Hello everyone. In order to avoid people calling the Alt coin I am going to release a premine scam, I am taking the initiative and giving a
minimum six-week announcement before release. As I get closer, I will divulge exact time of launch, and will have example configs, and all the info you need to have to mine the early blocks (cgminer settings that work best, etc.)
The coin will be Scrypt-based, will have absolutely ZERO premine, and will attempt to counter one of the issues with cryptocurrencies today.
The coin will hold foundations in community input and trust. Due to an early announcement which has, so far, gotten a fair response (5 pages), and further announcements along the development line, it will be quite well announced. As well, I am going to take input, clean it up a bit, make some graphics, and have additional criticism from the community, along with perhaps a vote. While some of the other coins seem to be made for quick profits or weekend projects (nothing wrong with that!), this coin will hopefully hold some value in the economic ideas that went into its creation, in order to balance inflation and deflation, while still allowing for some early adopter profitability.
The coin itself will have a block reward that increases with hashing power. While this doesn't benefit early miners as much as current alt coins, it makes the coin have a more forseeable future. While the details are still sketchy, I plan to program the coin to award the square root of the current difficulty times some convenient constant. For example (subject to change a TON), a block when the total network hashrate is 1MH/s would be worth one coin, however a block when the network hashrate is 2MH/s would be worth around 1.41, and a block when the network hashrate is 10MH/s would be right around 3.3. When hash rate gets to 100MH/s, the block reward is 10 coins per block.
The idea is to make coins have some hope of keeping up with increased adoption. A one-to-one ratio of hash power would cause trouble with pump-n-dump, or hyperinflation of the coin. However, increasing block reward as difficulty increases in a non-linear fashion allows the coin to not be so hard for latecomers to adopt, while still giving early adopters their fair share of earnings.
I am completely open to suggestions, and have barely started on the code itself yet. I would be more than happy to have some suggestions for that "magic constant," as well.
Name suggestions. I need them. Thanks
A bit of the explanation to the economics behind the coin:
With a square root reward, the early starting difficulty would not provide significant coinage, so the first hour people would not have a huge advantage.
With the square root reward, ASIC market manipulation is reduced. If ASIC devices are created, if they outpace the network 10:1, they will only increase the block reward by ~3.3 or so. For all of the investment in ASIC hardware, this seems about right.
While it is true that the coin supply per minute would increase over time, so would the user base. If you have a community of 100 people, then $100 in circulation might be enough. However, if you have a community of 10,000 people, they would have to share that $10,000 in the standard Bitcoin model. This causes inflation of the value of each dollar, so each of the 100 people who had on average $1 is now much more rich, as that resource should be $0.01 per person. However, if the 100 person community grew to 10,000 people, but the coinage in circulation was grown to $10,000, the people who were originally in that village don't have anything over the newcommers, as would occur with a linear model. However, if the new 10,000 people village had $3,000, then the dollar would be worth more than it was in the day of the 100 person community, but would still not be as painful to join for late arrivers, and ensures a more fair distribution of resources inside of the community, keeping up production rates to scale in a non-linear fasion with demand has some interesting, yet-to-be-tested economic effects in supply/demand economics, but my personal guess is that the currency will act as if it had a "buffer" against rapid increases and decreases of price, apart from speculation.
One issue that arises is that, while the money supply increases, block mining turns from a "I made the equivalent to a cupcake!" to "I made the equivalent of a new car!?!". This is an interesting side effect, making the block reward less of a job and more of a lottery. However, by the time the block reward is significantly bigger than the starting position, pools will have popped up, and almost all mined blocks will be mined by pools and distributed to users, with a few solominers playing the lottery if they so choose. The same lottery occurs with Bitcoin today, but instead of the number of coins increasing, the value of the coins is increasing at a steady rate, and seems to be currently taking a nap around $115-120.
While the square root may not be the ideal magic value, I feel that it will take the benefits of both sides: reducing inflation while increasing fairness.
I will hold a public poll for the name of the currency in the next week or so. If you have additional suggestions, please enter them in this thread within the next day or two!
Explanation as to why square root:
As computing gets faster, either with faster generations of Graphics Cards (per dollar, or per Watt), or with FPGA/ASIC mining devices, I don't want the supply to explode. It makes sense for the currency to get larger as more people adopt it, but not as hardware evolves to be faster (in my opinion). This leads me to the square root idea: while the coin reward would increase with higher hashing power, the square root acts as a sort of permanent buffer against some of the extreme hashing power that could join the network.
I also had another idea, not sure quite how the implementation would work, but the constant C would go down with increasing block number, in accordance to Moore's law. Basically, it would attempt to keep coins/$ of hardware relatively the same throughout its existence. It would run into a few problems though: ASICs break Moore's law (in the sense that a 2-year development is a 10x or more increase in hashing power), and Moore's law will end at some point, due to the inability of chip manufacturers to make smaller die sizes. It has to end somewhere, some people say 10 years, others say 15-20.
Legality: According to the United States of America Stamp Act, creating your own
physical currency is illegal. This currency is digital. The United States has, to some extent, even embraced Bitcoin, in an attempt to tax it and prevent money laundering operations. Bitcoin has blazed a trail of legal and social acceptance. Therefore, the making or use of this coin will not be illegal in the United States. No idea about other countries, I'm not a law expert.
