This expands on the idea I first saw in ProtoShares, where the digital "element" is not viewed a currency or a commodity, but rather a something more analogous to a share of stock in a company. Holders of those shares would be periodically paid a dividend (probably in a digital currency like BTC or DGC) based on the profit of the company for that time period.
As with common stock, this provides two things: a) income for the shareholders in exchange for risking their up-front capital, and b) capital for the business. Unlike common stock, however, these shares are constantly springing into existence via the normal mining process. To fix this, my company, 6th Street Radio, will pay dividends based on profit divided by the total shares outstanding. Shares outstanding include any share not owned directly by the company, which would include any shares mined by outside sources. The company would also periodically have a buy order for a large number of shares at a set price to provide additional incentive.
Some of my original notes from the idea:
- Fork from protoshares source, use same "momentum" proof of work.
- Since 6th Street Radio is a media company, the total number of shares is based on the shares outstanding for something like Townsquare Media (32 million according to a quick search).
- Total shares would target that number at 1 block per hour in 5 years. 43k hours in 5 years, so 740 shares per hour.
- The initial mining isn't exactly analogous to an IPO in the normal stock market, rather closer to "filing papers" at the SEC or something. 6SR will purchase shares at a fixed price in DGC (starting at 0). After 6SR has amassed 74,000 shares (100 hrs) or so, we can start selling them as shares in the business, after which all outstanding shares will periodically be paid a dividend in DGC. This could be considered the "IPO."
- The total number of shares not owned directly by 6SR are the "outstanding shares." At this point, any new mined shares are also considered outstanding, and 6SR will need to purchase them back at market value to avoid dilution of share value.
- So what happens if/when 6SR is not the primary miner?
- Let's say all new shares are be created without anything going to 6SR. I think math will fix this, so long as the total dividend paid is a function of the total amount 6SR has received in sale of shares plus any profit received in that
time period. - For example, IPO sells 100k shares @ 1DGC. After a week, let's say there are another 100k shares out there due to shares generated by non-6SR mining. If 6SR agrees to pay 3% per year, paid weekly, then 100k DGC * 0.03 = 3000 DGC / 52 = 57 DGC. Divide that by total shares outstanding, which is now 200k, and you get your per-share dividend 0.000285 DGC/share.
I'm asking for comments and perhaps help. I'm a software engineer, and I've already started playing with protoshares' fork of the satoshi code. I've generated a genesis block and am testing to see if my minor code modifications will work if released into the wild. I'll post the code publicly as soon as I have something stable to release.
