of myself and the other contestants and devs about how valuable each person's work was to the project. More valuable = more money. It is subjective though, and payout is highly dependent on how many other people are helping out and how much they are doing. I've never seen anybody else do bounties this way, but it seemed to work pretty well for the last one we did. I think we might need a to-do list. Then I'll select something I can do from the list. If it's sending test transactions maybe I can do that when there are clearer rules and instructions on how to make decentralized transactions. |
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Maxmint - that looks like my sell offer--just haven't gotten around to completing the test purchase as work has been nuts. If you do happen to complete the purchase before reading this, I'll send back the btc.
Thanks, but no need to send back – it's just small amounts. Also, I wanna buy your shiny Test Mastercoins Haha- ok. We'll have the distinction of the first person to person exchange. I think we need to move this kind of discussion to a testing specific thread as I'm sure there will be much more and posting here might be to distracting. Hey guys, This testing looks like it probably qualifies for a payout from the coding contest. You don't have to post on the coding contest thread if you don't want to, but I know the devs appreciate seeing stuff like this separated out from the general discussion. The thread, for convenience: https://bitcointalk.org/index.php?topic=292628.0Thanks for testing!! I hope everybody is aware of what a huge payout we are offering for testing, code-reviewing, and bug reports. This contest alone has 100BTC reserved entirely for paying people who help with that. (For perspective, some very smart people in this community are running bitcoin projects which don't have that much in their entire budget! We're very fortunate in this regard.) I hope we'll see a lot more testers step in as we move forward with this. What are the rules for testing? I'd like to take part in that contest. |
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They are all nice but I prefer C.
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This is excellent news. If you can will you also translate opinions from China so that we who speak English can learn from it? I'm interested in knowing what the bright minds from China think about concepts such as the user currencies and how the technology may be developed in China. The United States has some excessively strict laws and that may be a problem early on which could make innovation difficult but I'm of the opinion that innovation and science should take priority and then a focus should be on changing the laws to reflect innovation and scientific progress. Scientific progress should guide the laws rather than the reverse. Again, many thanks for your contribution. 0.2 MSC has been sent to https://masterchest.info/lookupadd.aspx?address=1MengQjXcJJVHsrhMwqkJ2SCjsN6mprzoJ for reference. |
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That is the least of it. There are a whole range of side channels based on differential power analysis which 99% of all computers are vulnerable to which means the encryption keys to most peoples machines are vulnerable. There are DMA attacks, hardware based trojans, all which most everyone is vulnerable to. I think badbios just reveals that most people's machines are vulnerable to advanced persistent threats. Have a look at this: http://www.ma.rhul.ac.uk/static/techrep/2011/RHUL-MA-2011-07.pdfFor this reason if a government really wants your keys and they are determined enough to send some agents to target you specifically then its highly likely they will get them. But the point is that it is expensive and they wont do that to just anyone, at least not at this time. I'm not sure there is anything Armory can do about it, it's a hardware problem which can be solved by using hardware which blocks data emanations. I wonder if the new Trezor wallet will be vulnerable to differential power analysis? |
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Michael is a proven thought leader in the bitcoin space What the hell is a 'thought leader'? How does one distinguish a 'proven thought leader' from an 'unproven thought leader'? This is exactly the sort of crap that annoys me to no end. "If you are disrupting an existing industry by applying new Bitcoin technology..." 'disrupting' - the coolest overused buzzword of the year. This crap is all warm-fuzzy-gooey hype. It won't help attract brains. Brains don't respond to that sort of nonsense. Brains filter those silly cool buzzwords right out. However, as Terpin appears indeed to be close to bitcoin - and has a track record of similar hype projects, I guess he is well positioned to generate some good will. I like the notion that in 3 months if the board does not consider the result productive they can bail. Further, as JR has been won over by this proposal... I, as the project's biggest PR skeptic would concede to this arrangement being approved. If there is to be a committee to review the results - I'd like to be appointed to it. Someone with a bit of critical eye should carefully consider what kind of response this activity is generating. Max Keiser is a thought leader. A thought leader is someone a lot of people listen to and take advice from. It does make sense to invest in getting the support of thought leaders but it all depends on the price. $6000 a month is pretty darn steep and should produce results which are measurable. Some criticism: "One of "mastercoin"'s problems is you can never have thin clients/SPV clients, etc. Each client has to be able to process and index the entire 8GB bitcoin blockchain in order to not be fooled or double-spent. Another issue is that mastercoin is centrally controlled by one party, all issued by one public key they call the "exodus address". There are quite a few technical issues with the whole approach mastercoin takes and it doesn't look to be feasible. A more workable solution is presented by Freimarkets http://freico.in/docs/freimarkets-v0.0.1.pdf by long-time rippler Jorge Timon and Mark Friedenbach. Freimarkets will allow transitive "ripple" transactions, but it will be a fork from the bitcoin blockchain. For a practical colored-coin implementation that uses the bitcoin blockchain (any solution that does so must make certain sacrifices) but does not suffer the defects of mastercoin, see the "bitcoinx" project that Alex Mizrahi leads at http://www.bitcoinx.org/. BitcoinX also does not support ripple-style transactions." "Mastercoin is built as a layer on top of Bitcoin, so it doesn't have any specific transactions. Instead the upper level information is tucked into invalid inputs and outputs. Since it's riding Bitcoin, it has all the drawbacks of Bitcoin: creepy slow, limited bandwidth due to fixed block size, arbitrary high transaction fee, centralized with two or three ASIC makers holding most of the network power including two Chinese companies... And as a truly parasitic relationship it is going to harm a lot Bitcoin by spamming the blockchain and sucking all the bandwidth which will lead to further adjustments of the fees which will harm Mastercoin in turn... The absolute most stupid thing is that Mastercoin allows anyone to mint custom currencies. This is going to be a mega spam party... Mastercoin was built on top of Bitcoin because DaCoinMinster saw how alt coins are victim of ideological exclusion in the community and how Bitcoiners are inflexible fanatics. It's going to be a good learning for them. We all know that Bitcoin needs small transactions to move off-chain if we don't want shit to hit the fan in the near future when adoption rate takes off. But instead of that Mastercoin brings more in-chain bloat at a whole new scale. Mastercoin's success will be Bitcoin's Nemesis." This reads like complete propaganda. If the Colored Coin (or Ripple) posse has to resort to propaganda rather than to compete in the market place of ideas it now gives me a very negative impression. If Colored Coin is really a better technology why would anyone say that the most liberating feature of Mastercoin is the "absolutely most stupid thing". The user currencies are really the best thing about Mastercoin because of the potential. Also the idea that Mastercoin will spam the blockchain? Mastercoin users pay fees like everyone else so how is it spam? Also it adds far more value to the blockchain than perhaps anything else so I don't get it. Maybe PR is more important than most people think. And this isn't the only propaganda out there, there are all the vague threats of jail time popping up from people who seem to be associated with Colored Coin as well. But why would the developers of Mastercoin be at any more risk than the developers of Colored Coin, Bitcoin or any encryption software? Encryption itself can be abused but that doesn't mean new algorithms shouldn't be invented out of fear of angering some entity. The fact that people are afraid of Mastercoin to the point of spreading propaganda means that perhaps it's on the right track. |
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There will never be more MasterCoins, unless the MasterCoin protocol gets hard-forked. Potentially anybody could do such a hard fork, and if it happened, people would have to decide if they wanted to stay or to join the new fork.
So far the price of BTC has risen faster than we can spend it, so we actually have a lot more money now than when we started, even though we've spent quite a bit. Of course, that could always change if BTC crashes, as it has been known to do. Because of that possibility, I'm a tightwad on a lot of things. Just ask the board - we're currently discussing whether we should hire a very prestigious PR firm who is offering us a discount and offering to take payment in BTC/MSC because they are hugely into what we are doing. However, it's still a LOT of money, and I'm looking at cheaper alternatives before we commit.
I hate PR firms and the notion of hyping this thing up. Let's just make the damn thing work really well. That will bring more users than 50 PR firms. Why spend 'a LOT' of money telling people about how great this is. Why not just let them find out on their own accord. This is accomplished for free the day we make the system highly functional. Putting pretty paint on it won't get us to the finish line any faster. Forget the PR and the hype. We don't need that. We need to focus on a kick-ass solution that just works. The rest will take care of itself. I've already emphasized the point you've made before to the board that I do not want patting-ourselves-on-the-back self-congratulatory sort of PR but moreso to engineer a framing that would attract human investment ie developers so that we could accelerate the goal of "make[ing] the system highly functional" The PR needs to focus on explaining the concepts to technical minds one concept at a time. Start with the escrow, make a video explaining it, let JR give an interview on Slashdot and in the link have the video explaining the concept of the user currencies operating through the escrow. But basically you have to explain something like this one concept at a time, through videos showing visual illustrations of the concept. That is how most of us learned about Bitcoin. The whitepaper and the video combined with interviews. Finally the really technical stuff needs to be explained too, like what is the exodus address and what are type B transactions? What is a protocol layer? All that has to be explained to the technical types who want endless details via a wiki.
You should check it again. Totally open-source since a month . I agree they are not good at communicating but their main aim is not bitcoin community but exchange platform like zipzap and future gateways. With more gateways and nodes the ripple network will be distributed enough to be fair and honest.
New features are coming with "contracts". I don't think it's too complex, it can easily be integrated and someone could use a ripple wallet without even know about it. About flexibility I couldn't really tell I'm not competent enough to say.
XRP distribution model is particular but you don't need xrp to use ripple network (mm ok actually you need less than 1$ to fund a wallet...). About long-term appreciation I think it may appreciate if the network find more gateways and plateforms that use ripple. Otherwise it may also disappear (just like bitcoin or mastercoin actually since there's not real economy backing them).
Interesting. I'll have to look into Ripple Contracts (to see if it's an idea MasterCoin should steal ) Smart contracts. It would make sense if Mastercoin has smart contract functionality. There are plenty of ideas on that such as mechanisms for time lock puzzles for use as a time release coin mechanism. I would guess this would be necessary to have expiration dates? Anyway I think it is something essential when the time comes so it should be on the to do list but to find out the different types of contracts which would be necessary perhaps we should set aside a thread just for brainstorming anything which isn't already on that list and then vote on the top contract ideas so that we have some quantification of the demand of the can't live without features.
You should check it again. Totally open-source since a month . I agree they are not good at communicating but their main aim is not bitcoin community but exchange platform like zipzap and future gateways. With more gateways and nodes the ripple network will be distributed enough to be fair and honest.
New features are coming with "contracts". I don't think it's too complex, it can easily be integrated and someone could use a ripple wallet without even know about it. About flexibility I couldn't really tell I'm not competent enough to say.
XRP distribution model is particular but you don't need xrp to use ripple network (mm ok actually you need less than 1$ to fund a wallet...). About long-term appreciation I think it may appreciate if the network find more gateways and plateforms that use ripple. Otherwise it may also disappear (just like bitcoin or mastercoin actually since there's not real economy backing them).
Interesting. I'll have to look into Ripple Contracts (to see if it's an idea MasterCoin should steal ) I'm a ripple fan but you should probably steal that =p I think that if mastercoin succeed it will stay inside a kinda "closed" crypto-world while some more FIAT friendly system like ripple will rule the woOOOoOOOoooOOOOOooooold The exact opposite. For Mastercoin to succeed it has to free itself from the closed crypto world and become a FIAT friendly system. Mastercoin has to get value from the real world and not the virtual world. If ripple has any use, it will be as a bridge to allow easier transport of Fiat value into Crypto. That's given a lot of if's. If it overcomes the stigma of adopting so many failing features of fiat, if it proves to be secure (It's code has NOT proven itself in any way as of yet), if it can become completely decentralized and trust free, if people will accept that there was a 100 Billion unit pre-mine and Ripple/Opencoin will be keeping most of them, If people don't just go to a BTC ATM (Which they will prefer to do, and we can expect a network of these can simplify the moving of value globally via BTC) or other simple and familiar system. If, if, if, if, if. And even if all those if's weren't, then the bridge will still burn when the value is mostly transported and it becomes redundant. This includes any outlying features. Especially if projects are building it fully integrated or more tightly bound to Bitcoin (Mastercoin, Coloured Coins, etc.). Why use two systems, esp considering all of these if's? With that said, competition and a diverse ecosystem is good. It keeps everyone sharp and innovating. So I wish Ripple all the best.
Mastercoin does not need Ripple to get fiat value and it does not need Bitcoin to get fiat value. The best way for Mastercoin to get fiat value is through direct transfer of fiat into Mastercoin. Anything else and it defies logic. The Bitcoin ATM will be a good way for fiat value to get into Bitcoin and if that can work then it's probably open source and a patch can be released to allow it to transfer fiat into Mastercoin really easily. So the ATM machines are part of the solution certainly. The other way is to just sell Mastercoin cards. These could be gift cards which contain Mastercoins. These could be sold just like prepaid credit cards too if necessary but they are in a user currency and backed by Mastercoins. So I don't think there will be any problem getting fiat value into Mastercoin once it's worth enough money to do so. Some business will form to do it just as we have gyft right now which is supporting Bitcoin. |
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Hi all,
I agree that a PR firm that has measurable results (S.M.A.R.T) will be important in the near future.
However, the most important steps in the next few months are delivering features and value-added functionality to MSC so that word-of-mouth spreads within the Bitcoin community. I would first leverage the Project's success to market itself and then spend some money on PR.
When I voted for PR funding, I did so under emphasized intention that PR's focus will be to first spread awareness of the Mastercoin effort in the tech community with the primary goal of attracting more talented developers to this project and its contests, who might never ever hear about Mastercoin otherwise. Attracting more brains to come up with various scenarios and tackling these novel problems sooner might be one of the best investments Mastercoin can do for itself with the development coins it has been trusted with. Here is a suggestion, can JR do an interview with Slashdot? That is the best possible PR. Give an interview with Slashdot and discuss what Mastercoin means, what it can be developed into, and the contest. That will bring attention. After Slashdot then go with MIT technology review, Wired and ArsTechnia. Try to do it in that order and over the course of just a few days. Then allow the Mastercoin community to take it viral. JR is actually very good at marketing and PR. |
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And how would a miner receive the MSC TX fee if the miner doesn't know anything about MSC itself?
Would the MSC fee be kept in "pending" status until the miner accepts the MSC TX fees?
Just my 2 satoshis.
Just make the definition of a Mastercoin be that Coinbase txout scriptPubKeys are assigned them whenever Mastercoin transactions in the blocks they mine exist. There's no need to require miners to do anything explicit, and a definition like this works even with miners on p2pool and hashers on Eligius. Rewarding miners with msc fees would be a good way to distribute coins to the masses. The board could also do a giveaway this way, putting a transaction with a large msc fee in every block, for a period of time. Maybe a few days. A giveaway using this method would only be worth it if the mining pools agreed to distribute the coins. I don't think it would work well that way. Ultimately people are going to start buying Mastercoins and at that point there will be businesses set up to distributed Mastercoins to the masses. There are reward Mastercoins for development but since miners don't really contribute to the security of Mastercoin but to the security of Bitcoin it makes no sense to continuously reward them beyond the Bitcoin transactions. If you want Mastercoins you'll get them and it will become easier as Mastercoins become more useful to get them. Actually a really interesting way to reward miners & increase distribution. The problem is longevity. To make miners notice I would say the reward needs to be at least a few MSC and even at a single MSC the entire Exodus fund would be dry by around 50K rewarded blocks (there are ~52K blocks a year, though not all of them would contain Mastercoin transactions of course).
Definitely interesting, though not sustainable long term - could be used for short term distribution though.
The problem with trying to distribute Mastercoins through the mining channels is that it doesn't make much sense. For Bitcoin it made sense because Bitcoin miners create security in Bitcoin. Bitcoin miners don't really help to protect Mastercoin from being forked so it offers no security for Mastercoin from any sort of attack. Mastercoin would be better protected if the focus were on giving incentives to issuers and on convincing people to actually buy Mastercoins. Early on you need to give them away so people know it's useful to have but once you convince people it's useful then you have to transition to a business model. For example AOL would offer 30 days of free Internet access to anyone but then after you realize how useful the Internet is you would have to pay. For Bitcoins because new Bitcoins are constantly being generated and because Bitcoin is strictly a unit of account it makes sense to distribute newly generated coins to miners who can push it through the ecosystem. Mastercoins aren't inflationary at all, there aren't any newly generated coins to give out and there is no security benefit either so basically to give coins out to miners you have to tax someone else. In my opinion miners should be paid in Bitcoins and if they want Mastercoins they should buy them directly or buy a voucher/product/service which can be redeemed for Mastercoins. |
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Yeah that's not decentralized or a corporation. I never said you can't run a business and use Bitcoins. You asked about "completely distributed corporation". Maybe those words don't mean what you think they mean.
Sole proprietorship =/= corporation
Registered with state =/= "completely distributed"
Distributed, not decentralized. It can have a central owner but the employees are distributed. While decentralized would mean ownership would be decentralized via crowdfunding but it could be that all employees work in the same city. If there is a virtual office why can't you choose a micro nation or some other really friendly nation to register in just to have a corporate face to the virtual office? |
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Couldn't we use some sort of smart contract to create distributed corporations without the need of any home or center state? Couldn't we use a virtual office?
You could probably make a "distributed business" but it wouldn't be a corporation and you would have no protection under the law. A corporation is a legal entity, it doesn't exist outside the law and the state defines the parameters of that existance. You can't just say "we have formed xyz Inc". When you file incorporation documents (with a state) the state creates xyz, Inc to be a separate entity under the law. So if you don't do that no corporation exists, and while your business may operate outside the state YOU (as a potential owner, employer, or investor) can't operate outside of a state. Maybe someday but not today. No matter where you are YOU fall within the scope of a state. Why does that matter? Corporations (and other legal constructs like LLC, limited companies, limited master partnerships) exists to decouple the business from its principals (owners, investors, etc). The incorporation process creates a new entity (hence the term corporate personhood) and this entity legally distinct from its owners. Why would you want to decouple the business from ownership of the business? A corporation can file its tax returns, own assets, incur debts, be sued, etc separate from its owners. That is the whole point of a corporation. If you own shares in google and google doesn't pay its taxes you as a shareholder have no direct liability (although the share price might decline). Google is a distinct entity from its owners. Now on the other hand say your "decentralized company" doesn't pay its taxes. Under the eyes of the state the "decentralized business" doesn't exist. YOU own it, YOU (well all owners jointly) are liable. The same thing would happen if customers sued "the business". Under the law the business doesn't exist as a distinct entity. The lawyers of the customers would sue YOU personally which means all your personal assets remain liable. If the "company" borrows money well in reality as an owner YOU are borrowing money. When the company defaults on a loan, the creditors will sue you directly. Starting to see the picture. Simple version 1) States makes laws 2) Laws are what make a corporation. 3) Corporations only "exist" with #1 & #2. 4) If no corporation exists then law will simply see the business and the owners as the same entity. Sure you can. http://en.wikipedia.org/wiki/Sole_proprietorshipSole proprietorship is an example. Also you can register it under the laws of micro nations rather than traditional nations if you need to for legal reasons. Absolutely. I'm doing something similar. I have an LLC located and registered in the state where I live but have no 'real' office and no employees I've ever met in real life. Everything is done via the Internet. The only difference is that I don't pay in Bitcoin but it would be trivial to do so.
Can you describe how you went about doing this and how you would go about paying in Bitcoin while handling all the accounting? |
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I think that it's possible but you are still subject to state laws and taxes then.
How? if it's not in any specific state? |
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Not sure what you mean by decentralized, but corporations are artificial legal entities that doesn't exist outside the law of a state. This is in contrast to a "natural human" which exists materially exists regardless of the laws of a particular state.
In this respect every corporation has a "center", a home, where it is incorporated. Corporations are institutions of the state, they are created by the state, the exist at the will of the state, and they can be ended by state. Two examples of the latter would be a corporation being dissolved because the corporation didn't pay taxes, or piercing the corporate shield to make operators of a corporation liable in the case of fraud.
Couldn't we use some sort of smart contract to create distributed corporations without the need of any home or center state? Couldn't we use a virtual office? |
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I'm just wondering whether or not it is possible to do it technically speaking? Why or why not?
What would need to be built to allow for it and why aren't we seeing any distributed corporations if it is possible?
For all the talk on how revolutionary Bitcoin can be all the corporations seem to be exactly as they were. When are we going to completely demolish the archaic corporation and replace it with a new way of doing things?
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I got a PM from someone (who shall remain anonymous) which ended with: Cheers mate and thank you for saving me financially...
That's kind of scary. If you are in financial trouble, please do NOT bet your remaining money on wildly risky distributed currencies! Sure, if you do your homework it's probably better than a lottery ticket, but still I think it's safe to say that a financial advisor would not recommend this course of action! I think this is happening because look at the state of the economy? There are no truly safe investments which are going to give any sort of guaranteed ROI. Also on Bitcointalk most people already took the plunge to invest in Bitcoins so its just the high risk high reward kind of crowd here and we all fit into that category to a certain extent. Mastercoin once it's built hopefully can improve the situation but you're also right that Mastercoin is far from a safe bet if its still in the infancy proof of concept stage. That being said since I have Mastercoins too I'm not really in a position to tell anyone not to take the same risk. If you're prepared to win you have to also be prepared to lose equally. Hello everyone! I'm glad to announce a new bounty that I just approved with the board. The bounty is for building a Mastercoin Faucet. The bounty amount is between $500-$850, depending on the features that will be implemented. Please direct any questions/comments to the bounty thread - thanks! This will be superb. Finally we will have a place to send people to get free Mastercoins. |
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