[This post is idle speculation.]

Ripple was born in this forum, so it seems appropriate to discuss its future here.
Bitcoin without mining
Re: Distributed Bitcoin Exchange

NOTE: This post is idle speculation. Please treat it as such. I do not work for OpenCoin. I have no privileged information that doesn't come from forums or OpenCoin web sites
--------

So the other day I was trying to explain how OpenCoin might not actually be XRP speculators (as is the common wisdom). My basic guess was, maybe OpenCoin plans to just sell XRP to other companies so they can use XRP to activate their user's Ripple accounts. Seemed a plausible expedient way to see some substantial ROI. Then ahbritto posted something that has been nagging at me ever since.  Re: XRP Ripple money what advantage ?

In the federation model, even with a million end users a gateway would only have two accounts: the hot and cold wallets.
Further, end users can remain completely ignorant of Ripple: XRP, trust, reserves, offers, the client.

Later while reading this thread, virtual currency trading wars bitcoin versus ripple xrp
I run across a web article that concludes:

Should Bitcoin believers be worried that Ripple is on its way to crush their dream currency? Absolutely not. Interest in Bitcoin will continue to grow, and separately, interest in Ripple will continue to grow. In fact, the Ripple network should help make bitcoins substantially easier to buy and sell, as well as legitimize them. Our take on it is that XRPs will primarily be held by institutions, while bitcoins will primarily be held by people. On a transactions level, XRPs will primarily be used in money transfers between institutions, while bitcoins will primarily be used to store wealth and buy things. If you’re a trader, you should be long term bullish on both.

Normally I would just dismiss that out of hand, EXCEPT I noticed a comment by JoelKatz on the article.

I’m going to start pointing people to this. It does a better job of explaining Ripple than we’ve been doing.

--- Begin Idle Speculation -----

So maybe, XRP and Ripple Accounts aren't designed for us after all. Maybe OpenCoin is starting to see Ripple as simply THE GLUE between other financial services providers. Basically, a peer-to-peer international version of the Automated Clearing House (ACH).

Please note that in this vision, we (currency users) are NOT the peers in BitCoin's sense of P2P. Nor are currency users even necessarily Ripple address/account owners. We might simply be Google Wallet users sending money to users of (China's version of PayPal). Or Dwolla users buying Zynga freemium upgrades. The actual Peers would be "federated" companies like PayPal, Google Wallet, Dwolla, FaceBook, Zinga, XBox Live, etc. Basically anyplace where users can have accounts and any type of currency or credits. The Ripple System just handles the inter-company exchanges and currency conversions. (Send $10 from google/sourceID to dwolla/destinationID.)

This concept substantially reduces the scalability issues inherent in Ripple ledger maintenance and consensus building. It also creates an pretty substantial business model for OpenCoin's XRP stash. They become the inter-currency market-maker by using their XRP as intermediate currency.

Note that being a "market-maker" doesn't require speculation. OpenCoin would make money on the ask/offer spread. Notice that if you want to exchange $1,000,00 USD for its equivalent in OTR (other) and you use XRP as an intermediate currency. Then there needs to be $2,000,000 USDs worth of XRP liquidity in the marketplace in order to determine a price.

USD/XRP (OpenCoin sells $1,000,000 worth of XRP at "ask") 
XRP/OTR (OpenCoin buys $1,000,000 worth of XRP back at "bid")

Big companies exchanging currencies don't have to care what the actual price of XRP is. They only have to care about the overhead inherent in the spread. Normally, market speculation keeps the market spread small. But conversely, if OpenCoin keeps the spread small on their own, it reduces the incentive for other speculators to even try to compete.

------
So I see two possible Ripple Systems.

Ripple 1.0 - The Ripple I presumed was being built. An improved version of BitCoin, with faster transactions, low volatility and much improved usability. But one that kept BitCoin's essential P2P vibe. "We users, are creating, owning and trading currencies AMONG OURSELVES."

Ripple 2.0 - A Ripple that seems much more appealing to venture capitalists. One where increased interoperability and reduced costs provide a, hopefully, compelling new feature to an existing user base. "This company I'm funding can inter-trade with these other companies you're funding. Our users will pay extra for convenience."

I guess the open question is, "Should any of this matter to me?"
Does it matter to you if Ripple becomes version 2.0 instead of becoming 1.0 first?

I need to choose a Ripple Gateway trustworthy enough to hold $10's of USD for me while I test out Ripple. I have no experience with any existing BTC exchanges/counter parties.

So my open question is? Who do you trust? Tell me your GOOD experiences? No flame wars please.

I've been researching Ripple. It's ledgers (blocks), transactional model, INSTANT commits, consensus building, scalability, etc...

If you read their wiki it should be obvious to the casual observer that Ripple is *Coin 2.0. There is just no question. I has every desirable bitcoin system/code improvement we've ever discussed in a StableCoin/EnCoin/GEM/Decrits thread. In the future every new coin will be a fork of the Ripple codebase. It's just better in every way.

On top of that, OpenCoin has built a business called Ripple. In that business they use XRP to control spamming the blocks/ledgers. See Ripple "Reserves". They also use it for internal accounting. They also it for things that other threads have called "Colored" bitcoins. In ripple you can have IOUs, keep track of your Dollars separately from your Euros. Send Dollars from one address to Rupees at another address.

The transaction creating system (client) finds the best rate in the ledger. Exchanges denominations in the ledger. Delivers the money in the ledger. Everything is completely 100 percent distributed, secured, anonymous and trustworthy.

The one thing that's not really their primary use case, however, is storing stable value in XRP. Those values are intended to float around. XRP are not StableCoins in the sense that we've been using that term. But it doesn't matter because the system trades from dollars to XRP to rupees in a single transaction. It doesn't need to "hold" XRP over any period in which the value can change.

Their is no reason that we/anyone couldn't build a StableCoin monetary policy using a fork of the Ripple codebase. (When available) But it's not completely clear to me if there is a long term reason for doing so. If you think the dollar sucks and is going to fail. Just send your money to Europe and store it there. Or China, or anywhere you trust a bank.

Don't trust a bank? Well I guess that's StableCoin's primary audience now.

Any thoughts?

I'd like to test out ripple just for the hell of it. If you are wondering why...

Way back in 2010 I proposed that BitCoin's intention was to be a Global kind of LETS system.

There has been much discussion on this site about how best to describe bitcoin to the uninitiated. Some people, favor currency metaphors, others alude to commodity metaphors. Others caution either of these as dangerous taunts to authority.

I posted the following in another thread and there was a suggestion that I write an extended article about my simile. It seems likely that my suggestion is as polarizing as any other. So to avoid any unnecessary aggravation, I'm soliciting comments in advance.

Any thoughts are appreciated.

------
I'd like to submit that I think the most apt description of bitcoin is that it is most like a Global Exchange Trading System (GETS) which is a variation on the LETS concept that isn't for hippies.

Descriptively it differs because it's community is loosely knit and global rather than an intertwined small-town. As such, there can be no commonly trusted party to operate and monitor the system, so that function is trusted to redundancy and mathematics. (block list)

LETS communities can rely on "local knowledge" of peoples historical behavior and intentions. As such it is perfectly reasonable for them to advance credit to people (negative balances) in certain situations. In a GETS community advanced knowledge of all parties and intentions is not practical or even preferred. As such, GETS operates on a zero credit policy. (no negative balances)

Also, since GETS trade globally, there is no "national currency" that can be used for equivalence. As such, GETS defines it's own unit for accounting purposes. Since this currency must necessarily vary against some national currencies, the LETS strict "no interest" principle cannot be preserved.

----
I think if people understood LETS they would intuitively understand GETS. The rest of the bitcoin details are just one possible GETS monetary policy.

Now, Ripple is proposing itself to be THE global exchange trading system. I think that has significant consequences for BitCoin.

So just to keep an Eye on the competitors, I'd like to push some ripple back and forth.

If anyone could send me some ripple, I promise to send it right back.
I've got a lot of posts on this site. Nobody has called me a scammer yet!

Thanks a lot for the help
Red

rHUipvsbBKagmU5qxFYCVfRoHKkBaYztm2

[SUPPORTERS, Please post a message introducing yourself]

Recent bitcoin price volatility has sparked growing interest in creating a "coin" designed to remain price stable over an extended period of time.

For speculators, it can be best thought of as a complementary currency to Bitcoin. When Bitcoin's value is rising, speculators want to hold Bitcoins. When Bitcoin's value is falling, hold StableCoins. Why not just let a "trusted" exchange hold on to your fiat currency while Bitcoin values are falling?... Really?... No sense enumerating all the posts on exchange fraud, hacking, closures, account seizures, etc.

IF a theoretical StableCoin existed, it would be possible to trade between BitCoin and StableCoin at will. All while remaining completely anonymous, even to the exchange that facilitates your trades. In addition, you wouldn't need to "trust" an exchange to secure your fiat, your coins or protect your personal information. Both sides of every trade could be done while keeping your coins securely in your wallets, in their respective chains.

At least that is the vision...

Currently, no stable bitcoin-like currencies exist. Over the past four years many individuals have kicked around promising ideas, but no social moment has every formed in support of a stable coin.

---------------

The point of this thread is to create a gathering place for people who SUPPORT the concept of a stable-value COMPLEMENT to bitcoin. This thread is NOT the place to bash the StableCoin concept or criticize its supporters. Nor is it the place to bash any particular BitCoin attribute or its supporters.

SUPPORTERS, Please post a message introducing yourself and please LINK any papers you've written or insightful posts you've made on the subject. Many people have hidden many insightful things somewhere on this forum. I'd like this thread to serve as a quick reference for any new supporters that might arrive.

The American phoenix is slowly rising again. Within five years or so, the US will be well on its way to self-sufficiency in fuel and energy. Manufacturing will have closed the labour gap with China in a clutch of key industries. The current account might even be in surplus.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8844646/World-power-swings-back-to-America.html

Woot! Go America Go!

This is my favorite!

It is almost the only economic power with a fertility rate above 2.0 - and therefore the ability to outgrow debt - in sharp contrast to the demographic decay awaiting Japan, China, Korea, Germany, Italy, and Russia.

It's high praise when the rest of the world looks at you like a bunch of geniuses because you remember how to BREED!
Come on smart people of the world! Do we need to teach you everything!
I guess that's why they created that industry in the San Fernando Valley. Educational films!

Anyone else fit into this demographic? I know I do.

The 53%: We are NOT Occupy Wall Street

I really do love the British, even if I don't even speak their language.

Could someone from the other side of the pond decode the nuances of "Death by Misadventure" for me? It has to be one of the best phrases I've ever heard. I've always though American's didn't lead adventurous enough lives. Now I'm sure of it!

British coroner Suzanne Greenway announced today that the 27-year-old suffered a "death by misadventure" on July 23, and that her passing was an "unintended consequence" of accidental alcohol poisoning.

British coroner Suzanne Greenway announced today that the 27-year-old suffered a "death by misadventure" on July 23, and that her passing was an "unintended consequence" of accidental alcohol poisoning.

http://www.eonline.com/news/amy_winehouses_cause_of_death/271628

I'm not really sure I know where I stand on this. Somebody please educate me.

The new rules will allow homeowners who owe more than 125% of the market value of their homes -- $125,000 in mortgage balance on a home worth less than $100,000, for example -- to get new loans.

http://money.cnn.com/2011/10/24/real_estate/housing_refinance/
http://www.nytimes.com/2011/10/25/us/politics/administration-proposes-changes-to-mortgage-refinancing-program.html?_r=1

Yes, I understand why we all want to help people. Helping people who need help is good!

However, if this plan was offered only to upper middle class white folks, clearly others would protests that it was crony FAVORITISM. Why should those people be allowed to borrow more than there house is worth? Shouldn't they have some skin in the game? What if they just take their cheap payments then default? Won't we all be stuck on the hook for their irresponsibility? But this time, stuck for 25% more than they were irresponsible for?

However, if this plan was offered only to lower middle class minority folks, we should surely hear protests of DISCRIMINATION. Why are you charging these folks a 25% premium on the value of their house? Shouldn't even poor folks be allowed to purchase their house for fair market value? Isn't it extreme social abuse to require these folks to pay 25% more up-front to own the same house that others can finance for much less?


A am truly not sure for which reason to dislike this proposed "solution" to our shared problem.

I mean if we are going to help people (and hence ourselves), shouldn't we start by not screwing people (and hence ourselves)?

I just notice the below block at http://blockchain.info/

http://blockchain.info/block-index/786604/000000000000003a857b3d977333cf16276af30d16ada38ac4f838d33ba4a206

Is it odd that someone found a block with 1 transaction in 1 minute with a target hash that is almost 16 times (4 bits) more difficult than the prior or subsequent blocks? Or is this just the luck of the draw? I understand random chance, just have never seen it so dramatically.

Seriously, has anyone noticed that the "Donate Bitcoins to..." trend is equivalent to the "Sell your Bitcoins now!" trend?

What do you think all of these people are going to do with the donated Bitcoins they receive? They are going to sell them ASAP for the fiat currency they need to sustain their (whatever).

If you really wanted to build the Bitcoin economy you would be telling people to buy Bitcoins to make use of their singularly unique properties. For example:

"Buy Bitcoins NOW! Then use your BTC to untraceably funnel money to your Washington lobbyists!"

If you hate lobbyists, how about:

"Say F*** You to Campaign Finance Reform! Use Bitcoins!"

or

"Need a building permit in a hurry? Bitcoin are the ultimate palm grease!"

I mean really, the best thing about corruption is there is a huge trickle down effect. You bribe one guy, and he bribes his minions, who bribe the minions of others. No need to rush back to the exchanges with each bribe.

You use this promotion plan and every bar and restaurant in Washington DC will be accepting Bitcoins in no time. Once Bitcoin becomes cool in DC, NY and Chicago are soon to follow.

As best I can tell 35.5% of all bitcoins have already been minted. These 7,473,950 coins are all property of existing bitcoin users. There seem to be about 41,280 registered members of this site. I'll be generous and say there are ten times as many bitcoin users as there are members. That means about 410,280 bitcoin owners with on average 18 BTC each. Clearly BTC ownership is more concentrated than this, but lets be egalitarian for the moment.

If we pretended all bitcoin owners were all Americans that is about 0.13% of the population. It's not of course. Bitcoin is intended to be a world currency. So 0.0068% of the world population own 100% of all current and at least 35.5% of all possible bitcoins.

The view on this forum is that the world will come to their senses, throw out fiat currencies and move to something rational like Bitcoin. This of course means 6,000,000,000 people basically begging to use a resource owned by a relative handful of people. Say we just minted up the remaining 13,526,050 BTC and scattered them to late adopters purely out of the kindness in our hearts. That means about 0.00225 BTC for each of them to use in rebuilding their economy. Sure 18 BTC on average doesn't make us feel very rich. But it is 8,000 times what everyone else would have if we stopped competitive minting today.

But we won't stop competing of course. Sometime around Pearl Harbor Day of next year Bitcoin will hit the 50% distributed mark.

----
By that day, how many active Bitcoin users and daily goods trades do there need to be to make a sustainable Bitcoin economy viable?
----

Because to potential new adopters, after that point Bitcoin is going to look like a new a 21,000,000 coin currency with a 10,500,000 coin pre-generation that went to the creator and his "friends". Certainly people will stop caring about Bitcoin long before they show up on our doorsteps with signs saying,

"We are the 99.9932%!"

[GEM Basics]

[edit]
I'd like to start a discussion about stable crypto-currency. I'm just trying to get a sense if anyone is interested in non-speculative coins. As an example, I've extracted the concepts from EnCoin and simplified them for discussion into a system I call GEM. It is based on creating coins using constant electrical cost (in joules) over time.

---

I've been working for two weeks trying to understand the details of Etlase2's EnCoin proposal. Originally I thought the idea of basing coins directly on kwh was impossible. There are simply too many hidden variables to make it possible to monitor an arbitrary peer's energy consumption.

I have recently adjusted my opinion from "impossible" to "plausible within constraints". I would like to discuss these constraints and the resulting economic and social dynamics.

However, I can't in good conscience suggest anyone go read the EnCoin proposal until the the next version is released. Etlase2 is a bit hostile to some of the existing bitcoin design decisions. Reading philosophy mixed with economics only serves to obfuscate the points I want to talk about.

As such, I want to distill his underlying concept (as I see it) into its most important dynamics. To reduce the learning curve, I'll frame my discussion around a theoretical bitcoin code fork (and new block chain) that I'll call GEM.

---

I want to put all the GEM dynamics into one thread. But, I don't want to cause an argument cluster-fluck. As such, I'll post the outline of where I'm going, but I'll post the detail sections one at a time. Meaning, if discussion survives the first, we can move on to the second. If not, discussing the second dynamic would be pointless.

=======

GEM Basics
Premise
Goal

First Order (Monetary) Dynamics
Basing GEM on electricity absent any GEM/$ exchanges.

Second Order (Economic) Dynamics
Springs and Shocks to smooth GEM value convergence.

Third Order (Social) Dynamics
Variation from the existing Bitcoin protocols.
- 10 Minute Timekeeping
- Block Chain Consensus
- Network Partitioning and Reconciliation

Fourth Order (Moral) Dynamics
Detecting Fraud
Outing Fraudsters

=======

I've been following Jonathan Haidt's research on the 5 foundations of morality for a little while now. He does a really interesting job of explain the differences between people based on 5 independent scales. He then shows how people who consider themselves conservative and people who consider themselves liberal tend to show similar patterns on these scales.

He gave a very interesting TED talk (20 min) where he explains the concepts.

http://www.ted.com/index.php/talks/jonathan_haidt_on_the_moral_mind.html

I my personal life, I find his hypotheses seem to match the people I meet on a day to day basis. They also hold for different sub-groups I tend to interact with.

The group that gathers on this forum however is a less common group for me. Most people don't consider themselves either conservative or liberal. Usually more libertarian and anarchistic. However, I still see certain tendencies that I think can be predictive of bitcoin's future success or failure.

I'm wondering if anyone is interested in taking his "Moral Foundations Questionnaire" and sharing your results here. This is not a questionnaire about whether or not you "have morals". Everyone has morals. It simply asks what types of issues you personally see as being morally important. You might consider other things important for personal reasons, but not moral ones.

For example, many people here would consider that owning personal property as being very morally important. The same people might not consider cussing in public as a morally significant decision. (my made up examples)

Anyway, if you are. Here is a link. I understand if you are not.

http://www.yourmorals.org/

There is real research going on so their tends to be lots of available questionnaires, but initial one is called the "Moral Foundations Questionnaire".

I'll post my results first.

I'll post my hypothesis about how this is related to bitcoins future success later, for those who are interested. :-)

Suppose I wanted to create a system like bitcoin, but I wanted it to have a value pegged to the dollar. Let's call it bitbuck. By definition, one bitbuck (BTB) would always trade at one USD.

In bitbuck's case "like bitcoin" means that it does all the accounting and verification a la bitcoin. But it DOES NOT generate new coins with each block. Instead, an *int max* account is created in the first block belonging to the "Central BTB Reserve". A centralized service would take care of moving BTB in and out of circulation.

It is easy to see that a central bank could work if it operated in the following fashion.

1. The central bank would sell BTB in exchange for paper federal reserve notes.
2. The central bank would alway deposit the paper in a safe "piggy bank". (100% reserve on-demand access)
3. The central bank would buy BTB on-demand in exchange for the FRN in the piggy bank.

That makes in a simplified version of PayPal. Except one with zero potential for profit. However, that also makes it a money transfer service with all the hassles that come from that.

But the key feature is people understand dollars. Both working for dollars and spending dollars for things priced in dollars. There is no extra "philosophy" to cloud acceptance. There are no exchange rates to check when comparing prices.

So that's obvious and uninteresting, so far. But the real discussion I want to have is:

----

What if in the above scenario, you replaced "piggy bank" with a bitcoin wallet.

So to be clear, someone buys a bitbuck and the dollar is used ASAP on one of the existing exchanges to buy the equivalent quantity of bitcoin at market rates. These coins are held in the central banks bitcoin wallet, which is just like any other bitcoin user's wallet. There is no special relationship between the two systems.

The benefit is that any merchant willing to accept bitcoins, automatically takes bitbucks as well. Since they probably already post an equivalent price in USD, they already have bitbuck prices listed.  (There are pricing issues worth discussing.)

There is potential for the central bank to profit in USD if the value of BTC rises over time.
There is a potential for loss if the value of BTC drops.

So in reality the bitbuck system wins by making bitcoin popular and loses if bitcoin fails to gain acceptance. (The risks here are worth discussing. And the likely necessity of a futures market for mitigating the risk.)

There has been much discussion on this site about how best to describe bitcoin to the uninitiated. Some people, favor currency metaphors, others alude to commodity metaphors. Others caution either of these as dangerous taunts to authority.

I posted the following in another thread and there was a suggestion that I write an extended article about my simile. It seems likely that my suggestion is as polarizing as any other. So to avoid any unnecessary aggravation, I'm soliciting comments in advance.

Any thoughts are appreciated.

------
I'd like to submit that I think the most apt description of bitcoin is that it is most like a Global Exchange Trading System (GETS) which is a variation on the LETS concept that isn't for hippies.

Descriptively it differs because it's community is loosely knit and global rather than an intertwined small-town. As such, there can be no commonly trusted party to operate and monitor the system, so that function is trusted to redundancy and mathematics. (block list)

LETS communities can rely on "local knowledge" of peoples historical behavior and intentions. As such it is perfectly reasonable for them to advance credit to people (negative balances) in certain situations. In a GETS community advanced knowledge of all parties and intentions is not practical or even preferred. As such, GETS operates on a zero credit policy. (no negative balances)

Also, since GETS trade globally, there is no "national currency" that can be used for equivalence. As such, GETS defines it's own unit for accounting purposes. Since this currency must necessarily vary against some national currencies, the LETS strict "no interest" principle cannot be preserved.

----
I think if people understood LETS they would intuitively understand GETS. The rest of the bitcoin details are just one possible GETS monetary policy.

As some might have noticed, one of the things that bugs me about bitcoin is that the entire history of transactions is completely public. I totally understand the benefits of how this simplifies things and makes it easy for everyone to prove coins are valid.

So this is not a suggestion for a change to bitcoin. Rather it is a question about what could be possible, and what couldn't be possible.

The general question is, could the block list be/have been implemented in a way that didn't store the full transactions in the list? Specifically, *perhaps* it would be possible to store only hashes of the in-points, out-points in the block list. These would be time stamped (notarized) in the blocklist exactly as is being done now.

The major difference is that it would be the coin receiver's responsibility to store the full transaction. And perhaps he might have to store previous transactions (X) deep to show history.

Then when he wanted to transfer the coins to the next party, he would create a transaction exactly as is being done now, except he would have to submit the antecedents to the transaction for validation as well. For validation, each antecedent of the in-points would be hashed and validated as existing in the block list. The in-points would be hashed and identified in the blocklist as not yet spent. Then the transaction would be validated as is currently done.

If everything validated correctly, the additional in/out-point hashes would be added to the block. This closes the transaction's in-points, and marks the new out-point hashes as unspent.

Once a node completes the block (by winning the hashing contest), he then broadcasts the block of hashes and the related transactions+plus antecedents to the other nodes for confirmation and acceptance.

as a rough example:

{block-9
 hash-a, hash-b, hash-c, hash-x
}
{block-12
 hash-a, hash-y, hash-c, hash-d
}
{block-17
 hash-b, hash-d, hash-e, hash-z, hash-f
}

{Transaction
 {in-points: hash-x, hash-y, hash-z}
 {address, signature and other transactions stuff}
 {out-points: hash-payed, hash-change
}
 
{generating-block
 hash-x, hash-y, hash-z, hash-payed, hash-change
}

So basically, if the i/o-point hash existed twice in the block list, it has been spent. If it exists only once it has not been spent.

So in after block-17:
  a, b, c & d are spent.
  e, f, x, y, z are unspent.

The transaction spends x, y & z and creates hash-payed & hash-change, so the transaction is valid.

After the generating-block:
  a, b, c, d, x, y, & z are spent.
  e, f, payed, change are unspent.


====
The Goal:

The goal is to provide all the same security of the existing system, but to avoid creating a public graph of every transaction that is easily correlated. In this case, the hashes don't even have to associate in the block. The block could simply sort all hashes in ascending order.

In effect, I want to create real gold coins. I can give my coins to you, but everyone in the world doesn't know I did. You can give them to the next guy and prove they are pure gold coins, because you have the pedigree of the coins AND every generation in the pedigree was notarized in the public record.

====
The Question:

Satoshi showed that you can remove transactions from the block list through the Merkle tree structure, without compromising security. I guess my real question is:

"What is the earliest you can remove the transactions?"

You could argue that nodes could remember everything anyway (the web never forgets). But if you structured the protocol so that new nodes would only receive a block list of hashes, they could only remember from this moment forward. That would give a little additional privacy. (Maybe)

====
Any thoughts? Is there an obvious way that people could cheat and get rich?

There are certain constants in BitCoin that could have initially been set to any arbitrary value without conceptual changes to the network. I'm NOT contesting any of these parameter choices as ill conceived. However, there are a lot of curious numbers used in BitCoin and I have no idea why.

I think it would be interesting to document why these choices were made as they seem to be at the heart of many questions that get posted to this forum.

I'll start the list with the parameters I can think of off the top of my head. Please feel free to add to the list.

----------------------------

21,000,000 BTC - Why 21 million and not 10, 16, 20, 25, 32. Just seems like a very particular number that is not divisible by 10 or an obvious power of 2.

2016 - Why does the difficulty adjust every 2016 blocks? Why not 2000, or 2048?

2 weeks - Why does the block adjustment map to a two week period? Why not every week or everyday?

10 minutes - Why do we want to generate a block every 10 minutes? Did this drive the above choices or is it a result of them?



50 BTC - Why a 50 BTC reward for generating a block? Why not 100?  Or Why not a relative value like 0.X BTC for each BTC transaction in a block or even X% of the existing coin base?

4 years - Why does the block reward reset every 4 years? Why not every year or every 5 years? Why does it decrease at all?

1/2 - Why does the block reward diminish by half each time? Why not decrease by 1 or 5 coins?

"Golden years" - Why choose to give out half of all bitcoins to whomever happens to show up in the first 4 years? Why not give out 10% or 100%? Did this drive the above or is it the result of the above?


BitCoin Addresses - Why use the hash of a hash (good idea!) for an address, rather than simply using the full public key.

Certificates - Why not store public keys as part of standard 509 certificates, or in PGP format, The same for private keys.

Time stamps - How do we calculate when in UTC a transaction actually took place? When it was issued from the client, or when confirmed in a block list? Is there a shared consensus on BitCoin standard time?

(Everyone, add what you can think of. Answer what you know.)

I'd like to be the first BitCoin collector.

I'd like to buy 5 uncirculated bitcoins from the genesis block.  I'm willing to pay $5 USD for them. That's 20x the current market rate if you are the current owner.

As bitcoins are not individually represented or serialized, here are my requirements for "uncirculated".

After transfer to my bitcoin address(s), you should be able to show the following provenance.
1) A complete transaction list originating at the genesis block
2) All transactions in that list have only a single input. (no merging transactions)

That means, I want coins from the genesis block, that have never been mixed with (circulated with/tainted by) coins generated in subsequent blocks. Otherwise, there is no way to know my coins are true genesis coins.

The only exception to the merging transaction rule, is if you can show that every input to the merging transaction has the above provenance. In other words, the genesis coins have only been mixed with other genesis coins.

I might even pay extra, if you can document the real world owners of every bitcoin address the coins passed through.

Cheers!
Red

I think there is a pretty significant crypto flaw in Bitcoin as currently implemented. I'm not sure it is exploitable now (I'm not a real cryptohacker) but it is more than plausible that will be in the near future.

The flaw would enable anonymous stealing of coins from arbitrary bitcoin addresses. And no it doesn't involve solving any of the hard problems that keep existing crypto systems secure. It is simply a *potential* correctable logic flaw in the implementation.

I would like bitcoins to succeed, so I'd rather not jump up and down in public yelling about flaws in public. Is there an appropriate place to discuss these types of issues?