[Invalid E-voucher number or activation code or turing number.]

Thread https://bitcointalk.org/index.php?topic=308889.0, member Dr-Exchanger

member profile https://bitcointalk.org/index.php?action=profile;u=143252

The problem that he send me used Perfect money e-Voucher.

e-Voucher #   8042010501
Activation code   1255099259180210
Amount   4000.00 USD

he send me and after few minutes I tried to load it but got this error

Invalid E-voucher number or activation code or turing number.




We started discuss the deal 5 days ago but that time TS not have okpay so I wait

Today my customer need exchange 4000 wmz to 4000 pm, Dr. said 3% not small but ok if deal finished succesfully not problem, but no after all this I got scammed.

After Iam verify that Dr. is the real person not hacker ( we made personal message verification) and 4 hrs of waiting Iam was able to send him money ASAP he comeback.

I made transfer 4120 , 120$ fee and start asking him about e-Voucher, but he said me wait 10 minutes because he is driving car, i wait 10 mnutes then 20 minutes then 25 mnutes he stop replying, Iam start worry my customer also, I didnt thought that he is bad but there is many bad feedbacks on last 2-3 pages so Iam really start worry that he is rascal, but he comeback and said me that he told me about he on the road, it is ok, I can wait 10-15 mins but not 30-40 mnutes man!!! ok?  If you start deal please, kindly complete the transaction as soon as possible.

Anyway after he gave me code I check it and code was invalid, I think he load it on another his account


here is my account photo




Be carefully with him, my custumer will try to refund money if he not spent it already


all conversation

Code:

Etlase 2 (17.09.2014 14:29)
hello, have okpay today?

Etlase 2 (17.09.2014 20:00)
hello, there?

Etlase 2 (19.09.2014 13:58)
hello, i want pm for wmz

Dr-Exchanger (19.09.2014 15:23)
How much ?

Etlase 2 (19.09.2014 15:25)
1500

Etlase 2 (19.09.2014 15:27)
4000 pm what wll be your price?

Etlase 2 (19.09.2014 15:28)
tell me rates first for 1000 and 4000

Etlase 2 (19.09.2014 15:35)
how much do you have?

Dr-Exchanger (19.09.2014 15:36)
I don't understand exactly !

Dr-Exchanger (19.09.2014 15:36)
Plz specify exactly

Etlase 2 (19.09.2014 15:36)
I need pm, do you have?

Dr-Exchanger (19.09.2014 15:37)
How much wmz you wanna exchangw ?!

Etlase 2 (19.09.2014 15:37)
Whats your rate, i need 1000-5000 but tell me rate

Dr-Exchanger (19.09.2014 15:37)
What rate you looking for ?

Etlase 2 (19.09.2014 15:38)
2%

Dr-Exchanger (19.09.2014 15:46)
Sorry can't

Dr-Exchanger (19.09.2014 15:46)
3% i can

Etlase 2 (19.09.2014 15:47)
2.5% for 4000 wmz is it ok?

Etlase 2 (19.09.2014 15:49)
Iam need time to time 2/3 time per week

Dr-Exchanger (19.09.2014 15:49)
Can't my friend

Dr-Exchanger (19.09.2014 15:49)
Im sorry

Etlase 2 (19.09.2014 15:50)
ok, 3%

Etlase 2 (19.09.2014 15:51)
4000$ I need

Dr-Exchanger (19.09.2014 15:51)
Ok lemme check my pm balance

Etlase 2 (19.09.2014 15:51)
ok

Etlase 2 (19.09.2014 16:07)
what do you do

Dr-Exchanger (19.09.2014 16:08)
Ok available

Dr-Exchanger (19.09.2014 16:08)
Plz send your WMz here : Z214221457815

Etlase 2 (19.09.2014 16:09)
ok
10 min i collect all to one


Dr-Exchanger (19.09.2014 16:09)
Okay

Dr-Exchanger (19.09.2014 16:10)
You still need okpay ?

Etlase 2 (19.09.2014 16:10)
if you have yes

Etlase 2 (19.09.2014 16:10)
how much?

Dr-Exchanger (19.09.2014 16:10)
About 4k also

Dr-Exchanger (19.09.2014 16:11)
But 7%

Etlase 2 (19.09.2014 16:11)
ohh, need for 3-4% sorry

Etlase 2 (19.09.2014 16:16)
how much total pm you have? maybe i can take 5-7k

Dr-Exchanger (19.09.2014 16:17)
Can peovide only 3k for now

Dr-Exchanger (19.09.2014 16:17)
4k sorry

Etlase 2 (19.09.2014 16:19)
ok wait me

Etlase 2 (19.09.2014 17:07)
hello, iam almost ready, i will send you personal message now and you reply ok?

Etlase 2 (19.09.2014 17:09)
tell me please

Dr-Exchanger (19.09.2014 17:09)
Ok

Etlase 2 (19.09.2014 17:11)
your skype hacked?

Etlase 2 (19.09.2014 17:12)
what about icq


Etlase 2 (19.09.2014 17:14)
what going on, reply me faster please


Dr-Exchanger (19.09.2014 17:14)
What's your problem

Dr-Exchanger (19.09.2014 17:14)
I told you ok

Dr-Exchanger (19.09.2014 17:14)
I don't have all the time for you

Etlase 2 (19.09.2014 17:15)
I find your skype got hacked

Dr-Exchanger (19.09.2014 17:15)
So you do what are you doing and finish

Dr-Exchanger (19.09.2014 17:15)
Yes

Dr-Exchanger (19.09.2014 17:15)
I already warned all about that

Etlase 2 (19.09.2014 17:20)
ok i need electronic voucher, can you do?

Dr-Exchanger (19.09.2014 17:20)
No

Dr-Exchanger (19.09.2014 17:21)
I will send directly only

Dr-Exchanger (19.09.2014 17:21)
Anyway its 2 hours passed

Etlase 2 (19.09.2014 17:21)
Iam need voucher because my pm fee 2%

Dr-Exchanger (19.09.2014 17:21)
Have to go now

Dr-Exchanger (19.09.2014 17:21)
Ok when i'm back i will do vouchers for you

Dr-Exchanger (19.09.2014 17:21)
BRB

Etlase 2 (19.09.2014 17:22)
how long should I wait? i ready to do it now

Dr-Exchanger (19.09.2014 17:22)
Will text you when im back

Etlase 2 (19.09.2014 17:29)
pm sent when you back reply me in private message

Etlase 2 (19.09.2014 17:49)
text me when you back

Etlase 2 (19.09.2014 18:40)
back?

Etlase 2 (19.09.2014 18:49)
I need now

Etlase 2 (19.09.2014 19:47)
have person who need 10/12 bitcoins what your rate

Etlase 2 (19.09.2014 19:47)
I mean he want sold it

Etlase 2 (19.09.2014 19:47)
not buy

Dr-Exchanger (19.09.2014 19:51)
Hi

Dr-Exchanger (19.09.2014 19:51)
I will be back after 1 hour

Etlase 2 (19.09.2014 19:52)
ok, Iam wait you

Etlase 2 (19.09.2014 20:56)
you back?

Dr-Exchanger (19.09.2014 21:12)
Yep :)

Dr-Exchanger (19.09.2014 21:12)
I'm here now

Dr-Exchanger (19.09.2014 21:13)
Lemme reply on your message first

Dr-Exchanger (19.09.2014 21:17)
Replied :)

Dr-Exchanger (19.09.2014 21:57)
So ?!

Etlase 2 (19.09.2014 21:58)
just back

Dr-Exchanger (19.09.2014 21:58)
Ok great

Dr-Exchanger (19.09.2014 21:58)
Check your inbox

Etlase 2 (19.09.2014 21:59)
ok

Dr-Exchanger (19.09.2014 22:14)
Soooo ?!!

Etlase 2 (19.09.2014 22:29)
sry my traffic ends
iam sit through mobile phone so I went to shop to topup it

Dr-Exchanger (19.09.2014 22:29)
That's ok

Etlase 2 (19.09.2014 22:29)
sending 4120 and you will give me e-voucher?

Etlase 2 (19.09.2014 22:29)
4000 rght?

Dr-Exchanger (19.09.2014 22:29)
Ok np

Dr-Exchanger (19.09.2014 22:29)
Yep

Etlase 2 (19.09.2014 22:29)
just 5 min

Etlase 2 (19.09.2014 22:40)
sent

Etlase 2 (19.09.2014 22:40)
give me it

Etlase 2 (19.09.2014 22:41)
?

Dr-Exchanger (19.09.2014 22:41)
Ok wait 10 mins pkz

Etlase 2 (19.09.2014 22:42)
so long?

Dr-Exchanger (19.09.2014 22:42)
Cause im driving

Etlase 2 (19.09.2014 22:42)
ok

Etlase 2 (19.09.2014 22:43)
not longer pls I wait you half of the day

Etlase 2 (19.09.2014 22:50)
give me details

Etlase 2 (19.09.2014 22:52)
answer

Etlase 2 (19.09.2014 22:52)
You are calling. Waiting Answer...

Etlase 2 (19.09.2014 22:53)
Call dropped

Etlase 2 (19.09.2014 22:53)
what is going on?

Etlase 2 (19.09.2014 22:55)
15 minutes, give me details of perfect money, stop car please Iam seriously scare

Etlase 2 (19.09.2014 22:57)
fuck you scam me?

Etlase 2 (19.09.2014 22:59)
going to post on forum

Dr-Exchanger (19.09.2014 23:00)
Lol

Dr-Exchanger (19.09.2014 23:01)
You are so anxious

Etlase 2 (19.09.2014 23:01)
?

Dr-Exchanger (19.09.2014 23:01)
I told you im driving not to worry

Dr-Exchanger (19.09.2014 23:01)
But you worried

Etlase 2 (19.09.2014 23:01)
whats going on? I cant

Dr-Exchanger (19.09.2014 23:01)
I has stopped the car

Dr-Exchanger (19.09.2014 23:01)
To send you

Etlase 2 (19.09.2014 23:01)
yes 20 minutes you can stop and finish deal

Etlase 2 (19.09.2014 23:01)
ok


Etlase 2 (19.09.2014 23:01)
faster Iam very tired

Dr-Exchanger (19.09.2014 23:01)
Im setting on cafe to make the vouchers

Etlase 2 (19.09.2014 23:02)
ok

Dr-Exchanger (19.09.2014 23:02)
Don't worry plz

Dr-Exchanger (19.09.2014 23:02)
Wait ok

Etlase 2 (19.09.2014 23:03)
another guy wait me Iam wait you this is no good when it takes long time

Dr-Exchanger (19.09.2014 23:03)
I know

Etlase 2 (19.09.2014 23:03)
and this bad feedbacks on you make me very sad ;-)

Dr-Exchanger (19.09.2014 23:03)
I'm making it now

Etlase 2 (19.09.2014 23:03)
when you delay, ok

Dr-Exchanger (19.09.2014 23:04)
Lol

Dr-Exchanger (19.09.2014 23:04)
My feedback with you is my honesty ;)

Dr-Exchanger (19.09.2014 23:04)
Even for million $

Dr-Exchanger (19.09.2014 23:04)
Lemme make the voucher

Etlase 2 (19.09.2014 23:04)
ok

Etlase 2 (19.09.2014 23:04)
iam wait you

Etlase 2 (19.09.2014 23:06)
?

Etlase 2 (19.09.2014 23:07)
man you kidding?

Etlase 2 (19.09.2014 23:07)
30 seconds to make it

Dr-Exchanger (19.09.2014 23:08)
WAAAAAIT

Dr-Exchanger (19.09.2014 23:08)
I'm doing tge voucher

Dr-Exchanger (19.09.2014 23:08)
Waaaaait !!

Etlase 2 (19.09.2014 23:08)
say me how long 2 mins, 10 mns , already 35 mins

Dr-Exchanger (19.09.2014 23:10)
!!

Dr-Exchanger (19.09.2014 23:10)
Ok

Dr-Exchanger (19.09.2014 23:10)
Here is your voucher

Dr-Exchanger (19.09.2014 23:10)
e-Voucher # 8042010501
Activation code 1255099259180210
Amount 4000.00 USD

Dr-Exchanger (19.09.2014 23:13)
Got it ?

Etlase 2 (19.09.2014 23:13)
yes
wait my copy paste not work

Etlase 2 (19.09.2014 23:13)
filling by hands

Etlase 2 (19.09.2014 23:13)
have more?

Dr-Exchanger (19.09.2014 23:14)
You opened a claim on webmoney

Etlase 2 (19.09.2014 23:14)
Invalid E-voucher number or activation code or turing number.

Etlase 2 (19.09.2014 23:14)
Iam not do

Etlase 2 (19.09.2014 23:15)
my custumer may do, wait i ask

Etlase 2 (19.09.2014 23:15)
check the code

Etlase 2 (19.09.2014 23:15)
it says wrong


Dr-Exchanger (19.09.2014 23:15)
Its valid man

Dr-Exchanger (19.09.2014 23:16)
Just made it now

Dr-Exchanger (19.09.2014 23:16)
You wish screenshot ?

Dr-Exchanger (19.09.2014 23:17)
Wait

Etlase 2 (19.09.2014 23:18)
ok so i need to reboot code so long maybe i fill wrong my copy paste not working need reboot


Dr-Exchanger (19.09.2014 23:21)
You have told me that you need it to send to a guy

Dr-Exchanger (19.09.2014 23:21)
!!

Etlase 2 (19.09.2014 23:21)
he will delete now


Etlase 2 (19.09.2014 23:22)
give me screen or valid voucher

Dr-Exchanger (19.09.2014 23:27)
You have received an image

http://files.icq.net/files/get?fileId=E72465D8312847679DE1931A7F190B8E

Dr-Exchanger (19.09.2014 23:44)
Now you disappeared man ?!

Dr-Exchanger (19.09.2014 23:44)
Why you claimed on me on wmz ?

Dr-Exchanger (19.09.2014 23:44)
I provided you tge service

Dr-Exchanger (19.09.2014 23:45)
Why you wanna scam me ?

Etlase 2 (19.09.2014 23:45)
iIam not do ths is guy who send you maybe,  but man your code not working

Dr-Exchanger (19.09.2014 23:45)
The code is working man

Dr-Exchanger (19.09.2014 23:45)
Check who you send to

Etlase 2 (19.09.2014 23:45)
what scam? man iam wait you 35-40 minutes you gave me code, wtf

Dr-Exchanger (19.09.2014 23:46)
I already checked it and its already used few mins ago

Dr-Exchanger (19.09.2014 23:46)
Man

Etlase 2 (19.09.2014 23:46)
if you seriously you should finished the deal then make it working

Dr-Exchanger (19.09.2014 23:46)
Plz don't play with me

Dr-Exchanger (19.09.2014 23:46)
How i make it working ?!

Dr-Exchanger (19.09.2014 23:46)
You already used it

Etlase 2 (19.09.2014 23:46)
man code wasnt work 10 mins ago, iam check it now wait

Dr-Exchanger (19.09.2014 23:46)
Or check you send to

Etlase 2 (19.09.2014 23:47)
i not use
i can show you my wallet
wait 3 mins iam post you screen, wtf you telling ? IMA WAIT YOU $) MINUTES AFTER YOU RECEVE MONEY? you really scammer

Dr-Exchanger (19.09.2014 23:55)
Give me your email

Dr-Exchanger (19.09.2014 23:55)
To send another screenshot

Dr-Exchanger (19.09.2014 23:55)
And the voucher in details

Dr-Exchanger (19.09.2014 23:57)
?

Etlase 2 (19.09.2014 23:57)
2 min i giving you screen

Dr-Exchanger (19.09.2014 23:58)
Screen of what !

Dr-Exchanger (19.09.2014 23:58)
Its already used man !

Dr-Exchanger (19.09.2014 23:59)
I sent you the voucher

Dr-Exchanger (19.09.2014 23:59)
Check it from your side !!!

Etlase 2 (20.09.2014 00:08)
i checked it and showed you the error

Etlase 2 (20.09.2014 00:59)
https://i.imgur.com/pATjqay.jpg

Etlase 2 (20.09.2014 00:59)
look


Etlase 2 (20.09.2014 01:31)
why you stop talking?

[The Four Pillars of Decrits]

With the recent talk of stable currencies popping up again, I wanted to make a new thread regarding my proposal for Decrits, where the primary goal is to provide a currency that is fundamentally different from bitcoin in that currency can be produced for a stable cost--and much more.

This post is intended revise that proposal with my current notes and provide a digestible version that is a starting point for people to ask questions. I'm going to approach this with the same tactic as a famous gaming company and use The Four Pillars of Decrits as topic points.

Notes: Every time I use a number or a percentage, assume that figure is up for debate. I apologize for using a lot of acronyms, I hope it makes this easier to read. I am terrible at creating terminology, so please feel free to make suggestions. If you think an important detail is missing, please ask the question rather than pointing it out as a weakness or failure--I am glossing over a lot of details for brevity and to promote easier discussion.

1. Securing the Network Without Proof-of-Work: Reaching and Maintaining Proof-of-Consensus

• A. The Consensus Block (CB) The CB, at its core, is simply just a merkle-root hash^? that 100% of Shareholders have agreed is the hash of the entire state of the network at a certain point in time. Disagreements are resolved by providing cryptographic proof. A CB point is locked in every 10 Consensus Days (CDs), which are periods of 87,660 seconds or 1/360th of 365.25 regular days. Network time will be roughly agreed on by using NTP pool.
• B. Consensus by Shareholders Consensus is determined by a group of peers called Shareholders (SH). Anyone may purchase shares in the network with Decrits using a special transaction^? and become a SH. The price of each share will be a meaningful amount (intended to be in the range of 3,000-5,000 USD), and this money is locked for a period of at least 1 Consensus Year (CY - 360 CDs), automatically renewing unless a SH declines to renew. Each SH will be selected to provide a Transaction Block (TB) for a specific 10 second period during each CB. Each new TB will acknowledge the last seen TB, and the SH that created it will sign the CB along with a hash of the changes to the network state as of that moment. Note: When there are less than the number of SHs required to make a TB each 10 seconds each CB, SHs will have to make more than one during a CB. When there are more, some SHs will confirm the TBs of others.
  
  • i. Shareholder Incentives SHs are primarily incentivized by receiving 50% of the transaction fees collected by the network. Transaction fees are 0.01 Decrits or 0.01% of the transaction amount, whichever is greater. SHs earn Shareholder Reputation (SR) as they perform their duty to the network without incident. This reputation is used to determine what percentage of transaction fees they will receive. The highest reputed SH will earn no more than double the lowest, and the SR system will only be on a scale of 2-3 CYs of service (e.g. after 3 years you are among the highest reputed).
  • ii. Shareholder Disincentives Reaching 100% consensus is of utmost priority. If a SH misses his TB, he must sign the prior CB within the next 10-20 CDs (depending on when he needed to create a TB). If he does not, his share will be destroyed, including the money associated with it. Missing a TB but then signing the CB results in a soft strike. If three soft strikes are received in one CY, the SH will be removed from consensus with his share returned less a 25% penalty which is destroyed. Creating a bad block (a second TB for the same time period or one that contains a bad spend) will also result in the share and money being completely destroyed.

IMPORTANCE: Securing the network requires only the energy needed to validate transactions, the bandwidth needed to distribute them, and the storage to hold the network state. No proof of work is necessary, therefore the amount of energy required to secure the network is magnitudes lower than Bitcoin. Using an account ledger instead of a transaction ledger means that both storage and bandwidth requirements are also significantly reduced. Transactions will be typically confirmed in 5-15 seconds depending on network propagation lag, though if a TB is missed they may take an additional 10 seconds. As long as the TB chain is unbroken, these transactions are secure unless a massive network split occurs within the next 10-20 CDs before it has been accepted into the CB and signed by 100% of the consensus. Even then, as with bitcoin, unless your transaction is being specifically targeted, it should still be secure.

2. Decentralizing the Network: Incentivizing Network Propagation, Preserving Anonymity, and Checks and Balances

• A. Primary Network Propagation via the Cloudnet (CN) The Cloudnet is a group of peers called Cloudnet Peers (CNP). Anyone may become a CNP by creating a special transaction that includes an IP address (IPv4, IPv6, tor, i2p), an asymmetric encryption key, a public key, and a deposit of 1/20th of a share. This information is stored in the CB. A CNP will be able to retrieve his deposit fairly easily but with some restrictions to deter abuse. New CNPs will make efforts in connecting to several other CNPs, and they will accept and retransmit new transactions and network data as well as provide an access point for Cloudnet Clients (CNC - "light" clients) to retrieve (provable) portions of network data.
  
  • i. Cloudnet Peer Incentives CNPs are primarily incentivized by receiving the other 50% of transaction fees collected by the network. A portion (10%?) of these fees will be distributed based on Cloudnet Peer Reputation (CNR) which is gained by being in the top 90% of credited CNPs during a random interval of the previous CB. CNPs receive credit by CNCs who use their identification code in a transaction. The other 90% of the fees will be distributed in a bracketed manner (slight bonus to the top, slight penalty to the bottom) towards those who were credited with transactions during that random interval.
  • ii. Cloudnet Peer Disincentives CNPs are required to provide a public key so that their identity may be proven to a CNC. A CNC may request that a CNP sign information retrieved so that the CNPs deposit is destroyed for providing provable disinformation. CNPs will lose reputation over time if they are not credited during the random intervals.
  • iii. Shadow Peers Shadow Peers (SP) are CNCs that dedicate some bandwidth to transmitting network activity between other SPs. SP information will be given out very sparingly by those that request it of CNPs. In the event of a major DDoS attack against the published CNP addresses, SPs will continue to transmit network activity.
• B. Preserving Anonymity of CNCs Providing an asymmetric encryption key allows CNCs to connect to CNPs in a completely encrypted handshake process, preserving anonymity against outside observers. The public key provided by the CNP will ensure that no man-in-the-middle attack can be taken against a CNC. The default CNC implementation will provide a weighted but random system for determining whom to credit to preserve CNC->CNP anonymity. CNCs can trade bandwidth for privacy and retrieve blocks of information rather than account-specific information. Support for tor and i2p should be part of the protocol from the start to allow for "preserved anonymity" connections that can operate with much less bandwidth and only send or retrieve necessary information.
• C. Preserving Anonymity of CNPs (and SHs) CNPs will often have to associate IP addresses with account numbers when joining or cashing out of the CN. This is terrible for privacy-minded people and they should not have to be forced to use some outside "laundry" service to disassociate this connection. To provide this, buy-ins and cash-outs may be performed with blind transactions (invented by Chaum). More detail here.
• D. Checks and Balances Transmitting network data is a voluntary activity by each CNP. If a significant group of SHs are intent on disrupting the network, CNPs do not have to transmit their TBs. This means, assuming enough CNPs agree that disruption is being attempted, honest SHs down the road are unlikely to see the disruptive blocks (e.g. ones that drop all transactions or do not include important transactions). This will cause strikes to be accrued against disruptive SHs and potentially destruction of their deposit. This is an effective and decentralized deterrent against malicious SH activity.

IMPORTANCE: Being a transmitting node pays dividends. This encourages as many people as is profitable to transmit data for the network. The group securing the network is balanced by a different and larger group transmitting for the network; the "powers" are separate. Bitcoin transaction fees can be lower if transmitting nodes are fewer because the miners are the source of approved transactions as well as the price of transaction fees. Because transaction fees are set with Decrits and the costs of securing and transmitting are low (no mining), the securing and transmitting parts of the network will expand as transactions increase. The Decrits network is encouraged to become more decentralized as it expands. The Bitcoin network is encouraged to become less decentralized as it grows because transaction fees can be reduced as less energy is required to secure the network. Since energy is not required for Decrits' security, many, many more people can participate. With Bitcoin, the more people that participate, the higher the transaction fees must be.

3. Creating Money: Making it Stable and Energy-Efficient

• A. Producing a Mint Block (MB) A Mint Block is a potential block of money that can be created by the network if several prerequisites have been met: 1) Sufficient transaction activity has occurred since the beginning of the last MB, 2) The current/prior MB has been completed, and 3) Between 5 and 10% of the MB's monetary award must be "burned" by potential minters in a limited time frame to join the Mint Block Queue (MBQ) to create new money. The MBQ is joined individually by those wishing to create currency and each queuer will be assigned to create 2-3 coins. A full MBQ proves to the network that sufficient demand for new currency exists and sufficient power is ready to create it. More details. These restrictions place a brake on unbound monetary creation.
  
  • i. Adjusting Difficulty Difficulty is adjusted after each MB by dropping the 25% fastest and 25% slowest queuers to create currency, and comparing the middle 50% to the current difficulty. A speed increase will directly reduce the award of the MB (e.g. if speed increased 3%, each coin produced will award 3% less). This is so that technological advances that create profitability, not economic demand, are disincentivized. The next MB's difficulty will be adjusted based on a weighted scale of the last 10 MBs. This is so that it requires a sustained change in the power of the network to really increase the difficulty. Difficulty will never decrease; producing a block more slowly than expected will simply set the increase at 0%.
  • ii. Minting Incentives and Disincentives To avoid difficulty stagnation and to penalize those who join the queue more times than their system can reasonably handle, queuers who create coins in the top 50% will receive additional money while those in the bottom 50% will take penalties. The initial idea for this is also described in this post. However, to avoid potential ways to game the system (including using ASICs), each queuer will be compared with a random sample of his peers rather than the whole MBQ. There are other designs that increase the profitability of being honest* (or reduce the profitability of being dishonest) that go a bit beyond the scope of this document.
• B. Producing Energy Efficient Currency All of the difficulties associated with minting are in place so that new currency is created only when the value of Decrits are profitably above their cost to produce. However, this is not at all energy efficient. To provide energy efficiency in currency creation, free money will be distributed to users of the network (not minters) based on minted money. 5x the MB award will be given to either the sender or receiver of a random set of transactions during a certain time frame before (and potentially after) the MB based on multiples of the tx fee; 5x will be awarded to a random selection of accounts based on each account's percentage of the total amount of currency in existence. If a second MB is started within a time window of the first, these multiples will increase to give out more free money in response to network expansion. More details: at the end of this post and here.
• C. Achieving Stability and Reducing the Hardware Tax The intent of the complicated process of minting currency is to provide a stable cost to produce new currency. This in turn, I believe, will result in a reasonably stable value when compared to other commodities--perhaps even providing a stabler value compared to the whole basket than many or most other individual commodities. This requires a deeper explanation for the reasoning behind the design decisions which will be provided in the next post.

* - I use the term "honest" to mean network users whose actions do not threaten the stability or security of the system. I use this in a very general sense--the network itself will not specifically identify or penalize users it thinks are dishonest, but it will make their actions more obvious and it will give time for honest users to respond. I will go into detail in the next post.

IMPORTANCE: To provide a strong base for a currency, people must want to use it as currency. People must also be able to create it as necessary in the face of economic expansion or manipulation. Hoarding can not manipulate the price upwards because minters can create new currency in response. During network expansion, transaction activity will receive a greater amount of new currency (in terms of award to volume) than minting or hoarding. This encourages both spending and accepting Decrits--and without the dire need for businesses to convert back to fiat. When the network is stable, hoarding offers no incentive over stuffing a non-price inflationary currency under a mattress.

4. Creating a Dynamic Network: Making it Scale and Adapt by Providing a Decentralized Foundation for Modifying the Network

• A. The Voting System SHs and CNPs will be allowed to propose changes from either a predefined list of voting options or by proposing changes to the core code. The core code will be part of the Consensus Block so that updating to new code "on the fly" will be possible. Core code changes will not pass unless a 90% majority of SHs and CNPs agree. If less than a 90% majority agrees, it is possible for the network to peacefully split and allow one way transactions from the old to the new network for some period of time. This is another extensive topic that will be detailed in a future post.

IMPORTANCE: A sufficiently large network simply cannot and should not rely on a core group of developers as the only source of the reference implementation. By providing the core code within the network, "hard forks" are an issue of the past. Those wishing to fork the network can do so peacefully and retain value from the existing network. If many people (not SHs or CNPs) agree that the idea is better, they may transfer currency over to the new network. Future, unforeseen changes in the world or in cryptography may require quick and decisive action from the network. Waiting for millions of clients to update to new software or thousands of miners (or maybe only tens or hundreds in the centralized way Bitcoin has gone so far) is not acceptable in the face of major problems.

https://bitcointalk.org/index.php?topic=118063.0

Hazek has pruned this thread so that only people who agree with his sentiments have posted. stan.distortion even had a nice, well-thought reply that was in no way trolling.

This is not appropriate behavior for a moderator. If this is policy of the bitcointalk messageboard, there are numerous threads in the economic boards with all kinds of arguments for or against certain economic theory. To my knowledge, hazek has not gone through and pruned the posts which disagree with his point of view in threads he did not start.

[What if some income is neither spent on consumption nor offered as funds for lending? That is, what if people—unexpectedly and on an economywide basis—prefer to add to their cash holdings? The increased demand for cash holdings would constitute saving in the sense of income not consumed but would not constitute saving in the sense of an increase in the supply of loanable funds.An exogenous change in money demand is rarely if ever the source of a macroeconomic disruption. And an occasional dramatic change in liquidity preference is more likely to be a consequence of an economywide intertemporal coordination failure than a cause of it.]

I see a lot of people saying economic quips in defense of bitcoin such as:

He did contribute to the growth over the last 10 years though, by not pulling goods and services out of the economy. He earns a general interest rate of return. All those shoes he produced are in the economy, creating even more growth. Hence, by not spending his coins he is investing in the general economy.

Aha, but again you are ignoring the time-value of money. The producer produced in the past, and deferred his consumption. It is from his delay of consumption that he "earns" more consumption over time. By not consuming something on each day, he enables that thing to be consumed by another market participant - by opting out of consumption, he enables others to opt-in for that same consumption at that price. If he consumed, then he'd be "taking" resources from others (by bidding up the price of those resources upon his consumption of them).

Also remember that by saving that money, he is not taking one iota of wealth from anybody else. Further, everyone has the exact same opportunity to enjoy the benefits of the appreciating money. Anyone who defers his consumption will be rewarded in the exact same way, in proportion to the consumption deferred. There is no special privilege, other than the skills, work, and talents of the individual producer - and these things are bestowed by nature. If you're upset about the unfairness of nature, then take it up with nature  

So I wanted to see if any Austrians believe this.

I found this article on Wikipedia: https://en.wikipedia.org/wiki/Paradox_of_thrift

It is a Keynesian idea that states: "The paradox states that if everyone tries to save more money during times of recession, then aggregate demand will fall and will in turn lower total savings in the population because of the decrease in consumption and economic growth."

Under its criticisms:

"The second criticism is that savings represent loanable funds, particularly at banks, assuming the savings are held at banks, rather than currency itself being held ("stashed under one's mattress"). Thus an accumulation of savings yields an increase in potential lending, which will lower interest rates and stimulate borrowing. So a decline in consumer spending is offset by an increase in lending, and subsequent investment and spending.

Two caveats are added to this criticism. Firstly, if savings are held as cash, rather than being loaned out (directly by savers, or indirectly, as via bank deposits), then loanable funds do not increase, and thus a recession may be caused – but this is due to holding cash, not to saving per se."

So I followed the citation for this criticism, and it is mostly based off of Hayek's discreditation of Keynesian economics. I will quote some things I find interesting.

http://www.auburn.edu/~garriro/cbm.htm

9.3: It is the forgoing of current and near-term consumption, after all, that frees up the resources with which to expand the economy’s productive capacity and make increasing future consumption possible.

[T]he output of consumables begins to rise. And with saving now in excess of capital depreciation, expansion continues in each of the stages of production. The economy experiences a positive secular growth rate[.]

9.4: Is there a market mechanism that brings saving and investment in line with one another without at the same time having perverse effects (e.g. widespread resource idleness) on the macroeconomy?

Some macroeconomists would answer the critical question in the affirmative, taking the market’s allocation of resources to the production of consumption goods and the production of investment goods, the later financed by saving, to be on a par with the market’s allocation of resources to the production of fruits and the production of vegetables.

[T]he Keynesian theory precludes by construction any possibility of there being a trade-off of the sort emphasized by the Austrians.

There is simply no scope in the Keynesian vision for investment to rise at the expense of current consumption. Similarly, market participants willing to forgo current consumption (i.e., to save) in order to be able to enjoy greater future consumption would find their efforts foiled by the market mechanisms that link saving and investment.

The more favorable credit conditions brought about by the increase in saving is the basis for the rest of the story.

Consider, say, a tenth-order good in the form of durable capital equipment. Testing facilities and laboratory fixtures devoted to product development are good examples. More favorable credit conditions could easily tip the scales toward creating or expanding such a facility. In early stages of production, the time-discount effect can more-than offset the derived-demand effect.

Contrary to Keynes’s paradox of thrift, consumption and investment can move in opposite directions.

“Mr. Keynes’s aggregates conceal the most fundamental mechanisms of change.” (Hayek, 1931) It is significant that those fundamental mechanisms are set into motion by the supply and demand for loanable funds—because it was loanable-funds theory, a staple in the pre-Keynesians’ toolkit, that Keynes specifically jettisoned.

9.5: With their incomes they engage in consumption spending, laying claim to most-but-not-all of the output that they have collectively produced. The part of income not so spent, that is, their saving, bears a strong and systematic relationship to the part of the output that is not currently consumed. These unconsumed resources can be made available for increasing the economy’s productive capacity. In a market economy, there are a number of different financial instruments (bank deposits, passbook accounts, bonds, and equity shares) that transfer command over the unconsumed resources to the business community.

What if some income is neither spent on consumption nor offered as funds for lending? That is, what if people—unexpectedly and on an economywide basis—prefer to add to their cash holdings? The increased demand for cash holdings would constitute saving in the sense of income not consumed but would not constitute saving in the sense of an increase in the supply of loanable funds.

An exogenous change in money demand is rarely if ever the source of a macroeconomic disruption. And an occasional dramatic change in liquidity preference is more likely to be a consequence of an economywide intertemporal coordination failure than a cause of it.

9.6: Hence, if capital depreciation just happened to be equal to the gross investment, the economy would be experiencing no economic growth. Typically, depreciation will be something less than gross investment, and the economy will enjoy a positive growth rate, the frontier itself expanding outward from period to period. In the unlikely case in which gross investment falls short of depreciation, of course, the economy would be in economic decline, the frontier shifting inward from period to period.

A major focus of Austrian theorizing is on the market mechanisms that allow for such movements—and on policy actions that lead to a disruption of these mechanisms. ... It also entails a growth rate that is consistent with intertemporal preferences.

9.8: Suppose that in circumstances of a no-growth economy and a natural rate of interest of ieq, people become more thrifty. ... With the resulting downward pressure on the interest rate, the loanable-funds market is brought back into equilibrium.

If we understand the saving that gave rise to the capital restructuring not as a permanent reduction in consumption but rather as an increased demand for future consumption, then we see that the reallocations are consistent with the preference change that gave rise to them.

But with reduced consumer spending and no change—and certainly no increase—in investment spending, the economy has fallen inside the production possibilities frontier.
NOTE: This is in reference to Keynes "paradox of thrift" and refers to what Keynes thought would cause a recession (he did not believe investment spending would increase).

9.12:  Deflation, like inflation, is a secondary issue in the Austrian literature. Growth-induced deflation, that is, the decline in some overall price index that accompanies increases in real output, is considered a non-problem.

Deflation caused by a severe monetary contraction is another matter. Strong downward pressures on prices in general put undue burdens on market mechanisms. Unless, implausibly, all prices and wages adjust instantaneously to the lower money supply, output levels will fall.




I think there is some pretty thorough analysis here of the different mechanisms between the Austrian and Keynes schools of thought on economic growth. However, all of the Austrian ideas consider that saving drives investment. This is, at least at this point in time, most certainly not the case with Bitcoin.

How then could the two posts I quoted initially be accurate? How can the market find a real interest rate, or at least an acceptable one, when so much investment opportunity is hoarded rather than lent? According to this analysis, there would be economic recession. Since Bitcoin is currently such a small market, I think that implies a lack of any avenue for real growth.

This analysis claims that this would be the fault of economic policy or a problem with the market--"dramatic change in liquidity preference is more likely to be a consequence of an economywide intertemporal coordination failure than a cause of it." Does Bitcoin have an inherent intertemporal coordination failure?

How's about some real discussion.

Oh wait, not a single one of them have an article about the condemnation of free speech by the most populous state in the union.

http://www.huffingtonpost.com/stephen-zunes/california-state-assembly_b_1842841.html

The California State Assembly has just passed a bipartisan resolution (HR 35) by voice vote which constitutes a serious attack on academic freedom and the rights of students and faculty to raise awareness about human rights abuses by U.S.-backed governments. While purporting to put the legislature on record in opposition of anti-Semitism on state university campuses, it defines anti-Semitism so widely as to include legitimate political activities in opposition to Israeli government policies.

Isn't that just a touch odd?

[ABSTRACT:]

4/27/13: PLEASE SEE THIS THREAD: https://bitcointalk.org/index.php?topic=189239.0


Decrits is a continuation of my proposals for Encoin, but with many significant new ideas.

ABSTRACT:

•   Decrits will work to keep a relatively stable value over time by having an unbounded coin production that is related to the time, hardware, and energy costs required to produce new currency.
•   During periods of instability due to market expansion or technological leaps, Decrits will create new currency freely based on what is being minted for cost and distribute it to existing account holders and those who transact on the network to quickly bring back stability. This has the beneficial side effect of giving profits to the people that use the currency rather than wasting it on hardware manufacturers and electric companies.
•   Decrits will use a proof-of-share system for network security entirely in lieu of proof-of-work. No energy is required to secure the network other than transaction verification. Proof-of-work is only used to create new currency. Transaction fees are paid to shareholders.
•   Decrits will ensure that transactions are typically secure from double- or bad-spends within seconds. See the Security section.
•   Decrits will use an account ledger rather than a transaction ledger for keeping track of balances. This will result in a standard transaction being about one-third the size of the smallest common Bitcoin transaction, and 5-10x+ less than Bitcoin transactions with many inputs. It also means that the entire history of the network need not be stored or pruned as it is already in a compact format.
•   Decrits will reward early adopters by giving away multiples of minted currency, such as 5x or 10x what would normally be minted. Early adopters will also be in the position to benefit for some time off of early purchase of shares as described in the Security section. While the project is in development, coins may be pre-awarded to people who make large and small contributions to its development.
•   Decrits will incentivize being a transmitting node for the network by paying a small portion of the network transaction fees for the service.

•   If a loaf of bread costs 1 DCR in 2012, then a loaf of broad will cost 1 DCR in 2050, assuming the production costs of bread and money have not changed. If the production costs of money have changed to where a loaf of broad costs 2 DCR in 2050, then 1 DCR saved from 2012 will be about 2 DCR in 2050. See this post for an explanation.


Please note that all of these ideas are up for discussion and if this ever became a reality I would hope for some heavy debate on how exactly to tweak many of these features to ensure a well-oiled currency.


SECURITY: PROOF OF SHARE + TIME-BASED REPUTATION

Users of the network may opt to buy a network share in return for receiving a portion of network transaction fees. The money used to buy these shares is locked and cannot be used for regular transactions. Each share lasts for a 1 year period that automatically renews unless the shareholder declines to renew within 30 days of that renewal. There is no limit to the amount of shares that may be purchased. Once a new share is purchased, there is a 3 year probationary period where the shareholder's reputation does not increase. After the 3 year probationary period, reputation will increase by up to 3 times the initial amount over an additional 3 year period. Percentages of transaction fees are awarded based on the shareholder's reputation compared to the total network reputation.

The probationary period exists so that long-standing shareholders are rewarded for continuing service to the network. It also makes one-shot monopolistic takeover attempts take much more time and be much less profitable in the interim. (And probably a futile endeavor to begin with, see the voting system section.)

Anyone owning shares will be selected based on predetermined orders that change every so often to put together a list of transactions over a 10 second period. Since only the specific share owner is allowed to create a transaction block for a specific time period, any transaction seen in these blocks can be considered double-spend proof as long as the network is ordered properly up to that point. e.g. the blocks are in order and are all available.

Advantages over bitcoin: No energy is required to secure the system other than transaction verification. Any shareholder attempting to approve a bad spend or create more than one block per time window will lose their share. Even if an evil entity owns 99% of the shares, they cannot approve a bad spend or have the same shareholder attempt to recreate an older block as this can all be proven and honest shareholders will destroy their shares and prove to the clients which network is honest.
Disadvantages: It is a much more complex system. However, not requiring energy or investment in expensive hardware is a significant advancement. Share holders will have to remain online at all times.


MONEY CREATION

The money creation system is still a very tentative idea. Money creation starts with a big block of coins available to be minted based on the amount transaction fees over the last year (with a large minimum amount), divided by 12 to get a base line. Each minter creates coins individually. To begin minting coins, minters must put their name into the coin minting queue which must include a proof of work equal to 10% of the standard coin award's value (e.g. if each user is assigned to mint 2 coins, he must give a solution equal to 0.2 coins to join the queue). Once enough minters have joined the queue, minting can begin (this formula will be based on the total number of coins available to be minted for this block). When minting begins, the cost of the solution to join the queue will drop to 7.5%, and after a significant portion of the coins have been mined (25% or so), the cost to join will drop to 5%.

When the block begins, only 50% of the queued users will be selected to create coins. While each minter creates coins individually, they are assigned together with a group of 39 other minters with which they compete. The first 10 users in each group will receive a slight bonus to their award, and once the 10th solution is given, all 10 users will be assigned to new groups to create more coins. This process continues for each set of 10 except that the 3rd and the 4th set of 10 are only added back to the queue and not immediately given a new group.

Overall, this system encourages minters to be just slightly better than average. Go too fast, and you wait for the other 9 members to find solutions. Go too slow, and you can be penalized. You can of course join the queue multiple times with a fast system, but you may be selected more times than your system can currently handle. Go really slow (over 3 standard deviations or whatever testing seems fair) and you will be booted out of the queue and lose your 0.2 coin investment.

Coins will not be deposited into the minting accounts until after the entire block of coins has been minted and they will be awarded over time based on the days that the coins were mined (e.g. if it took 10 days to finish a coin block, coins minted on the 1st day will be deposited on the 11th day, 2nd on the 12th, and so on). This is for two reasons: difficulty adjustment and the coin multiplier. The difficulty will be adjusted after each block and given a weighted adjustment based on the last 10(?) difficulty changes. Difficulty only goes up, never down. The difficulty will be adjusted by dropping the top and bottom 25 percentiles and comparing the change of the middle 50% to the last block. Once this is calculated, the value of the awards will be reduced accordingly. E.g. a 10% increase in difficulty means that a 2.0 coin award would be reduced to about 1.818 coins (100/110% * 2.0). This prevents a serious upset to the money supply if, for example, someone discovers a way to double the speed of the hashing algorithm.

After the bootstrapping period is over, by default each coin block will be multiplied by 5x to all existing accounts and by 5x as a lottery to transactions that happened during the minting period. Existing accounts will earn interest based on their proportion of coins to the existing total with the smallest 0.5-1% of accounts being dropped to avoid excessive tiny calculations and transactions will be randomly selected to award either the sender or receiver with free money (this will occur in a way that can't be gamed--if the payout for a tx with a 0.01 tx fee is selected to receive 1 coin, the odds of it being selected will be 1/101). What this does is reduce the actual amount of energy spent in creating new money so that the people using the money profit instead of the electric company. Additionally, as more efficient hardware arises over time, existing users will see their account balances increase as the value of an individual coin may reduce in value over time.

There is no limit or timeframe to the number of coin blocks that can be created. When one is finished, a new one can begin as soon as there is the minimum required minters. The block is a starting and stopping point to adjust difficulty and begin awards and so on.

Because only a small amount of currency is created via minting and there is a large startup cost (the 0.2 fee times however many it takes to begin a block), investing in specific technologies like ASICs will be unlikely to bear fruit; rather, commonplace, sunk equipment costs such as GPUs will win the day. Massive amounts of money do not need to be wasted on always one upping someone else to get a larger share of the same sized pie. If it is generally profitable to create coins, people will mint; if not, they won't.

CAVEATS: There are some significant caveats to this system that would probably be solved quite efficiently in the future. There may be large periods of time where the minting computer is inactive but must be monitoring the network. This is wasteful. However, this is mostly countered by being a CloudNet member described in the next section. Additionally, if 1 coin approximates about 50 computer hours, it will be a fairly common event for the average computer to take 150 hours or more to find a solution, or almost a week. This is not ideal. However, it would be possible for some very complex pool designs to efficiently smooth out this process--but joining a pool will only be a matter of convenience, not necessity. Also, having each user create their own blocks will be data intensive, but it will most likely be equal to or greater than typical bitcoin efficiency when P2Pool becomes the dominant form of mining (which I think there is no doubt).


PAYING FOR THE NETWORK

With each coin slated to be on the order of about $1 USD/EUR/GBP to produce (based on semi-wild ass guess), the initial transaction fee is set at 0.01 DCR or 0.01% of the transaction, whichever is greater. The receiver pays the fee in the same vein as paypal or credit cards. The percentage fee is necessary to account for the potential reduction in value of an individual coin while keeping transaction fees in line as well as keeping Decrits banks of the future from settling up accounts between each other for 0.01 DCR at the end of the day and removing the incentive to be a shareholder. Shareholders split all transaction fees in accordance with their shares, with 5% of the transaction fees going to the CloudNet, or the group of users that send and receive transactions for the network.

CloudNet members sign into a queue similar to the coin minters. To join this queue, a small, refundable deposit will be required. This allows any CN member who attempts to be deceptive to be punished. Anyone wishing to send a transaction or simply just receive a copy of network traffic can connect to a CloudNet peer based on the available list. To send a tx, a client will add a 3 byte CN peer code to their transaction so that that peer will receive credit for the transaction. They may send it to several peers and whichever has it included in the transaction block will receive credit. At the end of the day, the top 50% of CN peers based on number of transactions confirmed will receive evenly the 5% of transaction fees. Since the fees are spread evenly, there is less incentive to game the system.

Several other services will be available on the network that will have fees and these fees will be distributed in the same manner.

CN members will sign (or offer to sign) communications. This holds them accountable to losing their deposit for being malicious. It may also help prevent malicious software from compromising a share holder (maybe). It will make man-in-the-middle attacks on merchants nearly impossible.


VOTING SYSTEM

The voting system is a bit sketchy at this point, but essentially there will be several, non-network breaking things that may be changed by shareholder vote such as adding a new signature algorithm. These votes will require a 75% majority to pass. A vote that changes significant portions of the network operation will require a 90% majority to pass. There are a lot more details on my ideas for this on the notes page. Some sort of code-neutral system will have to eventually be organized by the community to ensure that each future client can be properly prepared and so on for a code change.

It is my opinion that the network must have some ability to quickly coordinate and properly organize a network protocol change in the face of a serious problem without direct developer intervention. Additionally, if some malicious entity does gain control of a large portion of the network reputation and attempts to do something malicious, even a small percentage of shareholders will be able to divorce from the network via the vote. If this happens, all existing accounts will be unable to receive transactions until they either declare an allegiance or create new accounts specific to one side or the other. Existing accounts will be able to send money to the new accounts or declared accounts normally for a period of 30 (?) days until the divorce becomes final. Any undeclared accounts will remain on the unchanged side of the network. Shareholder money and reputation on each side will be destroyed if it has voted the other way. The fact that this option for the network to peacefully divorce may prevent any attack of this type from ever forming, and divorcing will only be used when there is a real point of contention, such as if a large majority of the shareholders decide to raise transaction fees unnecessarily.


BOOTSTRAPPING

There will not be a coin multiplier until after the first bootstrap period (there would likely be several stages). Initially there might be a 5x coin award to minters for the first 3 years. These coins will be awarded immediately, not after the entire coin block is finished. This is to keep any momentum in the currency from stalling when it is still taking baby steps. But before even that, I would hope to have an extensive beta testing period and use the message boards to award people future coins for finding bugs or suggesting good ideas and so on and actually have a community based project instead of one that was produced behind closed doors and released with zero public discussion on any of its properties.

Consciousness stream: http://pastebin.com/33uYZ1MS  I apologize for the terrible ordering and the fact that ideas are all over the place, but I've noticed from going back to my old notes that I was able to regurgitate old ideas into new ones that I had long dropped as a bad idea. Please note that this forum post should be considered my preferred ideas if there are any clashes with the consciousness stream.

A backup of the Encoin wiki is available here: http://justinbporter.com/encoin/doku.php but this is not my site and I can't guarantee that it will remain available.


TECH STUFF:

This stuff was all mostly fine-tuned from designing the encoin proposals. Peers of the network will all use a superhash of everything called the Consensus Block (CB) to maintain network consensus on the ordering of events. Connecting each CB together are about 8,700 transaction blocks which are created approximately every 10 seconds by share holders in a semi-predetermined order. NTP pool is used to keep reasonable time synchronization across the network, and clients include a timestamp in the transaction. Shareholders will use this estimate their approximate latency based on when they receive them, and will wait that much time (to a point) before sending its block for the 10 second time period. Transactions won't get duplicated in nearby blocks since each shareholder will only include transactions in the proper time window (with exceptions if transactions have been obviously missed and so on). This encourages people creating transactions to be honest about time for quickest inclusion into the chain. After each assigned shareholder creates a transaction block, other share holders will have been predetermined to sign that block plus any transactions that were missed. The next block will ack these signatures and the extra transactions. The more share holders there are, the more that will sign each block to keep network consensus times down. The extra signatures should be dwarfed by the overall transaction activity of a healthy network.

Account ledger uses a 5 byte number for 256*4.3B maximum accounts. The address space is infinite as any number of DSAs can be used. All transactions refer to account numbers (where possible) rather than addresses to save a gigantic amount of data. Clients do not need to maintain much history other than the state of the shareholders from the last time it connected. Then it can download the share holder history portion of the CB, and download enough current data (along with shareholder signatures) to convince it that this is the correct network. How much shareholders and cloudnet peers need to hold is up for debate, perhaps 1 years worth, perhaps less. Full copies can't be forged and it will be available somewhere.

[Difficulty]

Resolved: Design a cryptocurrency based off of Bitcoin where the purchasing power in any given account remains relatively unchanged over time

Difficulty

• The number of coins awarded per block is based on the difficulty (for example: difficulty / 4)
• The number of coins awarded based on the difficulty does change as a factor of time (on a per block basis) to primarily take into account "Koomey's Law" where the number of computations per joule of energy dissipated has doubled approximately every 18 months.
• The difficulty typically does not go down, only remains the same or rises.

Taxes, Fees, and Bonuses

• Transaction fee: to put pressure on network security and creation of new coins, all transactions will carry a mandatory transaction fee of 0.25%, with a minimum of 0.05 coins and a maximum of 2.0 coins. These fees are destroyed.
• Flat tax: If over a significant number of blocks, the block creation rate averages over 20 minutes (vs. the 10 minute goal), a 1% flat tax will be applied to all existing coins and difficulty will be reduced by 25%.
• Coin bonus: For each new block of coins, every existing coin will gain a small amount of interest so that the total of all interest earned will be equal to the total amount of new coins created.

Bootstrap

• Merged mining: Merged mining with Bitcoin to promote initial interest. A clean break several hundred thousand blocks down the road.
• Coin award multiplier: 2x, 1.75, 1.5, and 1.25 multipliers for the first X blocks to encourage early adoption.

Blockchain Defense

• Heuristics: All clients agree that competing blocks will have priority weight based on number of transactions, average age of coins in transactions, and other factors.
• User interaction: Users will be notified of odd behavior occurring or competing block chains and will be encouraged to investigate.

The coin bonus is used as defense against attacks on SHA-256 or something similar to the CPU->GPU change in the block chain to cause minimal long-term disruption. Since the distribution of coins is not limited, coins earned in the "harder days" will not lose value (over time) as those account balances will increase.

The flat tax is used as defense against a shrinking (or non-growing) network to maintain transaction confirmation stability. Additionally, those with wealth in coins will be pressured to partake in the security of the network to avoid the tax if necessary.

Heuristics' use may be complicated, may be easier than it seems, but it will help prevent or eliminate 51%-type attacks. Since coins are not limited and coin awards are doubled (via coin bonus) it is expected that less demand for new coins will exist under this system, therefore it must have more than no protection at all against 51% attacks.

Other notes: for the first several thousand blocks, an initial account will make a transaction every so often that must be included for a block to be valid (to prevent "small penis big operator" merged mining take over). P2Pool will be included with the software to discourage traditional pools. Flat tax and coin bonus will probably not apply until after a large number of blocks have been mined to promote initial stability. A separate cache will be maintained on clients to keep track of flat taxes and coin bonuses so that it is easy to compute and verify an old amount to a new amount in a transfer (this is when coin bonuses and flat taxes will actually be realized, but the client will adjust the amount as necessary). Transaction fees could potentially be reduced or eliminated (especially for microtransactions) if the receiver is a miner in a block. Special transaction type to transfer coins to the next major version (potentially something like Encoin).

While the stability of value in one actual coin will vary over time, an account balance should maintain similar purchasing power and in fact a ratio of inflation/deflation would be easy to calculate over time and merchants may use this to automatically adjust pricing; employees/employers could potentially use it for consistent salary negotiation.


Thoughts, comments?

I don't care to argue how many bitcoins satoshi may or may not have. I don't care to argue the pros or cons of inflationary vs. deflationary.

I am sick and fucking tired of the world being manipulated by the powers that be. It isn't about wealth, it is about control. It is about debt-based economies that keep the middle and poor classes under its boot and stifle humanity.

I want the world to be a better place, and I truly believe that central banking is at the core of war and famine. It is hilariously sad that the "richest nation in the world" has 47 million people in poverty.

I find it strikingly odd that 3 US presidents who were vehemently opposed to central banking were assassinated. A 4th, Jackson, had an attempt on his life.
I find it disheartening that my fellow citizens and I are manipulated into believing that leaders like Muammar Gaddafi are evil and worthy of assassination; when reality shows that the people of Libya were wealthy and happy. Digging an inch below the surface reveals that he was bucking the central bank system, and the powers that be simply could not allow that--not in a country that produces oil.

I want an explanation for why the creator of this brave new economy chooses to remain anonymous. I want an explanation for why so many of you believe that his intentions were libertarian. I want an explanation for why the currency was designed to give so much power to a bourgeois "first come" rather than striving for neutrality of value. Encouraging nouveau-riche adoption is an answer, but it's a terrible one far removed from any notion of liberty.

Yes, this is another "you're jealous and envious" thread; words oft-bandied lately in America over taxation. Except I am jealous and envious of the fact that I believe a cryptocurrency with real libertarian ideals would have moved away from the status quo I see everyday. I am jealous and envious of the fact that I see the spark of revolution in Bitcoin, yet it is clouded by the same unscruples that power the world economy. I am jealous and envious of what Bitcoin could have been, but isn't. I see a system that is easily manipulated by those with wealth; I see more of the same.

Sure it's great to fight against the man, but if we are only exchanging one man for another, what have we really accomplished? The only real value I see in Bitcoin is that it can be forked by the will of the people in the face of oppression. However, overthrowing oppression is foundation of the United States, yet I see very few people willing to rise against the establishment today; why would Bitcoin fare any differently in the future? Would those in power allow this to happen? They will surely fight tooth and nail against it. People don't choose to be oppressed. Why would I choose to use a new currency that is more of the same? Because right now it seems like a better option? That isn't good enough for me. Because if I buy in right now I get to be more powerful than those that follow? Then I would be contributing to the system that I loathe.

Do we just accept that Bitcoin is merely a stepping stone on the way to a real revolution? A beneficial hiccup on the road to bringing the power back to the people? Then why don't we discuss the endgame rather than moving decimal places? Why is half of the mental energy devoted to Bitcoin based on profit? Why can't 100% of that mental energy be devoted to truly overthrowing the control that little pieces of paper have over us? Is your personal comfort more important than the oppression of the world? Are you just another hypocrite?

Are you just another hypocrite?

The primary goals of EnCoin are as follows:

•   To maintain a relatively stable cost-to-produce where 1 ENC costs about 1 ENC to produce.
•   To maintain a relatively stable exchange point where the effects of price inflation or deflation are smoothed out by economic and monetary policy.
•   To provide a stable currency that merchants and the people can rely on in value, security, and dependability.

Some features:

•   10 second initial verifications that debit the "from" account and are pretty much impossible to reverse.
•   No bloated block chain, only a tiny file that is updated once a day that stores account balances and other information. Detailed info (such as specific transactions) is available on request.
•   Mandatory transaction fees are partially refunded to merchants by securing the network. Hashing power only creates new coins.
•   Any transaction fees not refunded are paid as interest to all holders of ENC.
•   Bandwidth usage becomes more efficient as the network increases in popularity.


edit: A backup of the encoin wiki is available here: http://justinbporter.com/encoin/doku.php but it is not my site so I can't guarantee that it will remain available.

PLEASE SEE REV4: https://bitcointalk.org/index.php?topic=49683.0

Since this version is completely revised and much more professional (except for section 12) and it has incorporated much of the discussion from the previous thread, I have created a new thread so that the discussion focuses on the new proposal and does not get lost in the mix.

The primary goals of EnCoin are as follows:

•   To maintain a relatively stable cost point where 1 ENC requires about 10kWh of electricity to produce.
•   To maintain a relatively stable exchange point where the effects of price inflation or deflation are smoothed out by economic and monetary policy.
•   To provide a stable currency that merchants can rely on in both value and security.
•   To use smaller, decentralized hubs that support themselves rather than relying on large pools of computational resources.
•   To make use of a reputation system so that the EnCoin Network is not vulnerable to a 51% computational attack or network subversion attack.

Document: http://www.mediafire.com/file/ghmb81e79msy63a/EnCoin%20Proposal%203.0.1.rtf
Pastebin: http://pastebin.ca/2085821   (lol the real pastebin took down my submission, they must work for bitcoin)
google docs: https://docs.google.com/document/pub?id=1voi9j2kNgwdh0Y56r-9zSC5Bv6tOWwJ4X1OiBvFUAw4

I highly recommend downloading the document so that the formatting is preserved.

IRC: irc.freenode.net #encoin

The previous thread can be found here: https://bitcointalk.org/index.php?topic=44682.0

This was designed from input with several members of this forum. If you think you can help, please email me at the address in the proposal.

It addresses early adopter, 51% attack, double spends, trust, transaction times, and various other issues. It is a work in progress and is only a design document without much hard data to back it up. However, I believe everything discussed in the proposal is possible. The bootstrapping process hopes to succeed by awarding both EnCoins and BitCoins for the same work.

Link to the document: http://www.mediafire.com/file/kpe2fibudg8yfrr/EnCoin%20Proposal%202.3.doc
HTTP link (does not format well in IE): http://pastebin.com/czquukGX

Some talking points:

* EnCoin is based around a constant cost to produce, approximately 10kWh of electricity. In contrast, a BTC's cost to produce has increased by a factor of 2,250 from the 1st to the 7.3 millionth.
* Transaction fees that destroy currency create new demand on existing coins, rather than an ever increasing cost to produce. The fees are required, and they do not go back into the mining pool.
* Supply and demand determine the final sell price, but the network is designed so that it will always be moving back towards an equilibrium where a sell price is the cost to produce plus a reasonable profit margin. As fiat currency inflates, so will the value of EnCoins, so it is a "safe" hedge against inflation. This happens because producing new EnCoins will cost more because 10kWh of electricity is more expensive.
* Initially, EnCoin will award both EnCoins and BitCoins for performing work on the network. It is possible to piggy-back on the BC network, and EnCoin will do so until some time down the road.
* In lieu of dangerous pools, EnCoin has smaller "Network Trusts" that are formed. These Trusts mint coins non-competitively. They agree on what has happened to the network once a day. Agreement is not based on computational power, but by a system of trust.
* Transactions are able to be approved and re-spent in under 1 minute. More likely than not the network will support 15-30 second transactions.
* Only the most recent block in the block chain is required for a client to be up to date. EnCoin stores the balance of every account in each block. While this may sound like a lot of data, it is much more efficient than storing the entire history of every divisible piece of coin that has ever been used. (My gross estimate is about 10MB for every 500,000 accounts--updated once per day.)

2011/09/21 V2.2 UPDATE: Added more technical details and potential issues.
2011/09/23 V2.3 UPDATE: Moved some of the technical details into the main proposal. Network Trusts, Transactions, The System of Trust, Anonymity, and Why EnCoin have been updated.

IRC: irc.freenode.net #encoin