I think discussion about reducing "tax" is useless unless you know some concrete scheme to do that. It is equivalent to working on scalability of Bitcoin.

Actually I've made some research on this matter. But it doesn't mean I can't write on other topics, right?


I think it would make sense if fees will be proportional to costs. E.g. for spending it is costs of sending data over network and doing lookup and ECDSA verification on all nodes. For hoarding it is cost of storage.

Even if storage was free, hoarders would still benefit from network security, so it makes sense to tax them. Although it's hard to quantify how much. Perhaps we can find some equilibrium here.

I think it would make sense if fee structure was transparent and fair, rather than arbitrary.

I didn't know you are so math-impaired. This is wrong on many levels...

1. It takes time to mine a share, likely a very significant time, like years. But prices will be adjusted continuously. So suppose in a year prices are 1% up, but you haven't mined your share yet. It is equivalent to losing 1%. So effectively it is equivalent to tax on spenders.

2. Furthermore, coin-age is reset after sending coins. So money which is in active circulation does not earn interest. So, again, it is a tax on spenders.

3. To mine you need your wallet to be attached to an active mining node. Which means that people who are using thin/mobile wallets simply won't be able to mine. Moreover, people who care about security of their coins will keep then in an offline wallet. So clearly people who can't/don't want to mine pay to people who are mining.

4. Mining has its costs. With ppcoin you'll need to expend resources all the time just to keep your money intact. So how is it different from taxation? You're just paying taxes with your hardware resources. And, no, you don't secure your money yourself since you'll be securing other people's transactions, and also resources which need to be spend is not proportional to money you own.

5. Mining has its costs. It is fundamentally unpossible to pay for it without paying for it. Thus if you want to reduce costs of spending/saving you have to invent more efficient transaction processing. For example, based on divide and conquer. Otherwise it is just about shifting costs around.

Seriously? People who do not lose their savings are compensated for what sloppy users do?

This is anti-insurance.


I don't think it's possible to take away something one never had.

You can as well call food prices "a tax on hunger" or something.


This issues are orthogonal. We can argue about whose money to expropriate while trying to reduce the need for taxation.


Doesn't ppcoin incentivize mining with interest rate? Then it falls under "robbing savers" category.

Double think is strong in this one. Ignorance is strength.

EMIF.LTC-TRADING -- In theory should be trading at least somewhere around IPO price, 0.50 IIRC. But dude haven't been communicating with us for a couple of weeks. On the bright side, he sent a good dividend on 2012-10-15. It corresponds to about 30% per year.

ESECURITY-SA, ESECURITY-SA2 -- with a current exchange rate issuer should be selling at about 3.3 LTC per bond, and since issuer haven't sold all bonds yet it's unlikely than it will go above 3.3 (assuming current exchange rate). However it is a great bond as long as you don't mind coupon fixed in USD

LTC-ATF -- here issuer forms price himself, and it's backed by calculation, so you might assume it's about right.

LTCI -- it is expected that fair price now is 0.64 (http://forum.litecoin.net/index.php/topic,676.msg1983.html#msg1983), but it might recover when other prices will recover (say, up to 1.0) since it just invests in other shares.

OPCU -- it is still doing IPO, don't expect price to go above 0.9 anytime soon. If you want to go out put an ask at 0.899, for example.

1. If LTC exchange rate will drop share prices are expected to go up.

2. It looks like market is fairly irrational now, you might wait a bit till it gets more rational.

It's possible that LTC exchange rate hike caused sell-off, considerable amount of litecoins have left exchange and what's left simply cannot keep asset prices reasonable. But if situation stabilizes you might see share prices recovering.

It would be hard to find high-end VPS for $30/month, but it depends on what kind of specs you need. Do you need RAM, CPU, bandwidth or disk I/O?

Anyway, check this: http://www.fennec.name/index.php/virtual-servers/

But you might want to ask them about CPU and disk IO capacities.

Also if by "good tech support" you mean "managed" I really doubt such even exist in that price range.

Also you might want to check low-end physical servers, like this: http://corenetworks.net/dedicated/
Shitty server might die at any time, but on a dedicated server you have predictable disk I/O capacity.

Well it's now scattered over many threads.

General outline of colored coins: https://bitcointalk.org/index.php?topic=106373.0
Incomplete discussion of an exchange: https://bitcointalk.org/index.php?topic=118672.0
A basic implementation from other developer: https://bitcointalk.org/index.php?topic=117630.0
Discussion about contract enforcement: https://bitcointalk.org/index.php?topic=117800.msg1278882#msg1278882

I expect to produce an Armory-based client in a couple of weeks. Meanwhile you can try python script from that other guy, but that's at your own risk.

I've been focusing mostly on tech sides, but I do have some ideas about ecosystem/

Well, I'm working on an exchange based on colored coins and I wonder how it compares to asset-otc feature-wise.

With colored coins number of bonds/shares can be fixed at time they are issued, and issuer won't be able to dilute. Thus ownership is unambiguous.

E.g. a situation where issuer says he makes 1000 bonds but makes 2000 bonds and we don't know which of them are real is not possible.

Of course it is possible for an issue to issue more bonds under a different name, but then it is a matter of issuer identification.

I don't quite understand your conflict, but it might be relevant to asset-otc: does asset-otc secure investors from dishonest issuers? E.g. what if issuer will create fake bondholders?

With system I described inflation after N yeas is 1/N. So it goes down to zero with time, and so does tax on savers.

However, if we assume that there is some coin loss (from lost wallets, mistakes, or maybe intentional part of design) monetary base is going to be stable.

So essentially miners do not take money by taxing savers, instead they replace lost coins.

On the other hand, if no new coins are produced and some coins are lost, savers will profit from doing nothing, which isn't healty.

Currently size limit is 1 MiB, which is approximately 4000 250-byte transactions. So ~6.6 transactions per second. Half a million transactions per day.

Bitcoin protocol isn't set in stone. If there is demand block size can be increased. It's also possible to make it more scalable.

Changes like this need approval of majority of miners, but it is definitely doable.

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There are cryptocurrency designs where each block pays 50 coins forever. It is not inflationary, contrary to common beliefs. (Asymptotically inflation is zero.) And in that case miners' rewards are going to be huge if they are supporting huge economy. IIRC Tenebrix was based on this approach.

I think this design is superior since miners won't have to strangle activity with fees.

Unless company isn't fully correlated with LTC its share price is going to go down when LTC goes up. To be fully correlated company needs to hold LTC and LTC-denominated debt with coupon fixed in LTC.

Otherwise it's hard to explain why value per share will go up.

Even for companies like LTC-GAMING and LTC-CHARTS which in theory deal only with LTC: why would we expect their revenue to rise?

Same thing happens on "traditional" exchanges: if dollar goes up stock market goes down, and vice versa.

Did I miss something? "BTC Trading Corp. Avarua, Rarotonga"

https://btct.co/security/ESECURITY-SA2

Have you ever heard about credit default swaps? It is essentially a same model as "DRO":


It is not really an alternative: litigation likely won't help you in case issue defaults, but CDS can.

And just like in that "DRO" example, CDS are monitored, and if they are through the roof that means that company or country is likely to default.

One more alternative, now without use of collector agency/trust: https://bitcointalk.org/index.php?topic=119073.msg1280595#msg1280595

It also solves this problem:


"Meat world" resolution will only be used as a last resort.

Contract will be structured in such a way that if you want to claim your money through court system you have to return your security to issuer first, thus making it meaningless in crypto world.

So from "meat world" perspective cryptosecurity simply confirms identity of creditor and his will to redeem it, but it doesn't really represent ownership.

Think about it: digital signature is simply an evidence of consent. Legal system cannot amend digital signature, but that's OK.

Perhaps a better way to do this...

Problem: we want to make a negotiable instrument ownership of which is identified cryptographically, but it might be legally problematic:
1. we don't know whether court system will recognize cryptographically signed transfers of ownership among anonymous parties
2. it might be illegal to make such instrument because it is seen as security, which is subject to regulations

Possible solution: disguise this negotiable instrument as simple non-negotiable person-to-person loan. (Which likely is legal.)

Imagine a contract where one party's name and signature is left blank, but it is signed with other party. Whoever has access to this contract physically can write his name and signature and effectively becomes a payee.

To do this, we'll make contract with two or three parts which are signed independently. First part will describe issuer's identity and general terms of payment. Second part will describe creditor's identity. Third part will be a letter from creditor which will say that he wants his money back.

First and second parts are signed with issuer's digital signature. However, it is a lie: issuer will reveal his private key to a 3rd party, which would act as a notary.

Notary will receive a request from creditor, check whether it is valid and then he'll fill second part of contract with creditor's information and will sign it with issuer's private key.

But a first part of contract will state that both parts are signed by issuer personally at the same time so they form a whole valid contract.

So how will we prevent abuse from notary's side? Contract will also include a clause that to claim money payee will have to identify himself via a certain chain-of-digital signatures scheme. So that's how we connect decentralized market crypto scheme with a world of two-party contracts.

E.g. "I'm John Smith. Please pay me to this bank account: xxx. My digital signature: yyy. A chain of digital signatures which confirms this request: zzz."

Contract can explain that this weird chain-of-signatures is requires to prevent identity theft or something like that. It's even partially true...

Additionally this scheme can be enhanced with mandatory arbitration clause in contract. The reason for this is that it's likely easier to find a tech savvy arbitrator who will understand how to verify a chain of digital signatures which controls ownership then it is to find a competent court. Arbitrator will simply say that he have verified all this digital mumbo jumbo and court will recognize it.

Additionally, this would guard issuer from potential abuse from notary as such attempts will be filtered out by arbitrator.

There are several discussions of decentralized crypto-based capital markets in "project development" section, e.g. this: https://bitcointalk.org/index.php?topic=117800.0

And people question legality of this. So let's discuss legality here.

Suppose there is a way to identify ownership of an security via a chain of digital signatures or something like that. (E.g. "colored coins" are one of such schemes.) People can then trade these securities anonymously.

Let's consider this from issuer's point of view. The most straightforward way is to make a contract which would say that owners who can identified via digital signature scheme have some rights, e.g. issuer owes them money.

So this can be seen as a sort of a digital promissory note, bearer instrument.

However the problem with this is that it might look like issuer creates securities, which is subject to numerous regulations, so it kinda defeats the purpose of decentralized market. (I assume that one of major purposes is to make it simpler to issue securities.)

But what if anonymous shareholders/bondholders would be represented with a non-anonymous entity which will act on their behalf?

Consider this scenario: issuer and a collection agency make a contract, which simply states that issuer owes money to collection agency. But this money can be claimed only if collection agency can provide proof of approval via a certain digital signature scheme.

From legal point of view it is just a contract between two parties, which comes with some weird additional condition, but additional condition doesn't make contract illegal, I think.

From decentralized market's point of view bondholders can use collection agency as a proxy to extract money from issuer: collection agency will either buy their bonds, or will agree to transfer money it extracts from issuer to bondholder if he provides his signature.

There are many possible variations of this scheme. For example, issuer might borrow money from an offshore trust which will hold it for the benefit of beneficiaries which are identified via a digital signature scheme.

Trust can also work for shares: shares will be sold to a trust and trust will represent crypto beneficiaries.

Perhaps to claim money investor will have to identify himself when he provides signatures, e.g. "I'm John Smith, send money here, here's a proof that I'm an owner: xxxx". But still, people can trade on market anonymously. Identification will only be needed if issuer defaults, then people who are not afraid to identify themselves (perhaps they live on Kook islands...) will simply buy bonds/shares from people who want to stay anonymous.

Thoughts?

Note that price have fallen also for stocks like LTC-GLOBAL and LTC-MINING.LTC -- this must be not due to a lack of trust.

Also LTC-GAMING and LTC-CHARTS are not backed by anything, so their price simply reflects the mood on exchange.

I think falling prices means that people are withdrawing litecoins: i.e. they sell assets they have and do not buy another assets... Also new people with money do not come. So there are too few litecoins for too many assets, which produces weird prices.

Maybe they withdraw litecoins to sell them on btc-e while prices is high?

Alternatively, instead of a "collection agency" we can use a "trust". Issuer and trust will sign a contract which says that issuer owes trust money, but that money can be claimed only after approval of beneficiaries whose identities are concealed. Beneficiaries will signify their approval via digital signatures which can be verified through digital signature chain known as "colored coins".

From decentralized market point of view, these beneficiaries are just bond holders who want their money. If they don't trust the trust, they might ask trustee to sign a contract with each of them, but they won't be anonymous then. Trustee will get a commission from money he extracts from issuer, so he is interested in doing that.

Alternatively, the original contract between issuer and trust/collection agency might say that this claim is done on behalf of beneficiaries who will confirm their identities with digital signatures, i.e. they won't be anonymous anymore. I guess in this case we don't need an additional contract with each bondholder=beneficiary, since contract already says that they should receive payments. Perhaps we can go back to 'collection agency' model, as there will be no anonymous parties at that point... Although there might be a question how exactly did it happen that issuer owes money to those people...

So we see a pattern here: people can trade via blockchain anonymously, but when there is a bad situation and they need to make a claim they need to reveal their identities. People who wish to stay anonymous should sell their bonds to people who can show their identity to get  money.

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We can also work with shares via offshore trust: shares which are to be sold on decentralized stock market will be sold to this offshore trust, and offshore trust will hold them for the benefit of anonymous beneficiaries identified via colored coin ownership. So what we need is offshore jurisdiction which allows anonymous beneficiaries. Something tells me they exist.

So this requires a separate offshore trust per company... They don't cost that much, do they?

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And finally private currency backed by assets can also be done via offshore trust kind of things: this trust will simply hold a commodity which backs this currency, or perhaps fiat money, and handle withdrawals if needed.

See here: http://en.wikipedia.org/wiki/Unit_investment_trust