I'd like to respond to some questions I got in an email here, so everybody can see them:
Hello again,
Apologies for taking so long to get back to you. I've been reading through your specifications paper and have come up with a few questions so I can understand the protocol better.
First of all, how is are your plans progressing? I noted that the Exodus Address has 1986 BTC. How does that compare to your funding target? How many payees have you had?
Progress is faster than expected, but much slower than I would like. Three of our project milestones have been achieved, and there are several more to go:
https://bitcointalk.org/index.php?topic=265488.msg2841329#msg2841329I have had a few minor expenses, but most of that money will probably be used for bounties once I have the basic code-base set up. Also, I'm not touching the money at that address until the fundraising is done September 1st.
There is no funding target really. I'm proceeding with this regardless of how much is raised. Extra funds just mean I can do it faster.
What user currencies do you expect to see (in addition to Gold and USD coins)? Can you explain how those commodity coins work too, please? Do I understand correctly that if we arbitrarily say GoldCoin is linked to the price of gold that its value against BTC will continuously track the ratio of Gold to USD?
I expect anything that has a price can be tracked in this way, including stocks, bonds, and every type of commodity. Your understanding is correct - these user-created coins track their target values as long as their escrow fund is sufficiently funded. You can read many pages of back-and-forth about that mechanism on this thread
Here are the notes I wrote as I went through your paper:
01) What do you mean by alt-chains - are these different to altcurrencies (e.g. Litecoin) ?
02) If so, can you name some?
Yes, I'm referring to LiteCoin and its brothers
03) Is there a concern of littering the Bitcoin blockchain with microtransactions that facilitate higher protocol layers.
Yes. This will cause some additional headaches for bitcoin scalability. If wildly successful, this sort of protocol layer will make the impact of Satoshi Dice seem pretty tame in comparison. However, this is a problem we need to face sooner or later anyway.
04) How consistently will the exchange rates between higher protocol be enforced?
For pegged currencies, price intervention happens once per day (when the price ticker updates). How much intervention is defined by the currency creator.
05) Mastercoin transactions: Is it the original payment sum that is split between the reference/data/marker payments?
The transaction is a message, as the whole protocol is message based. For a simple transfer, the amount of coins to transfer is embedded in the data payment. The payee is the reference payment. I have code that does simple transfers now (
https://bitcointalk.org/index.php?topic=265488.msg2919863#msg2919863). You might want to take a look at that if the paper isn't clear.
06) You refer to a "fake bitcoin address" in transaction details explanation - how do you fake an address?
Like this: 1FakeAddressWithSomeDataInIt
You just have to generate a checksum to put at the end to make it a valid bitcoin address.
07) Do you expect to cloud wallets to implement support for consolidated addresses?
I think you are asking whether we will have web wallets which support these currencies someday? Yes, I hope so.
08) How are transactions from savings addresses made reversible?
By publishing a message which says they are reversible. Everyone can see that message, and will then treat any transactions from that address as reversible until the waiting period is past.
09) Is a Guardian address like escrow? Who owns them?
It's just another bitcoin wallet, kept safe somewhere in case your savings wallet gets compromised.
10) How will the reversibility period affect consumer trades? (e.g. I don't want wait a month to receive my goods, but if merchant dispatches before expiration I could recovery my money).
Nobody will accept payment from savings wallets for purchases. You will need to move them from the "savings" address to another address you control ("checking"?) and after the reversibility period is past you will be able to spend them.
11) Why has support for betting been added to MasterCoin?
Because I think it will be a popular feature, and I want MasterCoins to become obscenely valuable someday.
12) Who/where/how is the escrow fund (for higher level protocol coins) Managed?
13) Will the escrow fund be publically identified/readable?
Automatically managed by the protocol. Everyone running the protocol follows the same rules for price interventions, so human intervention is not needed. Consequently, everyone can see what is in the escrow fund, and everyone knows what it will do in a given set of circumstances.
14) Can other commodities be added as data streams? How is this done?
Anybody can create a data stream, and anybody can create a currency which tracks an existing data stream. This is done by sending a message defining the data stream, and then sending another message defining the currency. The formats of these messages are defined in the spec.
15) How is MasterCoin better for criminals than Bitcoin?
I think criminals (like the rest of us) will prefer to deal with stable currencies rather than unstable ones. Also, betting on data streams will likely be a breeding ground for insider trading. (Note: I'm writing this protocol, but I'll be very careful not to use it for anything like that myself - I would prefer to stay out of jail!)
Thanks for the great questions!
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