Who could be trusted to do governance?

[iamnotback]

If a coin was going to copy Dash and Zcash's model of having some portion of transaction fees (more generally block reward) paid to a governance board which then distributed the funds, who would you trust to be on this board and what percentage of the board's funds would you want paid to the members of this board for their effort to manage the distribution of the funds?

Bitshares learned that if you let everyone vote, you end up with rigor mortis due to political turf battles, i.e. a power vacuum. So for Steem they did a sneaky stealth "pre"mine to make sure the principals control 80% of the money supply. Essentially they copied Dash which has a sneaky "bug" "pre"mine so that the insiders got a huge portion of the tokens and thus control the money supply and voting (probably via proxies so they can hide their control).

So in lieu of doing some scam like those, the only way I can see to make a governance work is to permanently install trusted board members and then pre-program in the protocol to dissolve the entire funding source after a set period of time once the initial bootstrap development is completed. Perhaps a 2 - 5 year period. What do you all think?

Feedback please. Ideas?

Those doing governance would need to be very technical so they understand the visionary developers. Yet they need to be solidly grounded. And they need to not have a conflicting agenda.

The first person who came to my mind is @smooth, but he has conflicting vested interests.

P.S. I am not saying it is a good idea to do because it involves centralized trust (and don't we want decentralized and trustless?), but during bootstrap stage possibly it can help to have a funding source. I am starting a discussion if anyone is interested to discuss.

P.S.S. Feel free to discuss legal implications as well if you want. Note that providing the illusion of (i.e. ostensibly hiding the ownership of your masternodes via proxy owners, etc.) decentralized voting that the Steem and Dash scams do, is probably intended to be a way to avoid issues with the law about investment securities.

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[AusKipper]

I'm new, as you know, so take with a grain of salt, as you will.....

1. The top 500 (random number, enter number there that you see fit) miners in the last 30 days or X blocks should be able to vote. Same people are the only ones able to submit ideas to be funded.
2. The percentage of income to the "treasury" would depend on the emission scheme of the coin, but assuming something like bitcoin, 1 percent of the block mining and 1 percent transaction fees should be enough. I think Dash's 10 percent is way too high.
3. No end time on the treasury, ongoing.
4. Unspent treasury is distributed to all miners equally (based on work over the 30 day period or whatever period). If no agreement on spending can be reached then automatically distributed in this fashion.

[iamnotback]

I'm new, as you know, so take with a grain of salt, as you will.....

1. The top 500 (random number, enter number there that you see fit) miners in the last 30 days or X blocks should be able to vote. Same people are the only ones able to submit ideas to be funded.

Their economic incentives don't always align with the best directions for the development of the coin. Also they may be deficient in technical understanding of complex issues.

3. No end time on the treasury, ongoing.

Problem is it becomes a centralized resource to fight over. It eventually it will be controlled by those at the top of the power-law distribution. So it will be a "the rich collect rents and parasite" formula. So I don't think perpetual is a good idea. The centralized bootstrap should get out of the way and let the ecosystem fund itself decentralized as Satoshi did when he stepped aside.


How about decentralized voting by the token owners wherein they vote their stake in the treasury separately from the others, i.e. not monolithic appropriation?

But after developers get this ICO money, it is down to them to use that money, how to use  and allocate it, how to control the development process etc. I don't think there are any procedure to punish them.

An idea popped into my mind.

What if ICO coin buyers vote on each release of the budget. They only get to vote up to the value of the tokens they own. They can vote any fraction of their tokens on any budget release. Once they've voted all their tokens, they can't vote any more.

The approved releases are taken from the pool of BTC. Any of the pool not released after a certain period of time, is returned back to all ICO investors proportionally.

What do you think? See any flaws in it?

One flaw is that it means some ICO owners can hold the other owners hostage, by refusing to fully fund what the developer thought had been raised already. But I am not sure that is really a flaw. It means the devs have an ongoing incentive to perform. I am very sleepy so I might have a major flaw in this idea.

[AusKipper]

I'm new, as you know, so take with a grain of salt, as you will.....

1. The top 500 (random number, enter number there that you see fit) miners in the last 30 days or X blocks should be able to vote. Same people are the only ones able to submit ideas to be funded.

Their economic incentives don't always align with the best directions for the development of the coin. Also they may be deficient in technical understanding of complex issues.

I guess you will always have both those problems with any kind of fairish voting system.

Another 2 options:

1 - Allow the development team to (heaven forbid) pre-mine some coins for themselves, they get paid when they make them worth something

2 - A perfectly fair launch with no treasury system and the developers beg for a different currency to fund development (USD, Bitcoin). People have incentive to fund good development as it will increase the value of their holdings. This does obviously means that people that hold the coin but dont help with funding the development get a "free ride".

[Spoetnik]

This is the ultimate problem in crypto.
Remind me of the old days of MemoryCoin before they went on to do Protoshares / Bitshares.
That coin MEM is a worthy mention for this topic.. which i have explained lots before.

I see a centralization problem everywhere.
And if it's an automated / decentralized thing then i guess it's going to suffer like Mr. Moore here said.

Look at Monero and the guy running MEW, hell look at any coins.
They all have a head figure of sorts etc.. which pulls the strings etc.

Every coin is hosted on Github pretty much and who has the Password ?
And who does Github report to ? I know for a fact from Piracy circles they are US Govt compliant 100%.
I believe this forum is also.

Follow the trails and it starts to look ugly.

Decentralized automation of sorts is the answer and if it gives a bad result then oh well.
For example we need a fully autonomous exchange solution.
I can't wrap my head around how hard that would be to make.
Imagine Cryptsy or Poloniex or Bittrex etc all fully 100% decentralized running on it's own basically.
So you could do the exact same thing as you do on them now.. that's a LOT of code !
That was the next step after Bitcoin we never took.

[dinofelis]

If a coin was going to copy Dash and Zcash's model of having some portion of transaction fees paid to a governance board which then distributed the funds, who would you trust to be on this board and what percentage of the board's funds would you want paid to the members of this board for their effort to manage the distribution of the funds?

The government.  

Honestly, if there is a "trusted party" to be had, it is the government.  Trump, the United Nations, Putin, the European Union, or some other "trusted entity", no ?

I don't know why one would go through all the crypto hassle to end up with the equivalent of Putin or Trump, with the equivalent of the European Union or the United Nations.  Because that is what will happen if there is "aristocracy", that is to say, "people who are different from others, because they have institutional decision rights which others haven't".

Satoshi knew this and pulled out before people asked him to "rule".

[AusKipper]

The government.  

You know, If we picked the right one (Australian, Norwegian, New Zealand, Denmark, Finland) It probably would be about the safest bet. (to handle the distribution of funds, not to run the development team)

[iamnotback]

1 - Allow the development team to (heaven forbid) pre-mine some coins for themselves, they get paid when they make them worth something

I am also coming to the conclusion that is the only way to do it because all other ways appear to be illegal. And that was my original plan in 2014, but was told by everyone that premine was horrible. Yet I've come to realize that every project was premined, even Bitcoin and Monero. There was always some limited number of people who were mining with huge resources at the very start when the difficulty was miniscule.

[AusKipper]

1 - Allow the development team to (heaven forbid) pre-mine some coins for themselves, they get paid when they make them worth something

I am also coming to the conclusion that is the only way to do it because all other ways appear to be illegal. And that was my original plan in 2014, but was told by everyone that premine was horrible. Yet I've come to realize that every project was premined, even Bitcoin and Monero. There was always some limited number of people who were mining with huge resources at the very start when the difficulty was miniscule.

Yep, The issue here, as you obviously know:

- When the coins are still worthless at the start, and you really need money to pay developers, you have none.
- Once its gone, its gone.

I still think, despite the issues, the first idea I posted is the best long-term (Dash style mining percentage, voting system)

If you wanted to you could bake in a percentage reduction over time, ie, 10% (Dash) goes to the treasury initially, reduced over time till you hit .001% after an amount of time (10 years?)
 and then its sits steady there forever.

Votes on treasury spending should be divided between both miners and wallet holders in a balance that you would know better than me.

[iamnotback]

- When the coins are still worthless at the start, and you really need money to pay developers, you have none.

I am a developer. I eat rice. I live in the Philippines and $300 monthly rent, $256 child support, etc. I have angel investors for my basic needs.

Open source. Anybody can code on it.

I still think, despite the issues, the first idea I posted is the best long-term (Dash style mining percentage, voting system)

Illegal.

And its competing for a coming ICO graveyard of bankrupted fools.

[cengsuwuei]

If a coin was going to copy Dash and Zcash's model of having some portion of transaction fees (more generally block reward) paid to a governance

the best regulation about governance, same youre write is USA
USA with SEC and ETF, but if SEC and ETF is nothing want receive payment from client is investigation, nothing receive bribe money,so transaction fee paid to governance is nothing to work, becuase can indicate coruption

[dinofelis]

1 - Allow the development team to (heaven forbid) pre-mine some coins for themselves, they get paid when they make them worth something

I am also coming to the conclusion that is the only way to do it because all other ways appear to be illegal. And that was my original plan in 2014, but was told by everyone that premine was horrible. Yet I've come to realize that every project was premined, even Bitcoin and Monero. There was always some limited number of people who were mining with huge resources at the very start when the difficulty was miniscule.

Seigniorage is inevitable when one creates a monetary asset.  It is considered "unfair" and can harm, as such, the monetary belief in the system, but seigniorage will always happen.
With fiat, the seigniorage goes to the government ('s buddies), and people scream "THIEF", but it is just a tax like any other.  With bitcoin, about the smartest anti-seigniorage system was thought of: you BURN it.  Every coin that is created, has WASTED as much value as it was worth (apart from a small and fair "competitive" margin).
But even with bitcoin, there is seigniorage: the first adopters could get their coins at a fraction of the value it has now.  All this "unmerited" value transfer from certain people to other people because of an "unfair advantage" (the monopoly of the state, the knowledge of the devs and their buddies....).

It is inevitable.  The only thing one should obtain, is that this advantage gets "washed out" over time.  Seigniorage is worse with PoS than with PoW for instance, because initial stakes give you the final dominance over the coin distribution.

But why don't you consider a totally different way of distributing your coin ?

Give yourself a fair premine, and make the coin for the rest a *fork of bitcoin*.  So that anyone holding bitcoin at a specific date in the past holds your coins too (and you hold your premine on top of that).  As such, you get immediately a distribution everyone considers now as "fair".  You could even only accept bitcoin that has already moved, say, at least 10 transactions at a day in the past, so that you eliminate Satoshi's stash.  

Bitcoin is a primitive coin, but has one advantage: apart from Satoshi's stash that mostly didn't move, it has a fair distribution that has a certain age.  Why not "fork" off this, and take from bitcoin what it did best, and which can only happen ONCE in history ?

[maku]

Every coin is hosted on Github pretty much and who has the Password ?
And who does Github report to ? I know for a fact from Piracy circles they are US Govt compliant 100%.
I believe this forum is also.

It is unwise to think that any centralized service or website is free from being pawn in the bigger game.
In the end it is government which controls everything. Do you remember when BFL went down?
Theymos was 'asked' by the authorities to share private messages of everyone involved in this case.
He complied to that request. How could he refuse?

[iamnotback]

1 - Allow the development team to (heaven forbid) pre-mine some coins for themselves, they get paid when they make them worth something

I am also coming to the conclusion that is the only way to do it because all other ways appear to be illegal. And that was my original plan in 2014, but was told by everyone that premine was horrible. Yet I've come to realize that every project was premined, even Bitcoin and Monero. There was always some limited number of people who were mining with huge resources at the very start when the difficulty was miniscule.

Seigniorage is inevitable when one creates a monetary asset.  It is considered "unfair" and can harm, as such, the monetary belief in the system, but seigniorage will always happen.
With fiat, the seigniorage goes to the government ('s buddies), and people scream "THIEF", but it is just a tax like any other.

Yeah thanks, let's discuss about monetary theory.

The seigniorage is the price we-the-society pay for there being confidence in the currency. For without confidence, money has no value. This is a critical point that most people under appreciate, so it is very important that readers click that link and understand more deeply the linked thread in all its detail.

The ability to get a large community to rally around one thing as money, is essential for money can't exist without confidence that it is a liquid and fairly universal unit-of-exchange.

So he who can create that confidence, gets the seigniorage.

With bitcoin, about the smartest anti-seigniorage system was thought of: you BURN it.  Every coin that is created, has WASTED as much value as it was worth (apart from a small and fair "competitive" margin).

When a developer of a project works very hard to create the confidence, he BURNS his labor which is economically analogous to getting paid and buying mining equipment and paying electricity.

The argued benefit of PoW as a distribution mechanism is that is an OBJECTIVE (i.e. trustless) free market competition and it has unbounded, decentralized participation. So it is really the distribution mechanism of PoW that is its genius, not the BURNING.

Now if someone can design another form of distribution which has the same properties, then he will have a valid alternative to PoW. I am working on such an alternative system of trustless, objective, distribution.

But even with bitcoin, there is seigniorage: the first adopters could get their coins at a fraction of the value it has now.  All this "unmerited" value transfer from certain people to other people because of an "unfair advantage" (the monopoly of the state, the knowledge of the devs and their buddies....).

Knowledge acquisition and social networking are competitive. At least in our ecosystem unlike in the nation-state model, no one has a monopoly on this competition.

It is inevitable.  The only thing one should obtain, is that this advantage gets "washed out" over time.  Seigniorage is worse with PoS than with PoW for instance, because initial stakes give you the final dominance over the coin distribution.

Agreed. An ongoing (i.e. perpetual "tail reward") PoW-like distribution is much better. But I intend to show that PoW isn't the only way, nor even the best way.

But why don't you consider a totally different way of distributing your coin ? Give yourself a fair premine,

I am.

and make the coin for the rest a *fork of bitcoin*.

Byteball did this. The problem is that when you give away coins for free to speculators, they are likely to sell them because they didn't decide to BURN anything (e.g. buy or do effort for it) for it, e.g. Auroracoin.

Also your suggestion only targets a very limited audience of Bitcoin holders.

So that anyone holding bitcoin at a specific date in the past holds your coins too (and you hold your premine on top of that).  As such, you get immediately a distribution everyone considers now as "fair".

No, you don't because those who obtained coins had nothing invested.

[AusKipper]

Agreed. An ongoing (i.e. perpetual "tail reward") PoW-like distribution is much better. But I intend to show that PoW isn't the only way, nor even the best way.

Hmm, I thought I saw you saying the other day that POW is the only viable solution lol...

It better not be a proof of storage after you have just been telling me my idea in that other thread is no good without giving me the answer to make it work!

[Spoetnik]

First thing you said Shelby was "getting paid"
That is the issue.. morality & altruism etc.

If we are going to play by this everyone needs to be paid to lift a finger game then it's just going to scale up and escalate higher and higher.

Crypto in general started out as a few guys in a basement and now it's million dollar loans for mining farms
..and multi-million dollar ICO's where the "Dev" (i use that term loosely) is paid millions.
But.. it started out with guys doing coding work for nothing in return.
Aside from having the same equal mining opportunity on launch as all the others.

If they "need" to be paid it's going to snow ball.. it always does.
I don't know who to trust for governance off hand but i would trust the guys with hands out the least LOL
I'd be looking more to people who do things with out asking for anything in return.
That may not be an answer but it should help narrow it down a bit i think.  

[iamnotback]

First thing you said Shelby was "getting paid"
That is the issue.. morality & altruism etc.

If we are going to play by this everyone needs to be paid to lift a finger game then it's just going to scale up and escalate higher and higher.

Crypto in general started out as a few guys in a basement and now it's million dollar loans for mining farms
..and multi-million dollar ICO's where the "Dev" (i use that term loosely) is paid millions.
But.. it started out with guys doing coding work for nothing in return.
Aside from having the same equal mining opportunity on launch as all the others.

If they "need" to be paid it's going to snow ball.. it always does.
I don't know who to trust for governance off hand but i would trust the guys with hands out the least LOL
I'd be looking more to people who do things with out asking for anything in return.
That may not be an answer but it should help narrow it down a bit i think.  

Why did you buy Bitcoin then?

If coin is not an ICO
1. No premine, or 1-2% premine for bounty and development
2. Fair Distribution

So don't invest in Bitcoin even when it was $10 in 2013, because Satoshi has a million (5% of all tokens that will ever be mined... well ~10% as of 2013).

Glad @rpietila followed your advice and bought $100,000 of BTC in 2013 and is now worth more than $10 million.

The problem you lament exists because the speculators want to compete with each to buy ICOs early because they are all jealous that they didn't buy Bitcoin at $1. There is no solution to that other than to take all their money from them, and give it to scammers. Because that is what happens to jealous fools.

Whereas, telling me not to creating the Bitcoin Killer advance because you don't want me to get paid what I am worth, is nonsensical. If you could somehow stop me, then I would go work on some other project not in crypto and earn the (up to) $350,000 a year I used to earn before.

[dinofelis]

1 - Allow the development team to (heaven forbid) pre-mine some coins for themselves, they get paid when they make them worth something

I am also coming to the conclusion that is the only way to do it because all other ways appear to be illegal. And that was my original plan in 2014, but was told by everyone that premine was horrible. Yet I've come to realize that every project was premined, even Bitcoin and Monero. There was always some limited number of people who were mining with huge resources at the very start when the difficulty was miniscule.

Seigniorage is inevitable when one creates a monetary asset.  It is considered "unfair" and can harm, as such, the monetary belief in the system, but seigniorage will always happen.
With fiat, the seigniorage goes to the government ('s buddies), and people scream "THIEF", but it is just a tax like any other.

Yeah thanks, let's discuss about monetary theory.

The seigniorage is the price we-the-society pay for there being confidence in the currency. For without confidence, money has no value. This is a critical point that most people under appreciate, so it is very important that readers click that link and understand more deeply the linked thread in all its detail.

The problem with seigniorage is not the LOSS by society (your analysis is correct), but rather the *unmerited gain* of those obtaining seigniorage, and hence the economic power the obtain "for nothing".

It is not so much the fact that it costs you something, it is the nasty effect to see the other guy get rich without production of value.

Seigniorage is on the receiving side, not on the paying side.  That a monetary asset network costs value is OK.  But that this value gets in the hands of some is not OK.  If it is destroyed, then that's OK.  This is what is so brilliant about PoW.

[dinofelis]

Byteball did this. The problem is that when you give away coins for free to speculators, they are likely to sell them because they didn't decide to BURN anything (e.g. buy or do effort for it) for it, e.g. Auroracoin.

There's nothing wrong for them to sell it, on the contrary.  The more a coin gets traded, the less it is concentrated in the hands of a few.  

You don't need people to "invest" in something.  The only thing you need is a large list of non-identical crypto-identity holders, so that the initial distribution is as large as possible.  If it were possible to have, in one way or another, a public key of every person on earth, that would be the most ideal distribution.  But we don't have such lists of which we know that they aren't manipulated.  As such, the bitcoin address list looks like it is one of the best.  There doesn't even need to be a correspondence between the AMOUNT of bitcoin to an address and the newly distributed coin.  You could give a single coin to every existing address.  Most of them are probably dead.  But that doesn't matter.  What is needed, is a large list of public keys, of which the secret keys are in the hands of as many people as possible.

You don't even need to TELL people immediately.  You can have them discover their holdings way later.  The important point is that whatever is used as public key, cannot be manipulated when the knowledge is out.  It has to be a list "of the past".

[irukandji]

So in lieu of doing some scam like those,

Those things are not scams.

the problem is that you undersell yourself. You don't believe your ideas are worth it. But they are. It actually doesn't matter whether your ideas ultimately work out. What matters is that we need many people like you to be creative to push to try things.
Let us take care of whether its a "scam"or not.

We are all involved in the experiment, and we can't predict exactly where it is going, so we need people like you with knowledge and ideas to experiment.
I'd happily put money into an ICO of yours.
I have done very well in crypto because I'm not afraid to take risks and to believe.

You have something to contribute. It doesn''t matter whether it is perfect.  Do it.

And remeber , if something is worth doing it's worth doing badly the first time.