A project is underway to create a new system whereby coins are distributed through a process called Cooperative Decentralized Minting in an open source fashion. A "whitepaper" website has been developed for the project that will be updated through the course of the project. A brief explanation is below:
A new type of distribution model called cooperative decentralized minting has been developed. Bitcoins and alt-coins are distributed through mining, and still other coins are distributed by sale from a central authority in exchange for Bitcoin to fund development. Cooperatively minted coins can be distributed in a decentralized fashion.
Cooperative Decentralized Minting involves a three-way exchange between:
1. A buyer who wants to exchange something of value for a coin in a decentralized market.
2. A worthy project that needs funding and competing open source developers that want to complete it.
3. A user of the coin that wants to use the results of development.
The three parties form a three-way exchange that mint in a completely decentralized manner by cooperative agreement. The distribution curve defines a fixed distribution rate, that buyers compete for. There are three phases to the exchange:
*Buyer Phase* At first, a buyer will only be able to exchange something of value (e.g. Bitcoin) for the new coin. ProxyBitcoin is a token minted and held by the buyer and backed by a real Bitcoin account controlled by the buyer. Once a buyer mints ProxyBitcoin through a verified transaction, they can acquire the new coin in a decentralized market. They can then specify which projects they want to fund with the ProxyBitcoin they sold and will vote on those projects, in proportion to their amount exchanged. When they provably transfer their real Bitcoin that backs the ProxyBitcoin to the developer, they can convert their ProxyCoin into real Coin. _Value Exchanged:_ Bitcoin to fund development in return for Coin in the new system. Once complete, the ProxyBitcoin and ProxyCoin terminate.
*Developer Phase* Developers will cooperatively and competitively work to complete a given project and meet the development specification. When they do, they receive the Bitcoin allocated by the buyers to the project. Any developer can choose any project to work on and can win all or a portion of the award for it. _Value Exchanged:_ Development effort for something of value (e.g, Bitcoin).
*User Phase* Users of the system will be the decentralized judge of the winner of the development prize by their adoption of the project. _Value Exchanged:_ Verification that selected software or a project meets a given design specification in return for getting that software for free. As the project matures, the definition of a worthy project can expand to include more than just open-source software.
The exchange can be thought of in electrical terms: Buyers are the negative pole, developers are the circuit through which electrons (funding) flows, and users absorb the benefits at the negative pole.
This design has several advantages:
* Buyers keep their funds under personal control until the project is delivered, at which time they will award their real Bitcoin to the successful developer, and their ProxyCoin will become real coin in the new system.
* Developers get significant incentive to develop, but only if they deliver.
* Users get quality open source software quickly to further expand the system.
The design is intended to solve several problems of building truly decentralized systems:
* Buyers correctly do not want to trust anonymous developers to develop a project to meet a goal by sending them something of value ahead of time, without some guarantee of delivery. This design opens the project up to any developer that wants to compete for funds. Buyers can allocate funds to any project node in the Project Hierarchy.
* Developers do not want to develop until some funding mechanism is in place to guarantee a reward for their know-how,
* Users do not want to adopt a system until quality tools to use it are in place.
To keep the system decentralized, once bootstrapped, anyone will be able to propose a new project that competes for developers effort and buyer funds.
It will take some time for each project cycle to complete, but once complete, everyone receives equal amount of value. Once the infrastructure are in place, other, more global projects can be funded.
The project is being developed on something called MessageNet, a decentralized messaging system useful for more than just currencies.
The website is hosted in a decentralized fashion via software called BTSync, developed by Bittorrent, which allows you to sync computers, much like Dropbox, but without centralized storage of files. MessageNet will depend on BTSync initially to bootstrap. It is very much an experiment. To follow the project, download BTSync:
http://www.bittorrent.com/sync/downloads and subscribe to the read-only key of the GenesisDirectory:
BYI644AFJRRBB22BRI3XQSKXX6FTDXOCF
The Genesis Directory will be kept small, with only small HTML files hosted. Once subscribed, click on CooperativeDecentralizedMinting.html in the synced directory on your computer for more information and other details.
