Hello
Thanks for publishing the White Paper, and being open to input from the community.
I only had a quick read through, however some thoughts in no particular order;
I probably went a little deeper into my opinions than really needed (sorry) and have about a million other thoughts, so I might leave it as 5 points for now. What I can say however, is that I like the thought process so far. It's a refreshing change from the number of meme coins and dubious looking scams we get here on the forum. Good luck with the project. Zap me a PM if you do want to discuss more
Hello PotatoPants,
We wanted to start off by saying what an awesome review and we're going to try to respond to each of your points!
1) I like the idea of "disrupting" the traditional interpretation of Crypto Currency. With that in mind however, perhaps this presents an opportunity to redefine even the Whitepaper process. I appreciate that you want to stay within the boundaries of what is expected when launching a coin, however I can't help but think that the idea of what a whitepaper represents has started to become corrupted. Put simply, I'd love it if you could show me the technical design in the WhitePaper, but give me evidence of Business Validity with other documents.
1)We agree, disrupting the conventional "Bitcoin Box" thought process is one that really allows AlloyCoin to solve a new problem - volatility. We agree that white papers have become corrupted in the sense that there are many specious white papers which attempt to attract users by giving the appearance of legitimacy. Our reason was two fold: AlloyCoin legitimately has a different fundamental implementation and that our team is composed of research scientists who naturally, are familiar with the "white paper" format. AlloyCoin is different as you pointed out, namely:
it is simultaneously a business entity and a cryptocurrency. This does present the opportunity to combine both a business plan and white paper into a single document. Currently, the two are separated but this does need to be revisited for reasons you accurately describe.
2) As an example of my point above. You explore Risk a little in Section 5 (preventing reserve failure), however a technical whitepaper really isn't the place for this sort of discussion. It's great that there is some consideration of risk, however you really haven't gone far enough, or presented your risks thoroughly enough. As part of your disruption strategy, I'd love to see a risk matrix, a risk plan, treatment, and even the honest and upfront understanding that your project may completely fail. For example how about some exploration or modelling of expectations if/when your coin gets pumped and dumped by a third party? Showing me that you've considered the risks involved in launching a crypto currency will give you a much stronger foundation should things not go according to plan later when the coin is launched.
2)Exploring risk management is going to be a crucial element to describe. The section regarding risk at the moment is still in a draft phase. The risk of failure is a very real possibility and while the white paper does touch on some of our methods for mitigating this risk in
4. Evaluation, we haven't succinctly collected them and captured them in detail in a single section of the white paper. One unique aspect of AlloyCoin is that while most other coins focus on solving
technical problems, AlloyCoin is solving
economic problems, albeit in a technical way. This is one distinct advantage AlloyCoin has over other cryptocurrencies. We will keep your suggestions in mind when fleshing out the details for section
5. Preventing Reserve Failure.
3) I'll only briefly mention reference formatting. I suggest you use a academic standard such as APA (I think it's even built into Word these days). This will help you with Point 4
3)Yes, consistent formatting will be interesting while integrating a business plan with a white paper. Our format was Springer and written using LaTeX.
4) Have a look at your overall formatting. Ideally don't split lines mid sentance across pages. Coupled with your references on every page, it makes the paper hard to read. As per point 3, don't mix your references with your internal sub-notes. Also, number your pages please, so I can refer to specific pages when trying to review (or when someone asks for an explaination)
4)Springer format does use references in text but perhaps we could reduce the number of them we used. I agree, there are some pages where references almost take up a third of the page.
5) Financial Process wise, (and I may be paraphrasing or not understanding completely), I read it as there will be a Reserve Bank for Alloycoin, where you will basically try manipulate the price based on a predetermined set of rules. For the example of flash crashes, this seems to make some sense (until the Reserve runs out of coin or assets). From a business integrity veiwpoint, it gets a bit muddy, and I'm not sure how your going to "sell" this to people without the word "scam" getting thrown around, much less get this contractually sound. Obviously, you need a lot more exploration of this, and a lot more governance than the Paper shows at this point of time. Just as an example, the Reserve will hold a subset of other currency, however I'm not sure how you are going to model the highly variable nature of these currencies against Alloy coin, much less present your buy back in a concise legal document.
5)This is a
really awesome point and shows you read the paper! So there are a couple things to point out. First, AlloyCoin does work alongside its own Reserve - specifically Alloy Reserve LLC. Second, AlloyCoin is unique in that it actually has two prices instead of one. The market price and the base price. Demand determines the former while Alloy Reserve establishes the latter. There will be an interesting interaction between the two prices, but it
is not Alloy Reserve's job to determine the market price. Alloy Reserve doesn't have the ability to inflate market prices and artificially inflating the base price actually led to Reserve failure in all of our simulations. This is akin to
The Panic of 1907 more info here
https://en.wikipedia.org/wiki/Panic_of_1907 and leads to volatility - the very thing AlloyCoin is supposed to solve.
The third point is that Alloy Reserve's assets grow as the blockchain grows. This is because Alloy Reserve collects a percentage of all coins mined by the network. This means Alloy Reserve will always have a supply of AlloyCoins to sell when market prices are above the base price - and assets to liquidate to buy back coins when market prices are below the base price.
Think of Alloy Reserve as an organized, collective effort on behalf of the network to protect itself from volatility by guaranteeing a portion of the value of the market price. Like a dollar being worth 100 cents in the street (market price) and 90 cents are guaranteed by a pool of assets (base price). The difference is just a (10%) premium the market pays to acquire a coin that provides this security/stability. Each coin holder has a stake in the Reserve assets if the value of their coin were to drop. They can always "cash out" whenever they want, but usually, market prices will remain above the base price - And when they don't, Alloy Reserve guarantees to buy your coin back for the base price thereby creating a price floor.
Alloy Reserve's assets are actually distributed across other cryptocurrencies and index funds. By introducing index funds into the asset mix, AlloyCoins are rooting their value in the stock market. As these assets grow in value over time, the value of the collective price floor increases. This provides a very unique situation that no other currency has where over time, the market's growing demand for crypto increases the market price and the growth of the stock market over time increases the price floor.
Lastly, Alloy Reserve doesn't need to "scam" its users as its assets are collectively owned by the network anyways. Scamming in this implementation actually does't make sense. Any value Alloy Reserve gains from sales or the ICO go towards acquiring more assets. Note: a small percentage does go towards providing continued business services. Since Alloy Reserve profits from buying/selling and interest, Alloy Reserve really profits from volume of transactions, not from margins. The more Alloy Reserve makes, the more the value of AlloyCoin grows creating a feedback loop.
Great questions, hope this helps! Let us know if you have any more!
Alloy Reserve
http://alloycoin.comsupport@alloycoin.com
