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

[markm]

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.

That is irrelevant to what specific coin one happens to use such a GUI with, it is basically a useful piece of free open source software that if you would please actually create it instead of just posting the idea would be useful to all cryptocoins. So please do create it but it is just a GUI front end onto any coin, nothing coin-specific about it. In fact you should make it use the daemon version of the coin even maybe so that people can use the exact same executable of this cold-wallet creator for their entire portfolio of coins.

-MarkM-

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[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.

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?

You're going a bit overboard there pall.

Maybe you're not the type to make a donation, but I sure wouldn't mind to give away the results of a day of mining to the cause. You're saying it's unreasonable to do something selfless ?

[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?

You're going a bit overboard there pall.

Maybe you're not the type to make a donation, but I sure wouldn't mind to give away the results of a day of mining to the cause. You're saying it's unreasonable to do something selfless ?

Yes I'm saying that is unreasonable. I'm saying we should instead reward you so your interest is aligned with the interest of the project. So if you were to do a selfless act then you would receive an email with a crypto-medal which would basically be something based around namecoin or some cryptohash which would be exclusive to those like you. A very limited number of these would be made but just like if in the military you can win a purple heart for doing a brave selfless act, why not give you a suitable crypto-medal?

What I don't agree with is simply taking donations from people and not giving them something of value in return. A crypto-medal would give you unique community credit and unique hero status beyond those who acted out of greed. It would be better than having your name in the credits because this crypto-medal would have a value beyond the value of the netcoin project. The value of a crypto-medal would be whatever the community decides a selfless act in support of a cryptocurrency is worth.

Badges can be implemented something like this http://openbadges.org/
Medals would be based on the military or the olympics model.

[tacotime]

Hi guys,

Hopefully next release of GUIMiner is out tonight and I can start getting back to everyone's replies here in the thread.  I can't promise long replies to everything, but I'll give my opinion and let you know what I think.

[Cheshyr]

I dislike Kickstarter for something like this in general, due to the large fees.  I think it's better to let people buy in using their hashing power when the time comes.

[JessicaMILFson]

<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? $10 for 10,000 would work. $20 for 20,000 would work. $30 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 20-30% 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.

This is the best way. Set it up like an IPO and the shares that we get are coins.Your rate that you mentioned sounds reasonable. $10 for 1 netcoin is absurd.

[cdog]

I dont like the idea of people being able to buy in AT ALL. Mining keeps the whole thing honest and clean.

The wheel doesnt need to be completely reinvented here. Just smoothed out, some rubber added, some treads, etc...

Also, although Im not at all against the concept of altruism, I dont think it should be built into a new currency, because humans act out of self-interest. And myself, being like most humans, want this currency to be as successful as possible. 

However consider that once this self interest has been fully satisfied, some humans will move towards helping others and philanthropy. Maybe 5% of the population engages in helping others as its default value system for actions, but when creating a currency, the other 95% who initially act only out of self interest requires primary consideration.

You can read more about this concept of homo economicus or The Economic Man here, although its just a summary its fairly accurate:

http://en.wikipedia.org/wiki/Homo_economicus

[JessicaMILFson]

I dont like the idea of people being able to buy in AT ALL. Mining keeps the whole thing honest and clean.

The wheel doesnt need to be completely reinvented here. Just smoothed out, some rubber added, some treads, etc...

But we need funding in order to get full time developers to work on this as TacoTime has a lot of work requirements. How else do we get money to jumpstart the project? We won't even reach the mining stage without the funding.

[Joerii]

That's why donating is not really selfless. See it as a tiny investment to give TacoTime the chance to make his plans real.

[markm]

How freakin many hours of code-monkey work do you imagine it takes to turn whatever precise mathematical and pseudocode definitions the designers come up with into C++ or whatever programming language you want them to turn it into?

For the most part you just have to figure out precisely which constants and formulas you want changed from what to what, then likely someone familiar with perl or sed or awk - or even all three - could simply write you on the spot a script to make the precise changes to the bitcoin code that you have specified.

Five minutes work maybe once your final design document is complete or your final forum-thread-poster-consensus is reached and posted as one clear and concise forum-post detailing the exact changes.

Well maybe a whole hour if you are not even going to actually look at the existing code and discuss which line of which file to change from what to what.

-MarkM-

[tacotime]

Netcoin (I guess I'll adopt that now) won't be that easy.  If it was a matter of another Feathercoin or whatever, then yes, you can change a few constants in the code and be done with it.  But a lot of what I'm planning to change will require more than minor overhauls of the code.  I would guess you're looking at 60-100 hours of coding among developers (minimum) after testing of individual functions is done thoroughly, then you need testnet security audits.  The security audits would be a critical component and would likely run into the $10,000 - $20,000 USD zone.  But, it's more important that the code works as intended out of the box, as this is a proposed financial system.

[markm]

Not needed at all, instead just first run an alpha net of it, let anyone interested terst it to destruction, then when ready to go beta start over with a beta, then once all the kinks are out of it start over with the real launch.

Look how many people want to help for free on getting PPCoin right, the only thing stopping oodles of free hours being put in on it is the lack of an actual whitepaper detailing what the heck it is actually supposed to be.

So get your whitepaper finalised create a git repo pour the closest already existing thing to it into the repo and people can start proposing pull requests that will start changing whatever existing thing is closest to what the paper specifies into what the paper specifies.

-MarkM-

[cdog]

I think I probably havent read this thread quite thoroughly enough, but yes obviously Taco and other developers need to be well compensated for their time and efforts and because it wont be through a premine, it needs to come up front from the community, who of course want something in return for their speculative investment. This is very rational.  

As long as these considerations are all taken into account, and its done in a 100% fair, transparent, and democratic process, this coin will be a wild success.

There are some great ideas in this thread, Im going to read it entirely again and try to come back with some actually useful input.

[tacotime]

Not needed at all, instead just first run an alpha net of it, let anyone interested terst it to destruction, then when ready to go beta start over with a beta, then once all the kinks are out of it start over with the real launch.

Look how many people want to help for free on getting PPCoin right, the only thing stopping oodles of free hours being put in on it is the lack of an actual whitepaper detailing what the heck it is actually supposed to be.

-MarkM-

I'd rather professionals do the audit -- the early versions of CryptoCat are a good example of how badly community guided free open source software for cryptographic technology can fail.

At the end of the day I'd like to try to raise $40-50k and pay all the coders and auditors appropriately.

PPC is also a bad example.  The first major vulnerability was detected by Jutarul, who ended up not being a malevolent attacker.  As the chain increases its market share, we may not end up being so lucky in the future.  I do not want this to be centralized chain controlled by my checkpointing, because that's counter to everything a decentralized currency stands for.

[markm]

Well what it comes across is, is simply a get rich quick scheme of refusing to simply just actually let the damn thing get developed.

It seems more like "sorry we will not allow development to proceed unless we get paid" than "we are doing everything possible to ensure this free open source project gets developed as fast and well as possible but all the people contributing pulls to the git repo are stuck on some particular item that is beyond them so we will have to pay a professional to do that part for them".

Just specify the damn thing so it can get started. There seems to maybe even be some "oh we don't want to even be clear what the thing is unless we get paid" too maybe?

People are being paid shitloads even to just spoff off a quick clonecoin, it is raining money, so don't stand there saying you won't hold out a bowl to catch some unless someone pays you to do so, just hold out a damn bowl aready. (aka, just get coding, which first requires, presumably first specify what the fuck it is that actually supposedly needs paid coders to code it. (How can we even see for sure that it is beyond the capabilities of free coders to code it if you refuse to even be clear what the fuck it exactly it is that is to be coded?))

-MarkM-

[tacotime]

Well what it comes across is, is simply a get rich quick scheme of refusing to simply just actually let the damn thing get developed.

It seems more like "sorry we will not allow development to proceed unless we get paid" than "we are doing everything possible to ensure this free open source project gets developed as fast and well as possible but all the people contributing pulls to the git repo are stuck on some particular item that is beyond them so we will have to pay a professional to do that part for them".

Just specify the damn thing so it can get started. There seems to maybe even be some "oh we don't want to even be clear what the thing is unless we get paid" too maybe?

-MarkM-

The new specifications will be up within the next couple of weeks, I'm just musing over the potential costs of the project.  Rest assured I don't need anyone's money, and I'm perfectly happy to spend hours sitting in front of a whiteboard drawing things out for what I hope will be the future benefit of the community for free.

This is something I do in my free time.  I hope that everyone understands and will try to be patient.

[metazilla]

Question: Will this still use ECDSA for signing? It'd be cool to use something like NTRU (http://en.wikipedia.org/wiki/NTRU) so this isn't vulnerable to quantum computers.

[tacotime]

Question: Will this still use ECDSA for signing? It'd be cool to use something like NTRU (http://en.wikipedia.org/wiki/NTRU) so this isn't vulnerable to quantum computers.

It could be, but the problem is the size of NTRU private/public keys and then the message transmitted.  Ideally for NTRU n=503, p=256, q=3 because of the likelihood of lattice attacks at lower values; size of NTRU private and public keys are 2(n)log2(p) and (n)log2(q) bits respectively.  Thus we're looking at 1595 bits for private keys and 4024 bits for public keys.  With ECDSA, we have only 256-bit private keys and 528-bits for public keys.  The message expansions are also quite a bit larger I think, which may contribute to block chain bloating.  Note that (as far as I'm aware) application of Shore's algorithm to ECDSA as implemented in Bitcoin also only reduces the theoretical search space for private keys  from 2^128 to 2^64, so the even with widespread adoption of quantum computers it may be difficult to attack.

With NTRU n=503, p=256, q=3 you're looking at a more secure blockchain in comparison to ECDSA, though (authors quote message security is 2^170).

[ictin]

Well, I, for one, I am willing to help the development of this coin when I have some free time. I am fairly experienced c/c++ developer (6 years). I don't have a lot experience in cryptography, but i can take a crash course on coursera. But i have some requirements that i would like to integrate in the coin:
1. a block generated at every 10 seconds for fast approval of transactions (this i think is critical for the wide spreading of a coin, because in real life nobody will want to wait more than 10 seconds for the payment to be approved)
2. every block will generate at random between 1.5 and 2 coins at first and then, after some time, between 0.7 and 1.3 (to make it fun )
3. When a critical monetary mass is reached, new coin is generated only based on the transactions done between 2 blocks. Let's say that will be at random between 5% and 15%, plus the fees (this is to have a dynamic inflation). This will give the miners always an incentive to mine and keep the network alive.
4. I was just thinking and this to improve the resistance of an 51% attack, and is the following: Every region has  an IP class, and we make a pool of all the IP classes (I think that the first number of the IP will be enough, for privacy reasons, so if the ip is x.y.z.w, we will store only the x). When a new block is found, the IP class that found the block is excluded from finding blocks for the next 4 to 10 blocks, and then is added back to pool. That way we will have a more even spreading of the coin, and I think that it will also reduce the risk of a 51% attack (I may be wrong, I think i need to study more the cryptography).

[milly6]

Well, I, for one, I am willing to help the development of this coin when I have some free time. I am fairly experienced c/c++ developer (6 years). I don't have a lot experience in cryptography, but i can take a crash course on coursera. But i have some requirements that i would like to integrate in the coin:
1. a block generated at every 10 seconds for fast approval of transactions (this i think is critical for the wide spreading of a coin, because in real life nobody will want to wait more than 10 seconds for the payment to be approved)
2. every block will generate at random between 1.5 and 2 coins at first and then, after some time, between 0.7 and 1.3 (to make it fun )
3. When a critical monetary mass is reached, new coin is generated only based on the transactions done between 2 blocks. Let's say that will be at random between 5% and 15%, plus the fees (this is to have a dynamic inflation). This will give the miners always an incentive to mine and keep the network alive.
4. I was just thinking and this to improve the resistance of an 51% attack, and is the following: Every region has  an IP class, and we make a pool of all the IP classes (I think that the first number of the IP will be enough, for privacy reasons, so if the ip is x.y.z.w, we will store only the x). When a new block is found, the IP class that found the block is excluded from finding blocks for the next 4 to 10 blocks, and then is added back to pool. That way we will have a more even spreading of the coin, and I think that it will also reduce the risk of a 51% attack (I may be wrong, I think i need to study more the cryptography).

these changes you want seem radical and somewhat insane to be honest imo