MC2: A cryptocurrency based on a hybrid PoW/PoS system

[Luckybit]

I vote for the name NetCoin, I think it sounds badass and it's a suitable name that I really feel will get traction with everyone in the mining community as well as the mainstream media wheeler and dealers who will pull a BTC with this type of coin lol.

Also do we have any ballpark idea as to when this coin will be released, I am an eager beaver!

Netcoin does sound good.  I agree.

[Luckybit]

Hi guys,

Updates should be coming later this week.  There's a lot to rewrite in the draft paper, and I need to run it by some people first.

Notably, iddo mentioned an alternative PoS system and, reading it now, I came up independently with a similar solution over the past month.  If it works it may allow four minute confirmation and solve the 51% vulnerability, which I'm sure would be desirable for a lot of people.  But it needs to be figured out further and a lot of people will need to go over it to ensure it's secure.

I want to rewrite the hashing algorithm so that the hash itself uses all the different algorithms.  I've also been going through research papers to try to find the algorithms that use AES code fragments (modern CPU friendly), runs slowly on FPGA implementations (almost all SHA3 candidates like this were eliminated for this reason), and then to implement the hash algorithm and ensure that the following parameters are met:
1) That approximately half of the cycles in the scrypt loop are spent computing hashes of various types, while the other half are spent in memory access steps.
2) That using scrypt with parameters of N that are not 2^n is okay -- hashes compute fine if you remove the error checking in the implementations in C that I have, but I can't be sure that this does not lead to any problems until I step through the code.
3) Goal throughput of 5 KH/s or more average on a CPU to make sure verifying that verifying the blockchain is not impossible for the end user client.  N range will be adjusted accordingly.

As far as GitHub is concerned, there won't be a fork started until the theory behind the chain is solid.

Eventually a kickstarter may be formed and I'll aim for $50,000 or so to pay potential developers.  There's no way I can do this on my own, I'm paid right now for unrelated contracted research so I won't have a ton of free time over the next 12 months to dedicate to this.

I'll go through this thread later this week and try to respond to everyone's comments and suggestions.  Thanks for the interest!

My advice on the funding, definitely aim higher. See if you can be funded in Bitcoin as well as Kickstarter because if the price of Bitcoin goes up you'll have plenty of cash to fund development. It also ties development into the success of Bitcoin and cryptocurrencies in general which is a good thing imo.

Something like this http://www.raisebitcoins.com/ https://bitcoinstarter.com/
in combination with Kickstarter. I think one way to get funding off the ground and I mentioned it before is to find a way to offer somehow a return on the investment people make so that they feel it's in their self interest to invest in the development of your coin.

The same way mining is incentivized as a way to protect the network, development should also be incentivized. This is something which could be built into the project itself.

Here are some ideas I can propose and others here tell me what you all think about it.

Proposition 1: Suppose we all pledge X amount of Bitcoin to the project as a way to reserve shares in the project. A certain percentage of transaction fees early on can go to paying for the development of the project itself and toward paying the share holders. If done right then this project could get hundreds or perhaps even thousands in Bitcoin from initial investors on top of Kickstarter. The price of the shares should be cheap early on for early supporters but slowly rise in price later on for people who decide to come in with big money late. The point of this proposition is to somehow find a way to tie in an economic incentive for people to pledge X amount of Bitcoin or cash to the project, if it can accomplish this it will generate more than $50,000 easily.

Proposition 2: Suppose we don't use a transaction fee model but instead use a sort of privileged mining model where those who want to mine early must pay to reserve a spot on the mailing list? The problem with this would be accusations of premining so it's not the best solution.

Proposition 3: Allow investors to be among the first to BUY these coins prior to them reaching the exchanges. This would likely generate some interest but I don't know how this would be set up.

Anyway there are many more potential propositions but from what I see in the Bitcoin community the best way to fund stuff like this isn't to ask for donations but to provide incentives to make people invest. I see it a lot with mining companies offering ASICs to people who buy some lesser product or to people who preorder etc. Why can't these mechanisms be used to support this project as well?

[Benny1985]

I think some sort of share system would be fantastic, and would gladly donate some cash to the project.

I think a percentage of TX fees for a specific amount of time would be a smart idea - not just for investors/shareholders, but for the coin itself. I think that the developers of the coin should get some sort of benefit from it.

Say, 50% of TX fees go to miners, 20% go to a development fund (which can be allocated democratically through a vote-based model), and 30% go to shareholders and/or some sort of PoS system.

Depending on when you need investment, I may be down for $1,000 USD or an equivalent in LTC if you'd take LTC.

[tacotime]

Just to let everyone know, it's not dead and I'm still working on the theory.  It's taking me a while to develop the new proof of stake/proof of stake hybrid system, but I want to be confident that it can provide 4 minute secure confirmations to try to make it the fastest cryptocurrency available, without having to compromise security.  And that's honestly a hard task, but I think I might be onto something using a new system of secure block signing with stakeholders.  So, stay tuned.  It will not be anything like the PoW/PoS system that PPC uses and will not borrow code from that, but more similar to cunicula's proposed "Proof of Activity" system but faster and more efficient.

[Chiz]

You've got me super uber excited man! Faster currency? and a unique PoW/PoS code different from PPC? This is going to be the next big thing.

[Luckybit]

Just to let everyone know, it's not dead and I'm still working on the theory.  It's taking me a while to develop the new proof of stake/proof of stake hybrid system, but I want to be confident that it can provide 4 minute secure confirmations to try to make it the fastest cryptocurrency available, without having to compromise security.  And that's honestly a hard task, but I think I might be onto something using a new system of secure block signing with stakeholders.  So, stay tuned.  It will not be anything like the PoW/PoS system that PPC uses and will not borrow code from that, but more similar to cunicula's proposed "Proof of Activity" system but faster and more efficient.

What are the benefits of Proof of Activity vs Proof of Stake? Why not do a hybrid of all 3 to get the best of all 3?

[tacotime]

What are the benefits of Proof of Activity vs Proof of Stake? Why not do a hybrid of all 3 to get the best of all 3?

In short,
no chain bloat from tons of PoS blocks and more secure.  Blocks come regularly as opposed to sporadically as per PPC.

Forums and chat coming soon.

[digitalfog]

NetCoin:

Creative innovation.
Potential crowdsource funding.
Excitement among the miners.
Top-notch developer.

What is there not to like?!  This coin will be a winner.

 

[psybits]

This has probably already been mentioned but I really think it would be awesome to enable merge mining that also supports projects like SETI@home and other BOINC projects like helping find a cure for cancer.

Integrate this with the GUI of your coin so that miner can drag and select a percentage of their hashing power to contribute to the BOINC network (from 0% to 100%).

If the coin gets really popular this implementation could do so much good for the world it's unbelievable.

EDIT: also a GUI that enables anyone to mine easily, making mining more accessible for the masses = more people using the coin

[termhn]

This has probably already been mentioned but I really think it would be awesome to enable merge mining that also supports projects like SETI@home and other BOINC projects like helping find a cure for cancer.

Integrate this with the GUI of your coin so that miner can drag and select a percentage of their hashing power to contribute to the BOINC network (from 0% to 100%).

If the coin gets really popular this implementation could do so much good for the world it's unbelievable.

EDIT: also a GUI that enables anyone to mine easily, making mining more accessible for the masses = more people using the coin

Yes! Merge this with something like folding@home or SETI@home so that while we're doing this we're doing something meaningful for others as well.

[psybits]

This has probably already been mentioned but I really think it would be awesome to enable merge mining that also supports projects like SETI@home and other BOINC projects like helping find a cure for cancer.

Integrate this with the GUI of your coin so that miner can drag and select a percentage of their hashing power to contribute to the BOINC network (from 0% to 100%).

If the coin gets really popular this implementation could do so much good for the world it's unbelievable.

EDIT: also a GUI that enables anyone to mine easily, making mining more accessible for the masses = more people using the coin

Yes! Merge this with something like folding@home or SETI@home so that while we're doing this we're doing something meaningful for others as well.

So many members of the crypto community are techno idealists who want to change the world, I really think this is really worth doing The Bitcoin network is so powerful - imagine if this coin reached those levels and had this integration I'm so excited with this idea!

[wizzardTim]

Our ideas and dreams and actions make us who we are 

[frga13]

EDIT: also a GUI that enables anyone to mine easily, making mining more accessible for the masses = more people using the coin

I totally agree with this...
GUI should be something like Bitminter, it's UserFriendly²

[minefish]

About that BOINC thing, very great idea!
I was discussing this the other day.

I also have this idea of launching this coin with some sort of GUI that can configure the wallet in a way that can create cold wallets in a jiffy.
With the current crypto-currency's it is a pain to create 100% safe wallets, and far to difficult for the average Joe PC user.
If we can come up with a solution to create 100% safe wallets for end-users with a much easier process then the current one for litecoin and bitcoin, it can possibly reach a larger audience. The idea that anyone can create a 100% safe wallet (hassle free) that people can trust I think is a very important.
Marketing wise this is also a very good unique and strong selling point.

I picture this to be like a simple GUI which follows you through the steps of creating an offline cold storage on a CD drive, USB, chip whatever.
Maybe even create some sort of bootable ISO file with pre-installed software so people can safely create an offline wallet in a safe environment.
All they have to do is download the software, install the software on a USB drive/CD, boot that USB drive, follow the steps of the GUI and voilla, they created a safe wallet.

This is just the start of an idea, please give feedback and comment on this.

[KarmaShark]

Opening up funding via shareholder option purchasable in USD or Alt coins would be a clever way of getting more of the community involved prior to the launch. I would be interested in seeing this coin come to fruition however I fear I cannot contribute on the developmental side. This is an avenue that should be explored, there appears to be interest in it Taco.

[keinur]

This looks very promising.

Bitcoin was a great idea with great execution, but after 4 years it has turned out that there's huge room for improvements to be implemented, or incorporated in a new coin.

Curently none of the altcoins have achieved any -really- significant improvement over the original idea. Netcoin can be the Bitcoin 2.0, if properly designed.

[Benny1985]

Random idea for the POW system, based off of a comment someone else made, and something I've been thinking of:

Difficulty only does one thing: regulate the number of coins given out, as solving the blockchain at difficulty 1 (even in Scrypt) would be rather easy.

Would it be feasible, then, to merge the POW/POS system with something that has real-world tangible value? What I'm talking about is merging with an entity that does something of great value in the real world, such as Folding@Home.

In such an example, the user would have to submit POW to both the blockchain, but also submit work units to F@H. The difficulty for the POW/POS would be extremely low, increasing at a much slower rate, as F@H folding points are much harder to come by. Additionally, it may further discourage FGPA/ASIC units, as protein folding would require dual-use systems such as CPUs and GPUs (which would also make CPUs generally more valuable, as the gap between CPUs and GPUs for F@H are closer, although GPUs are still notably better).

It would also open up one previously-unused portion of the market: Nvidia GPUs. NVidia GPUs are much faster than ATI GPUs for F@h, and would essentially equalize their abilities, as an NVidia GPU can fold about 3-4 times faster than a comparable ATI GPU (with the ATI GPU being able to hash at a similarly better rate).

I know this would be an out-there concept, but I think tying work into a dual-usage system may be incredibly lucrative, as it would not only spur on coinage, but scientific research as well. One could theoretically surmise that eventually, the MC2 coin could accept other projects similar to F@h as part of its dual POW system, allowing other heavy-duty scientific applications to use the crowd-sourced computing power. Think of it as killing two birds with one stone - all the while, likely rendering FGPA/ASICs useless.

[Joerii]

<snip!>

Here are some ideas I can propose and others here tell me what you all think about it.

Proposition 1: Suppose we all pledge X amount of Bitcoin to the project as a way to reserve shares in the project. A certain percentage of transaction fees early on can go to paying for the development of the project itself and toward paying the share holders. If done right then this project could get hundreds or perhaps even thousands in Bitcoin from initial investors on top of Kickstarter. The price of the shares should be cheap early on for early supporters but slowly rise in price later on for people who decide to come in with big money late. The point of this proposition is to somehow find a way to tie in an economic incentive for people to pledge X amount of Bitcoin or cash to the project, if it can accomplish this it will generate more than $50,000 easily.

Proposition 2: Suppose we don't use a transaction fee model but instead use a sort of privileged mining model where those who want to mine early must pay to reserve a spot on the mailing list? The problem with this would be accusations of premining so it's not the best solution.

Proposition 3: Allow investors to be among the first to BUY these coins prior to them reaching the exchanges. This would likely generate some interest but I don't know how this would be set up.

I've been thinking about this a lot the last few days and I think it's best to keep things simple. Percentages of transaction fees really is not transparent to people who don't understand cryptocurrency yet ( even people who do haha ).

K.I.S.S. Keep It Simple, Stupid ( no offence, just a nice expression !)

Your proposition 3 is the most appealing, to me at least. Have you used Kickstarter ? We wouldn't call it "buying" an MC2, ( or Netcoin ) but it could be like this.

Pledge 5 USD and get a big thank you, and your name on the credits list on www.netcoin.org
Plegde 10 USD and get the above, plus 1 netcoin
Pledge 20 USD and get the above, plus 3 netcoin
Pledge 50 USD, etc, etc.

So how do we get those netcoins to rewards kickstart supporters ?

Simple, we also have a "supporter/donator" system HERE in the community. Members of this board and the future MC2/Netcoin board can pledge to donate  the first 50 coins they mine, for example. There would be no reward to this except for your name on a list that you can brag about, and the sweet feeling of making a valuable donation to the future of cryptocurrency.

The kickstarter supporters won't get their coin RIGHT at launch of course, but this is fine. It never works like that on Kickstarter.

If we ( I mean you, TacoTime ; ) use this altered version of Luckybit's proposal 3, we would avoid any smelly premine, avoid making stuff to complicated, and have a lot of extra people rooting for the popularity of MC2/Netcoin.
 More publicity is GREAT for a coin, look at what happened to Feathercoin.

[Luckybit]

<snip!>

Here are some ideas I can propose and others here tell me what you all think about it.

Proposition 1: Suppose we all pledge X amount of Bitcoin to the project as a way to reserve shares in the project. A certain percentage of transaction fees early on can go to paying for the development of the project itself and toward paying the share holders. If done right then this project could get hundreds or perhaps even thousands in Bitcoin from initial investors on top of Kickstarter. The price of the shares should be cheap early on for early supporters but slowly rise in price later on for people who decide to come in with big money late. The point of this proposition is to somehow find a way to tie in an economic incentive for people to pledge X amount of Bitcoin or cash to the project, if it can accomplish this it will generate more than $50,000 easily.

Proposition 2: Suppose we don't use a transaction fee model but instead use a sort of privileged mining model where those who want to mine early must pay to reserve a spot on the mailing list? The problem with this would be accusations of premining so it's not the best solution.

Proposition 3: Allow investors to be among the first to BUY these coins prior to them reaching the exchanges. This would likely generate some interest but I don't know how this would be set up.

I've been thinking about this a lot the last few days and I think it's best to keep things simple. Percentages of transaction fees really is not transparent to people who don't understand cryptocurrency yet ( even people who do haha ).

K.I.S.S. Keep It Simple, Stupid ( no offence, just a nice expression !)

Your proposition 3 is the most appealing, to me at least. Have you used Kickstarter ? We wouldn't call it "buying" an MC2, ( or Netcoin ) but it could be like this.

Pledge 5 USD and get a big thank you, and your name on the credits list on www.netcoin.org
Plegde 10 USD and get the above, plus 1 netcoin
Pledge 20 USD and get the above, plus 3 netcoin
Pledge 50 USD, etc, etc.

So how do we get those netcoins to rewards kickstart supporters ?

Simple, we also have a "supporter/donator" system HERE in the community. Members of this board and the future MC2/Netcoin board can pledge to donate  the first 50 coins they mine, for example. There would be no reward to this except for your name on a list that you can brag about, and the sweet feeling of making a valuable donation to the future of cryptocurrency.

The kickstarter supporters won't get their coin RIGHT at launch of course, but this is fine. It never works like that on Kickstarter.

If we ( I mean you, TacoTime ; ) use this altered version of Luckybit's proposal 3, we would avoid any smelly premine, avoid making stuff to complicated, and have a lot of extra people rooting for the popularity of MC2/Netcoin.
 More publicity is GREAT for a coin, look at what happened to Feathercoin.

Why would any reasonable person do it without any reward to it? (I suppose an unreasonable person would choose that option) You're basically relying on an altruism model but if that could work why not just ask miners to donate their GPU's to the Bitcoin foundation? (I'm not against including the big thank you name to the credits aspect I just think it wont generate much money, I don't see myself putting my precious limited Bitcoins up to get my name in the credits and a thanks).

I think on a very small scale it might work but it wont get nearly as much money as the relying on direct crypto-incentives. Think about it, if these coins are really going to be worth so much why would anyone want to give them up? Also the people who would give them up would be human sacrifices for those who don't which doesn't encourage the behavior for the next big coin or next big thing. I think the main problem is perhaps the scale, $10 for 1 netcoin? $20 for 3 netcoin? $100 for 1000 would work. $500 for 5000 would work. $1000 for 10,000 would work. $2000 for 20,000 would work. $3000 for 30,000 would work. If you set it up like that I'd buy $100 worth on the spot. But then you have a problem, it's still in USD and it's now going to look like a pre-mine. It absolutely must not favor USD even if USD is involved in my opinion if you fund with USD you should pay 20-30% extra as punishment. If you have the USD it wouldn't take much effort to convert that into Bitcoin and receive the discount. I think we should work the badge system in and replace the name in the credits and thank you. I would prefer to be in the background and not have my name attached to something like that but if I could have a badge, that badge could give a noble status or any status we choose as a community. This would encourage people to fund it to get that noble hero status.

I think if we follow an IPO process and actually provide incentives for funders and developers then you'll have the maximum amount of funders and developers. If you go the charity route then you're exploiting kindness. I'd rather exploit and reward greed than exploit and punish kindness. Also you're asking that people pledge dollars which makes no sense at all to me because that does not encourage adoption of cryptocurrencies.

So I still think proposition 1 is the best. It encourages people to actually make use of their Bitcoins to invest in Netcoins. Key word is invest because I don't see why anyone should just give their Bitcoin or USD away to a project before it's even developed and even if it were working what a donation is, it's basically making Netcoin into a kind of shareware model where the first suckers to buy it are paying for everyone else to get it for free.

I think Bitcoin has it right, reward the early adopters who mine it, but also extend on this and reward the early buyers. If you're willing to take a risk to buy and hold these coins (consistently reward risk takers, never punish the bold), or if you're willing to invest in it with Bitcoin you should get a return on the investment (reward the bold, never punish them but encourage). Nothing motivates behavior like profit. It's up to Tacotime of course as he's the lead developer but if he wants the maximum amount of money in the fastest amount of time and the ability to quit his job and focus exclusively on this project then all he has to do is set up a kind of IPO and many people will fund his project and his development fees. And those who do should be rewarded by those who ultimately use the finished product (everyone). Tacotime should also set up the funding amount to be enough that he can quit his job and fund development for approximately 2 years. This will probably mean something like $100,000 which I actually think is doable.

                  Here is a list of novel incentive mechanisms for consideration

• Reward risk takers
• Reward early adopters
• Reward with badges which bring community status
• Reward with limited transaction fees for early funders
• Reward all who pre-buy pre-exchange with a badge

Badges can be the solution to determining who is owed what rewards. It can also bring prestige, privilege or status. So for example if you fund the project early on you should receive a badge of a specific colour, type and rank. Associated with that badge should be the privilege to receive transaction fees of a certain percentage for a limited amount of time so that it's enough to profit from your investment. Or you can receive a badge which gives you 0 transaction fees for a certain amount of time so that you don't have to pay transaction fees up until it reaches a certain fixed amount of value lets say double what you initially invest, to code this miners would have to put certain individuals on a whitelist who have a specific badge number/hash. Perhaps namecoins could work for implementing this.

We can have many different colour badges with many different ranks, many different insignia, but the point is that these badges must be limited in the same way coins are, and people who invest in this project should receive a badge proving they were an early adopter, early investor, early buyer, and honestly there should be real community status for being bold, brave, and taking the risk. The badge system is something which developers probably would have to work on prior to anything else if they want to implement it but I think it would work great for this.

[imperi]

I think it has long term potential, but it would take time to gain my trust, since it does not have a conservative design (read: it has lots of changes from Litecoin). So I will keep my eye on it.