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

[bitfreak!]

The person who invented this should receive compensation and credit.

Address is in my signature. Let the compensation flow in.

Honestly though you can help by donating to the project donation address.

[Luckybit]

Yeah, these ideas should be catalogued.

Also, did Taco mention anything about solving the instantaneous day-to-day transaction problem that Bitcoin has? If this can be solved, then there will be huge potential for NTC

Elaborate on the details of the problem, let our thread put our minds to solving it and see what we can come up with. The problems and solutions must be catalogued for this reason.

[aaaxn]

Digitalmagnus said it nicely in a previous post. We must be able to make this currency suitable for day to day transactions with minimal compromise on the security

1) Transaction times - Starbucks, gas station and grocery lineups (something many of us deal with daily) are long enough as it is, can you imagine the patience of people in a lineup to wait for your 10 minute cryptocoin transaction to go through?! Or imagine on black Friday, you need to purchase that $1,000 flatscreen and BestBuy makes you wait for 6 confirmations (~1hour) before approving the transaction. We BADLY need transaction times to be 30 seconds or less, ideally on par or better than credit cards. This IMO is the #1 hurdle to mass adoption. Who the heck wants to wait around to pay for something? And which business owner wants less customers because they are too frustrated waiting around to buy something?

I did some progress on this. Basically I believe you can make small 0-confirm payments for small amounts in account ledger system. By small amounts I mean small in relation to your full balance. If you have 100 coins in account you could make 0-conf tx for let's say maximum 10 coins. I think it would be enough for most real world uses. It could came at cost of slightly longer confirmation of big transfers but I think such transfers have far less requirements on speed. I guess that if you would use some online wallet service you could have almost all tx instantaneous because "smallness" would be counted from total balance of wallet owner which should be huge. What do you think?

[UniversalTrek]

Do we have an estimate for the release of this coin yet?

[_ingsoc]

Do we have an estimate for the release of this coin yet?

TacoTime said earlier that he wants to make a few changes to the paper and get it finalised, after which he'll start assembling the dev team.

[aaaxn]

Do we have an estimate for the release of this coin yet?

We don't even have estimate for start of implementation date 

[Luckybit]

Digitalmagnus said it nicely in a previous post. We must be able to make this currency suitable for day to day transactions with minimal compromise on the security

1) Transaction times - Starbucks, gas station and grocery lineups (something many of us deal with daily) are long enough as it is, can you imagine the patience of people in a lineup to wait for your 10 minute cryptocoin transaction to go through?! Or imagine on black Friday, you need to purchase that $1,000 flatscreen and BestBuy makes you wait for 6 confirmations (~1hour) before approving the transaction. We BADLY need transaction times to be 30 seconds or less, ideally on par or better than credit cards. This IMO is the #1 hurdle to mass adoption. Who the heck wants to wait around to pay for something? And which business owner wants less customers because they are too frustrated waiting around to buy something?

I think in these examples you wouldn't need to wait for 6 confirmations. You're in the store, they have your real name and identity on record, all you have to do is sign here and one confirmation should be enough. Maybe I'm wrong?

[JessicaMILFson]

Some other food for thought

General musings: For what is bitcoin useful as a currency?
Generally a currency is usable as a store of value and as a medium of exchange. A currency is more attractive if it fulfills any of these two functions better than a competing currency. We will explore how to improve on these functions in this post.
Buying and selling stuff: Bitcoin as a medium of exchange

A currency is worthless if you can never exchange it to goods, services or something else you desire. We all know that payment via bitcoin is incredibly secure in that there is no chargeback risk and almost no transaction cost. Drawbacks of bitcoin as a medium of exchange is the volatility of exchange rates to other currencies, long confirmation times, lack of ecommerce support, lack of merchant adoption, lack of point-of-sale support and lack of user-friendly interfaces. Let's review these points one by one.

Long confirmation times: This is completely irrelevant in cases where other aspects of the transaction dominate its speed, e.g. in ecommerce shipping completely dominates transaction times. In delivery of digital goods, e.g. music, or acces to content bought through micropayments much quicker transaction times are desirable, preferably in the range of less than a second to guarantee high customer satisfaction. We all know that the protocol does not support this kind of instant transaction, so some kind of service has to exist to mitigate this. Green adresses or some other kind of protocol extention may amend this but in the meantime a provider of such a service can make a profit.

Lack of ecommerce support: Merchants do not write their own software to accept payments but use third-party software. So if someone wants to accept payment in bitcoin and the software they use does not support it, they are unable to. Of course, long-term bitcoin will be supported, either natively or through a payment processor, but our goal is to make this short- to mid-term. If you are in contact with ecommerce software suppliers, contact them and ask for bitcoin support, either natively or though payment processors like Bitwallet or Bitpay. If you are a merchant say so and your word will carry more weight.

Lack of point-of-sale support: This plays into the first bullet point. Payments have to be quick and painless. Also, the merchant has to accept the payment somehow. If we are not talking about a service that is paid by wire transfer but a store or a café, cheap infrastructure needs to be in place to accept coins. Traditional manufacturers of these kind of hardware can be contacted or alternative solutions based on tablets or smartphones can be implemented.

Lack of merchant adoption: All the bullet points above play into this. Ultimately though merchant will adopt bitcoin if and only if they expect increased sales or if they at least avoid lower sales by that. Hoarding bitcoin counteracts this as is thus not in the interest of bitcoin holders. Convince merchants to adopt bitcoin by promising them a minimum transaction volume in the case they accept bitcoin. I propose a campain where you distribute some kind of short and comprehensive infomaterial together with a note of promise that you will do business with the merchant.

Lack of user-friendly interfaces: Any service is dominated by how easy it is to use. Most improvements will thus be achieved by easing the use of bitcoins. To reach this goal you can implement services completely analogous to today's services already in place, that is Paypal like online payments, a bitcoin debit card or even bitcoin paper money. These are technologies that people are familiar with and may be more willing to use. The bitcoin donate button advertised in this subreddit is a supreme example for this. Also, don't be afraid to implement more archaic technologies like transfers by SMS. These services can be very useful in less developed countries and markets where internet access is not ubiquitious, while mobile phones are owned essentially by everyone, but present strong possibilities for growth.

Digitalmagnus said it nicely in a previous post. We must be able to make this currency suitable for day to day transactions with minimal compromise on the security

1) Transaction times - Starbucks, gas station and grocery lineups (something many of us deal with daily) are long enough as it is, can you imagine the patience of people in a lineup to wait for your 10 minute cryptocoin transaction to go through?! Or imagine on black Friday, you need to purchase that $1,000 flatscreen and BestBuy makes you wait for 6 confirmations (~1hour) before approving the transaction. We BADLY need transaction times to be 30 seconds or less, ideally on par or better than credit cards. This IMO is the #1 hurdle to mass adoption. Who the heck wants to wait around to pay for something? And which business owner wants less customers because they are too frustrated waiting around to buy something?

I think in these examples you wouldn't need to wait for 6 confirmations. You're in the store, they have your real name and identity on record, all you have to do is sign here and one confirmation should be enough. Maybe I'm wrong?

[JessicaMILFson]

I'm searching and digging for any criticism of Bitcoin in attempt to identify the flaws so that we are aware of the limitations and can make attempts to address them. Here are my findings:

The biggest real threat is technical. The protocol isn't quite robust enough to handle large scale (ie: $1 trillion dollar equivalency) and above transaction rates.
That technical challenge WILL be addressed somehow and it probably WON'T be addressed directly with Bitcoin. The risks to fragmenting Bitcoin would be too great and consensus can't be reached on some of the technical issues.

The result is that Bitcoin will probably end up being useful only for larger, less frequent transactions and something else will be built on top of it or alongside it to handle the pooling of those larger, less frequent transactions.

It can't be killed except by hard forking repeatedly with in-fighting. One or two instances of that will likely lead most people to adopt a "just leave it alone" attitude which will save it, but lead to it being useful for only larger, less frequent transactions.
BTW, most people haven't considered that no action at all would have been just fine during the last bug related hard-fork situation. More and more of those situations will lead people to realize that "leaving it alone" is the default and best option.

As we know, centralization allows us to receive Fiat money for whatever work we would like to do. That is one of the Pros of government. Our raw work converts into "money". With Bitcoin however, the only way for us to earn it is via Mining. While Mining in itself is great with keeping a solid inflation rate, it doesnt allow for public adoption. The main issue with Bitcoin is acquiring it. Difficulties surrounding converting fiat to Bitcoin (fiat has been described as having an umbilical cord to Bitcoin) are deemed to increase and grow. Unfortunately, changing this is very difficult.

However, another old coin unknown to most has semi-fixed this issue. Anyone heard of Devcoin? It's about as old as Bitcoin somewhat, and allows people to be paid via their "open-source work" and also by mining. Devcoin allows miners to make 10% of each block, while 90% of mining goes to people who actually work for it. The main "product" that people earn Devcoin for is writing, however other projects are available.

Unfortunately, Devcoin has two issues also, or to be more correctly defined, two imperfections. Only "open-source work" is paid, which essentially means that you cannot sell your work. Everyone has your work's core fundamentals. Under deeper inspection, this isn't a really big issue. You just can't continually make money off of one product. Also, you could have a very large project that you have finished, but the payment you can receive is essentially variable. Devcoin's second imperfection is that the payment system IS centralized. Devtome is what handles the payment system, and while payment for writing is automated, payment for projects is not.

You receive payment via a share system. Payments go out every "round" (essentially every 3000-5000 blocks). For writing, every 1,000 words equates to one share. The total amount of shares then allow proportional payment of each round to go out. Each round is roughly 180 million devcoins if my memory serves me right. However, with projects that don't involve words, SOMEBODY needs to determine and assign the number of shares that THEY believe is fair for the project. Due to the way Devtome is built, it can become decentralized. The whole issue is built upon how we go about creating a script that judges how many shares something is worth, or if we need a script at all (Democratic voting).

Something like this needs to be attempted to be added to Bitcoin. Yes, this would require a fork, so around 60% of the network would have to agree with the changes for it to be implemented correctly (theoretically 51% is the requirement, but there is the probability factor with block solving as well). If a system was implemented that would allow us to not only be paid using the share system for "open-source work", one that also allows us to be paid directly in Bitcoin by proof of sales of products would be nice as well. However, such a payment system without government is completely hinged off trust. That is why I have written this thread. We need to brainstorm a way for such a system to work. Essentially, the central question is: "How can someone be paid fairly for sold products without relying on trust and the word of the merchant?" Once such a solution is figured out, and if the network accepted such a change, Bitcoin would be set to go mainstream instantly. Mining alone cannot be the way Bitcoin works. Mining alone ties acquiring Bitcoin directly to Fiat money, which is what I believe personally to be the worst thing Bitcoin is facing right now.

[digitalindustry]

one day when i have the time i'm going to read this whole topic -

that and finish Riven , that was a great game man.

actually the whole myst series was great !

[Luckybit]

I'm searching and digging for any criticism of Bitcoin in attempt to identify the flaws so that we are aware of the limitations and can make attempts to address them. Here are my findings:

The biggest real threat is technical. The protocol isn't quite robust enough to handle large scale (ie: $1 trillion dollar equivalency) and above transaction rates.
That technical challenge WILL be addressed somehow and it probably WON'T be addressed directly with Bitcoin. The risks to fragmenting Bitcoin would be too great and consensus can't be reached on some of the technical issues.

The result is that Bitcoin will probably end up being useful only for larger, less frequent transactions and something else will be built on top of it or alongside it to handle the pooling of those larger, less frequent transactions.

It can't be killed except by hard forking repeatedly with in-fighting. One or two instances of that will likely lead most people to adopt a "just leave it alone" attitude which will save it, but lead to it being useful for only larger, less frequent transactions.
BTW, most people haven't considered that no action at all would have been just fine during the last bug related hard-fork situation. More and more of those situations will lead people to realize that "leaving it alone" is the default and best option.

I think you are onto something here. This should be given a priority as an area for Netcoin to improve on Bitcoin. You've identified a potential competitive advantage.

As we know, centralization allows us to receive Fiat money for whatever work we would like to do. That is one of the Pros of government. Our raw work converts into "money". With Bitcoin however, the only way for us to earn it is via Mining. While Mining in itself is great with keeping a solid inflation rate, it doesnt allow for public adoption. The main issue with Bitcoin is acquiring it. Difficulties surrounding converting fiat to Bitcoin (fiat has been described as having an umbilical cord to Bitcoin) are deemed to increase and grow. Unfortunately, changing this is very difficult.

However, another old coin unknown to most has semi-fixed this issue. Anyone heard of Devcoin? It's about as old as Bitcoin somewhat, and allows people to be paid via their "open-source work" and also by mining. Devcoin allows miners to make 10% of each block, while 90% of mining goes to people who actually work for it. The main "product" that people earn Devcoin for is writing, however other projects are available.

Unfortunately, Devcoin has two issues also, or to be more correctly defined, two imperfections. Only "open-source work" is paid, which essentially means that you cannot sell your work. Everyone has your work's core fundamentals. Under deeper inspection, this isn't a really big issue. You just can't continually make money off of one product. Also, you could have a very large project that you have finished, but the payment you can receive is essentially variable. Devcoin's second imperfection is that the payment system IS centralized. Devtome is what handles the payment system, and while payment for writing is automated, payment for projects is not.

You receive payment via a share system. Payments go out every "round" (essentially every 3000-5000 blocks). For writing, every 1,000 words equates to one share. The total amount of shares then allow proportional payment of each round to go out. Each round is roughly 180 million devcoins if my memory serves me right. However, with projects that don't involve words, SOMEBODY needs to determine and assign the number of shares that THEY believe is fair for the project. Due to the way Devtome is built, it can become decentralized. The whole issue is built upon how we go about creating a script that judges how many shares something is worth, or if we need a script at all (Democratic voting).

Something like this needs to be attempted to be added to Bitcoin. Yes, this would require a fork, so around 60% of the network would have to agree with the changes for it to be implemented correctly (theoretically 51% is the requirement, but there is the probability factor with block solving as well). If a system was implemented that would allow us to not only be paid using the share system for "open-source work", one that also allows us to be paid directly in Bitcoin by proof of sales of products would be nice as well. However, such a payment system without government is completely hinged off trust. That is why I have written this thread. We need to brainstorm a way for such a system to work. Essentially, the central question is: "How can someone be paid fairly for sold products without relying on trust and the word of the merchant?" Once such a solution is figured out, and if the network accepted such a change, Bitcoin would be set to go mainstream instantly. Mining alone cannot be the way Bitcoin works. Mining alone ties acquiring Bitcoin directly to Fiat money, which is what I believe personally to be the worst thing Bitcoin is facing right now.

Perhaps this problem can be solved without a fork. Human beings can with the help of AI can be paid to rate digital content and assign value to it. There should be a minimum value but no maximum, and I think this can be accomplished by allowing a limited amount of bonuses but an unlimited amount of tips. So if I like an article I read on Devtome I should be able to vote to give it a bonus provided there is some way to lock my vote in as part of my digital identity. This is possible through digital signatures tied to the wallet itself. So yes I think a web of trust is technically possible and a rating ot voting system is technically possible.

The problem is fraud is also possible, but really it's no different from the fraud that already goes on with sites like Amazon which relies on ratings, or Itunes, or movies. I think a combination of micro payments and bonuses will allow for community consensus to shape the pay structure while also keeping minimums so that even a crappy writer can make the minimum amount of money a crappy writer can make. I also think the solution if found will involve artificial intelligence, if anyone has the expertise in that area then they could solve it as there would certainly be enough processing power through the network to handle it.

I will have to think about this more and maybe see what Ethicoin comes up with but I agree with you, the most critical feature of a currency is the ability to work for it. Just being able to spend it isn't good enough and is the main reason Bitcoins aren't getting big as fast as they could be. This is an area for where a competitive advantage is possible.

[Luckybit]

I'm searching and digging for any criticism of Bitcoin in attempt to identify the flaws so that we are aware of the limitations and can make attempts to address them. Here are my findings:

The biggest real threat is technical. The protocol isn't quite robust enough to handle large scale (ie: $1 trillion dollar equivalency) and above transaction rates.
That technical challenge WILL be addressed somehow and it probably WON'T be addressed directly with Bitcoin. The risks to fragmenting Bitcoin would be too great and consensus can't be reached on some of the technical issues.

The result is that Bitcoin will probably end up being useful only for larger, less frequent transactions and something else will be built on top of it or alongside it to handle the pooling of those larger, less frequent transactions.

It can't be killed except by hard forking repeatedly with in-fighting. One or two instances of that will likely lead most people to adopt a "just leave it alone" attitude which will save it, but lead to it being useful for only larger, less frequent transactions.
BTW, most people haven't considered that no action at all would have been just fine during the last bug related hard-fork situation. More and more of those situations will lead people to realize that "leaving it alone" is the default and best option.

I think you are onto something here. This should be given a priority as an area for Netcoin to improve on Bitcoin. You've identified a potential competitive advantage.

Scaling. The Bitcoin protocol requires that every node in the network download a copy of every Bitcoin transaction that has ever occurred. As Bitcoin has grown more popular, running the “full” Bitcoin client has become more and more resource-intensive. The last time I started up my Bitcoin client, it took several hours to download all the transactions that had occurred in the few weeks since the last time I ran it.

To prevent things from becoming completely unwieldy, the Bitcoin protocol limits the size of each “block,” the basic unit of Bitcoin’s shared transaction register, to one megabyte. Since one block is created every 10 minutes, on average, this places a hard limit on the number of transactions the network can process each hour.

Right now, the network is operating well below the limit. But it’s not that far below the limit. If the Bitcoin economy continues to grow rapidly, we’re likely to hit it in the next few years.

Reaching the limit wouldn’t be catastrophic; the Bitcoin protocol has an elegant system of transaction fees to process the most urgent transactions first. But it does place some limits on Bitcoin’s long-term future. For example, it’s hard to imagine Bitcoin ever becoming a replacement for conventional credit cards. There are far too many credit card transactions for the Bitcoin network to accomodate.

Let me ask this, why can't there be supernodes which are specialized to process Bitcoin transactions and which have the capacity to do it? Is it because of the fear of centralization? The Internet relies on a backbone because latency would be too high if it didn't.

[JessicaMILFson]

Same here! Please don't announce it yet! PLEASEEEE

[GarrusV]

What's the best way to get involved if you have no technical experience? Would that be with a donation?

[hennessyhemp]

Kickstarter?  Sweet...I'd buy in on that.  You giving out T-shirts...while that started as a joke...maybe it would be a good thing...especially at a bitcoin conference.

[Benny1985]

I read through since I posted it, but has there been any discussion on my idea of colored coins as a way to make the coin more understandable in its division, or if this is how Taco wanted to approach it?

I think its very important that such a convention is implemented so that people can easily numerate between fractions of the currency, in the event that it becomes very large. That way, we're not dealing with the issue of there being "Just X million coins", as the interface will readily show that there are in fact "X quadrillion coins of the basic color/naming convention"

[glendall]

one day when i have the time i'm going to read this whole topic -

that and finish Riven , that was a great game man.

actually the whole myst series was great !

Wow, Riven.. ! I think you are a bit behind on your gaming duties digitalindustry.

[rbdrbd]

I read through since I posted it, but has there been any discussion on my idea of colored coins as a way to make the coin more understandable in its division, or if this is how Taco wanted to approach it?

I think its very important that such a convention is implemented so that people can easily numerate between fractions of the currency, in the event that it becomes very large. That way, we're not dealing with the issue of there being "Just X million coins", as the interface will readily show that there are in fact "X quadrillion coins of the basic color/naming convention"

I thought about your idea and I personally like it. Such a system could actually be implemented as a sort of "convention", instead of hardcoding the ledger system/protocol factoring in these different coin denominations. So for instance, let's say that there are 11million netcoins in existance. The highest denomination would be a "gold" netcoin, each of which is equal to 1 whole netcoin. Then, you have silver netcoins which are 1/10th of a netcoin each, and bronze netcoins which are 1/100th. If you have 3.4563 netcoins, the client could display that automatically broken out as gold, silver and bronze, while the ledger still tracked it as 3.4563. Instead of having to track multiple types of coins, it' simply becomes a convention. As cliche as it sounds, I'd advocate working more with the "gold", "silver" and "bronze" denominations, or something that holds intrinsic meaning to folks, instead of arbitrary colors (why is a "red" netcoin worth more than a "blue" one?). "Large", "medium" and "small" could work too...e.g. I have 1 large netcoin, 5 mediums and 15 smalls.

EDIT: After thinking some more about the "display hack" method of denominating coins, I think it's probably too leaky an abstraction (e.g. exchanges would most likely continue to work with the whole coins and use decimals...cryptogeeks as well). The other method (using colored coins of some sort) would not be such a leaky abstraction, but could have its own issues when talking about things such as:
* how does a user easily convert between coins (e.g. from silver to gold)
* would you have separate exchanges for each coin type, or one exchange for one coin type and force people to that type to trade?
* etc.

Some more general comments: From my reading on these forums, my opinion is that people have a bias against low numbers of coins (higher numbers of coins and especially WHOLE coins are seen as "better" and "more desirable". Total float and per-coin valuation is almost secondary to most folks TO AN EXTENT -- not talking about BBQCoin levels here, but definitely avoiding bitbar levels at all costs). I think it's an intrinsic human property that is much older than currency itself. The first question is always "how many?", not "what is the conversation rate?" or "how many are outstanding total?"

Also, most people tend to hate working with decimal spaces. I think a lot can be done to drive coin adoption and innovation via harnessing our own collective observations about how people view and think about unit value of any kind of currency. Splitting the currency across 3 or 4 denominations to reduce decimal bloat has very pertinent corollaries in meat-space currency (both of a fiat and non-fiat nature) and I think most folks would take to it like ducks to water.

I've been designing and developing software for awhile now. What I've learned is that you can NEVER underestimate simplicity and a strong visual impact. Our company has had offerings that had a ton of technical chops around them, but at the end of the day the kinds of things that really jazz our clients up are the simpler things, such as the simplicity of the UI, or real-time dashboards where the info is all in one place. Emotions and excitement arise most around what the eye can see and the mind can quickly understand. These things can be just as important to general adoption as the technical chops, and should not be discounted. There is a certain kind of inherent complexity with cryptocurrencies (at least at this point in the game), but I think a lot can still be done without investing millions on hardware wallets, P2P payment networks, etc.

A good rule of thumb for me is if I witness trends like this on the forums (where most people tend to be computer savvy, investment savvy, or both), then the effect will like be magnified greatly once you start involving the general population. Us geeks have a tendency to write factors like this off as trivial, but we are living in a fishbowl when we do. Go ask enough people on the street and your assumptions will likely change. Many of those same people could become netcoin users if/when this does take off.

[GarrusV]

I don't know if anyone has suggested this yet, but would it be possible to shorten the address associated with your wallet because currently it's more or less unreadable and very difficult to memorise in your head.

[hennessyhemp]

I don't know if anyone has suggested this yet, but would it be possible to shorten the address associated with your wallet because currently it's more or less unreadable and very difficult to memorize in your head.

The likely answer is no.  It is a necessary security protocol that makes those long addresses, which is what keeps it secure.  Most are built in to recognize the first six characters though...and you can typically use the paper wallet sites to give yourself a "vanity" address which would make it much easier.

The current level of complication required to use crypto-currency will keep it limited in terms of access by the general public, so I certainly agree that simplification is our greatest ally in adoption.  This project and even Digital coin have great potential due to the ease of mental adoption...even a non geek would understand a "digital" coin or a "net" coin, even more-so than a "bit" coin.

What I love about all crypto currencies is the fact that they are already the back-end protocols on which the banking systems of the world will run, they just haven't been implemented as such...yet.  Looking at Buttercoin and extrapolating what a success could potentially do to Wall Street...it could very well become the standard trading platform used by NYSE and others, as an open source version would be much less prone to outside manipulation, and could change the way the world works with finance.  I really like the idea of gold and silver operating on an open source exchange...that would be something, as the price would be based on what the people are willing to pay, not the banks.

Also...get this project on the map with Buttercoin's members so we can run right alongside BTC early on.

I'd love to see multiple pools in multiple places throughout the world available to miners from day one.