Will you be my co-founder? (Professional Salary, Equity Stake) + Investor Poll

[dacoinminster]

For a long time, I've been advocating for a crowd-funded protocol layer built on top of bitcoin, using messages in the block chain to represent transfers of value. I wrote a paper last year (see my sig) about how such a layer could enable distributed exchange, distributed betting markets, better security features for your "savings" wallet, and self-stabilized user-created currencies built on top of it all for representing gold, dollars, crude oil, etc.

You can see me talk about how I want to invest in such a crowd-funded effort when I was on the Bitcoin Conference 2013 panel about "Bitcoin in the Future": http://www.youtube.com/watch?v=_qdr_Z3hrqQ

I would love to invest in something like this (by purchasing the "coins" of the new protocol layer), but so far, nobody has tried it.

Obviously, I have thought about trying to launch such a thing myself, but there are two things holding me back:
1) I don't have anyone to do it with me. I'd really like to have a co-founder (or two) to work alongside me
2) I don't know how much money the crowd-funding effort would raise, and I don't want to launch such an effort unless I'm pretty sure it will succeed.

This thread takes a shot at solving both problems. For the poll, assume the following:

• Bitcoins raised for crowd-funding automatically convert to ownership in the new protocol
• Like Kickstarter, if enough funds aren't raised, everybody gets their bitcoins back
• The real identities of myself and any co-founders are known - no anonymous people who might disappear.
• The roadmap of features are laid out in advance, but not set in stone. For instance, if technical hurdles come up, the plan might change, but the goal will always be to maximize the value of the new protocol layer you funded.
• If the new protocol layer is successful, early investors become fabulously wealthy, and the value of bitcoins rises too.

For finding a co-founder, the biggest requirement is to find someone who understands what I am trying to do, and agrees with the general approach (although not necessarily agreeing on every last detail). I need someone with strong technical skills and decent inter-personal skills. If they currently hold bitcoins, they should be an investor in the crowd-funding, but they would receive a professional salary and significant equity in the organization created by the crowd-funding, in addition to the ownership stake they bought in the new protocol layer.

I myself would invest the vast majority of my bitcoins in the crowd-funding (and would thereby own a lot of the "coins" of the new protocol layer), but unfortunately that is not enough to get the kind of money we would need to pay a couple professional salaries for at least a couple years until the enterprise becomes self-sustaining. (The organization gets a small percentage of the new protocol which slowly vests over time - the organization becomes self-sustaining by selling their stake in the protocol as needed once it vests).

Please vote in my poll, and post in this thread about why YOU should be my co-founder. You can learn more about me and my bitcoin pedigree here: http://www.linkedin.com/in/jrwillett (Also, please connect with me on LinkedIn!)

Sister post on reddit is here: http://www.reddit.com/r/Bitcoin/comments/1fqgn0/will_you_be_my_cofounder_professional_salary/

[1714806480]

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[dacoinminster]

[Reserved]

[dacoinminster]

Tons of comments on reddit, but so far none here. Strange . . .

Usually there are at least a few trolls who come kick up some dirt on my threads. Did all the trolls get banned?

[Luke-Jr]

I think you should reconsider the design a bit.
While it could certainly be argued that most* of the transactions you're talking about are financial, and thus within the "social contract" of what is acceptable in the blockchain, there is no need for this and it doesn't make sense to bloat the blockchain when it is unnecessary.
A better implementation of this would do its main work in one or more merged mined blockchains, or block-data (not all purposes need a chain).
While past merged-mining altcoins (yes, you are creating altcoins here, even if they are embedded in the Bitcoin blockchain!) function independently from Bitcoin, there is no reason yours couldn't be tied more closely to it, and function just as cooperatively as you propose - or even moreso: you could implement the p2p exchange of bitcoins directly, without any need to convert to "mastercoins" at all, if you want to.
Using a merged-mining system could possibly also, if planned out in advance, allow interoperability with multiple currently-unconnected cryptocurrencies (eg, both Bitcoin and Freicoin).
* The example of "hereby take your bet" is clearly informational and abuse of the Bitcoin blockchain, in addition to being completely unnecessary.

In the specific case of the distributed exchange, I would suggest leaving out the "intention to buy" step - it doesn't really do anything useful that I can see.
Instead, just have potential buyers broadcast a purchase that includes the transfer of funds to the seller.
This can be an atomic action that confirms (or doesn't-get-confirmed) both transfers at once.

I'm not sure I follow your GoldCoins/GoldShares example.
It doesn't make sense to claim a user currency tracks the value of gold unless it actually is backed by gold, by some central authority.
If you have a central authority, there is zero value to tracking ownership in a blockchain: the authority should just sign new ownership records every day/week/howeverlong.
You also state that "Owning GoldShares is equivalent to betting that demand for GoldCoins will rise. Owning GoldCoins is equivalent to owning ounces of gold (betting that the value of gold will rise).". Considering that demand rising also means the value would rise, what is the difference between the two supposed to be?

Finally, your whitepaper only covers a very high-level view of these ideas, and actually implementing everything mentioned would probably take a lot of time, not just coding, but also thinking through the design requirements and how it can be translated into a lower-level protocol.
I think a lot of it could probably be prototyped much easier by combining testnet use with some temporary centralized service.
This would allow you to get some practical testing done, to see what works and what doesn't, and perhaps more importantly, what other things might be desirable to have that nobody has thought of yet.

[Croesus]

As those who have read my work on cvTokens know, I believe it is a mistake to build an entirely separate layer on top of Bitcoin, and then to build precious metal or fiat-equivalent tokens on top of that.  Backing other tokens directly in bitcoins is much easier to implement and offers access to a much larger pool of liquidity (the critical element in producing stability).  In addition, if you are committed to having trusted sources publish valuation anchors, then implementation becomes very simple indeed.

Nonetheless, it is true that the concept of provably collateralised tokens backed in a purely digital instrument is worthy of much greater attention than it has received.  So I applaud you for your efforts to catalyse some movement in this area even though I think your particular model is insufficiently developed.

Since you are eager to move this idea forward, allow me to suggest a simpler first step.  Why not launch a kickstarter for the creation of a trusted "oracle" publishing the USD price to the blockchain, with a method that requires consensus among several parties, and some simple code for helping them to achieve it?  Such a thing would surely be useful, and if it proves trustworthy and reliable you have proven the viability of a key component in your larger project.  It is also simple, deliverable, and requires no solutions in cases where only problems have been described.  In the worst case it would lend you credibility if you decide to proceed with this larger crowd-funding plan.  I wish you luck!

[dacoinminster]

What? Only thoughtful, intelligent replies? What forum am I on?

Regarding merged-mining, that would make my ideas just another alt-coin, which I definitely want to avoid, and I would lose the ability to crowd-fund. Still, I expect that a message-based protocol built on top of bitcoin would be considered abuse of the block-chain by many people. Unfortunately (or fortunately?), there is really no way to prevent people from "abusing" the block-chain with experiments like this. As long as a transaction is valid from a bitcoin miner's perspective, it will get included, regardless of what other information it carries.

Croesus, if your method had a way to crowd-fund and invest in its success, I would be all over it. You're one of the few who really understands where we need to go.

It sounds a more detailed technical spec is the next big job (defining the actual message formats).

If you are a potential co-founder, or just want to make an intelligent comment like the ones above, please post!

[maaku]

dacoinminster, the project you are seeking to start is already underway. I'm not sure if you remember, but we met at the conference after your panel. As I said then, we the Freicoin developers have been working on a proposal with similar goals for some time. It now has a name: “Freimarkets: assets, credit, and exchange”.

Explained in bitcoin terms, it is basically colored coins on steroids, plus decentralized, distributed p2p markets. Together with the “smart contracts” possible though the bitcoin scripting language, these provide all the primitives necessary for the issuance and management of just about any kind of financial instrument. We are currently working on a white paper describing in detail the modifications to bitcoin protocol, but here is the high-level executive summary:

Therein we propose a new transaction format, nVersion=3 transactions (Freicoin's interest/demurrage modifications having defined nVersion=2), which enable one level of independently verified sub-transactions, as well as relaxation of the rules regarding coin generation via coinbase transactions for the purpose of supporting user-defined assets on the block-chain. Combined with suitable extensions to the peer-to-peer, JSON-RPC, and user interfaces, these two protocol changes complete bitcoin’s repertoire of low-level constructs, allowing the emulation of a wide variety of financial instruments.

Together this enables the following sorts of applications:

* Issuing new assets by means of asset definition transactions (coinbase transactions other than the usual first transaction of a block), then transferring ownership of these “colored coins” through normal Freicoin transactions. Such assets are allowed to specify their own interest/demurrage rate, reference an external legal contract (typically governing their redemption) and may be destroyed when no longer needed by a special class of non-spendable, prunable output script.

* Atomic exchange of assets of differing types through inclusion of inputs and outputs for both in a single transaction.

* Signing orders (partial-transactions) that are binding but not completed until they get into the chain as part of a balanced transaction, and have attached expiration dates or can be explicitly cancelled by double-spending the signed inputs.

* Executing an arbitrary number of these orders atomically by creating a complete valid transaction where the orders are included as sub-transactions, thereby executing an atomic trade/exchange without requiring both parties to be online or in direct contact with each other.

* Composing orders from separate markets into an atomic trade with intermediate assets, enabling payment based on transitive trust relationships

In other words, any of the multitude of things Open-Transactions or Ripplepay were designed to do, could now be done on the block chain. Further, there is no reason why this could not be implemented on Bitcoin itself. However, it is such a drastic change in scope from what bitcoin has traditionally been that getting the required consensus may not be worthwhile or even doable. The smaller, more focused Freicoin community has already rallied behind this as the next major technical development, and it will be deployed to that network within as soon as development and testing is finished.

As you may know, I'm currently working on UTXO indices for bitcoin, and you would be excused for wondering how these two proposals could be related. The thing is, we anticipate user-issued assets and distributed exchange to grow demand for blockchain transactions considerably. Actually considerably is an understatement: I would not be surprised if it exceeds regular bitcoin traffic by a factor of 100x or more. Therefore we are working to get UTXO indices implemented first so that the core bitcoin layer can scale, then implement “Freimarkets” on top of Freicoin. Using existing scripts, users would be able to make atomic trades across chains (bitcoins <--> freicoins), and then use Freimarkets to issue their own transactions or participate in the p2p exchange.

I obviously feel Freicoin will succeed as a currency, on its own merits. However playing devil's advocate, even if you are not bullish on FRC it's still true that it's unique system of demurrage makes it an ideal fee currency that doesn't threaten bitcoin's utility as store-of-value. And the scale of hard-fork changes required for Freimarkets makes it a non-starter on bitcoin itself for pragmatic reasons.

Your idea about exchanging NewCoins for the bitcoin crowdfund investment is interesting, but unfortunately mismatched to the current situation on the ground. If you want to invest in this new idea, invest in freicoins - they will soon be the fee currency for the proposal. If you have bitcoins to contribute to the effort then contact me offline. My time is only paid for for the first couple of months, but this is expected to be a year-long endeveour. If additional funds were available, I'd be able to bring on extra programmers to make it happen sooner. (I already have one in mind, but if anyone technical is reading this and interested, contact me offline.)

[Luke-Jr]

Regarding merged-mining, that would make my ideas just another alt-coin, which I definitely want to avoid, and I would lose the ability to crowd-fund.

You're only "just another alt-coin" if you don't do anything different.
Why do you assume you will lose the ability to crowd-fund?

Still, I expect that a message-based protocol built on top of bitcoin would be considered abuse of the block-chain by many people. Unfortunately (or fortunately?), there is really no way to prevent people from "abusing" the block-chain with experiments like this. As long as a transaction is valid from a bitcoin miner's perspective, it will get included, regardless of what other information it carries.

Not quite. Work has been underway to prevent storing anything other than hashes in the blockchain.
When reading your paper, I was giving you the benefit of the doubt, and assuming you didn't mean to literally store the (other) information in the blockchain, only the minimal transactions to make it function.
Really, there is no value in storing information in the blockchain (other than abusing others' required storage of it).

[peonminer]

Sub'd

I voted 10,000+

I don't have them though. :/

Keep refining the idea... would take many sleepless nights, but would provide an entire new outlook @ BTC.

[dacoinminster]

dacoinminster, the project you are seeking to start is already underway. I'm not sure if you remember, but we met at the conference after your panel. As I said then, we the Freicoin developers have been working on a proposal with similar goals for some time. It now has a name: “Freimarkets: assets, credit, and exchange”.

Explained in bitcoin terms, it is basically colored coins on steroids, plus decentralized, distributed p2p markets. Together with the “smart contracts” possible though the bitcoin scripting language, these provide all the primitives necessary for the issuance and management of just about any kind of financial instrument. We are currently working on a white paper describing in detail the modifications to bitcoin protocol, but here is the high-level executive summary:

Therein we propose a new transaction format, nVersion=3 transactions (Freicoin's interest/demurrage modifications having defined nVersion=2), which enable one level of independently verified sub-transactions, as well as relaxation of the rules regarding coin generation via coinbase transactions for the purpose of supporting user-defined assets on the block-chain. Combined with suitable extensions to the peer-to-peer, JSON-RPC, and user interfaces, these two protocol changes complete bitcoin’s repertoire of low-level constructs, allowing the emulation of a wide variety of financial instruments.

Together this enables the following sorts of applications:

* Issuing new assets by means of asset definition transactions (coinbase transactions other than the usual first transaction of a block), then transferring ownership of these “colored coins” through normal Freicoin transactions. Such assets are allowed to specify their own interest/demurrage rate, reference an external legal contract (typically governing their redemption) and may be destroyed when no longer needed by a special class of non-spendable, prunable output script.

* Atomic exchange of assets of differing types through inclusion of inputs and outputs for both in a single transaction.

* Signing orders (partial-transactions) that are binding but not completed until they get into the chain as part of a balanced transaction, and have attached expiration dates or can be explicitly cancelled by double-spending the signed inputs.

* Executing an arbitrary number of these orders atomically by creating a complete valid transaction where the orders are included as sub-transactions, thereby executing an atomic trade/exchange without requiring both parties to be online or in direct contact with each other.

* Composing orders from separate markets into an atomic trade with intermediate assets, enabling payment based on transitive trust relationships

In other words, any of the multitude of things Open-Transactions or Ripplepay were designed to do, could now be done on the block chain. Further, there is no reason why this could not be implemented on Bitcoin itself. However, it is such a drastic change in scope from what bitcoin has traditionally been that getting the required consensus may not be worthwhile or even doable. The smaller, more focused Freicoin community has already rallied behind this as the next major technical development, and it will be deployed to that network within as soon as development and testing is finished.

As you may know, I'm currently working on UTXO indices for bitcoin, and you would be excused for wondering how these two proposals could be related. The thing is, we anticipate user-issued assets and distributed exchange to grow demand for blockchain transactions considerably. Actually considerably is an understatement: I would not be surprised if it exceeds regular bitcoin traffic by a factor of 100x or more. Therefore we are working to get UTXO indices implemented first so that the core bitcoin layer can scale, then implement “Freimarkets” on top of Freicoin. Using existing scripts, users would be able to make atomic trades across chains (bitcoins <--> freicoins), and then use Freimarkets to issue their own transactions or participate in the p2p exchange.

I obviously feel Freicoin will succeed as a currency, on its own merits. However playing devil's advocate, even if you are not bullish on FRC it's still true that it's unique system of demurrage makes it an ideal fee currency that doesn't threaten bitcoin's utility as store-of-value. And the scale of hard-fork changes required for Freimarkets makes it a non-starter on bitcoin itself for pragmatic reasons.

Your idea about exchanging NewCoins for the bitcoin crowdfund investment is interesting, but unfortunately mismatched to the current situation on the ground. If you want to invest in this new idea, invest in freicoins - they will soon be the fee currency for the proposal. If you have bitcoins to contribute to the effort then contact me offline. My time is only paid for for the first couple of months, but this is expected to be a year-long endeveour. If additional funds were available, I'd be able to bring on extra programmers to make it happen sooner. (I already have one in mind, but if anyone technical is reading this and interested, contact me offline.)

I do remember you! And I'm following your efforts on Freicoin with great interest. I'm not sold on using Freicoin as the base, but something like this will succeed, and it may be you simply because you got there first.

[Loozik]

I myself would invest the vast majority of my bitcoins in the crowd-funding (and would thereby own a lot of the "coins" of the new protocol layer), but unfortunately that is not enough to get the kind of money we would need to pay a couple professional salaries for at least a couple years until the enterprise becomes self-sustaining.

1. How much BTC, USD or other currency is needed for the project to succeed and over what period of time? Do you have a budget (in Excel)?

2. How much would you invest?

3. 1-2=equity to be paid by investor(s) - this is important to know how much is needed so that a potential investor can easily calculate if he or she fits the project and what type of control (managerial, operational) he or she can exercise and to what extend (over funds invested and the project itself).

[No 1]

integrate porn and your coin will succeed

[lophie]

Now I remembered, I read it ages ago, Indeed another alt-coin, very disappointed. I am actually working on something different as I oppose the creation of  alt chains without a very good reason. I am very sorry I disagree. Maybe a second read would change my mind. But keep up the good work, I am sure satoshi didn't create Bitcoin in one go.

[freedomno1]

This is  interesting and my level of reply will probably be not as well written as the contemporaries above me,  I do feel that it is notable. I was reading through your links and they are quite versed, I disagree and do not see the future as bleak with the bitcoin protocol just being a part of the new adjustment.

Grandma will be safe and can get cheaper medication off the Silk Road. But your world-point is interesting I hope that at some point there will be an intersection between reality and insanity that will force complacency and sensibility, instead of a total social collapse based on a philosophical viewpoint of morality, such as the categorical imperative else we all are in a Margaret Atwood dystopian universe such as Oryx and Crake that will be a stepping stone in the setting of the stage for someone to save the worlds intelligent life from an inevitably dying society sometime down the road.

Back to topic

This is a possible development that could be part of the future of bitcoin and is worth looking at
A web of interconnected exchanges based on trust
Central Exchange Servers and multiple markets connecting worldwide
24/H Over the Counter Trading
Inserting colored coins into the protocol to create exchanges and having trusted users running them with the ability to trade 24/7 worldwide and building it into bitcoin would be an amazing feat. Even more impressive if you consider the creation of self-stablizing coins built on top of bitcoin.
Instant connection to all world markets
Trading person to person through a trustnet
And other features

To me Bitcoin is a wave in the way we view finance and how we transfer money worldwide.
Decentralizing the aspect and saving money held through financial institutions and removing the middlemen while enhancing security and trade capabilities is another level to finance.
A new way to view currency this development would also serve as a new perspective to view how we interact with the blockchain

I believe that a protocol or similar variant will succeed and improve on the bitcoin infrastructure the flexibility of inputs and outputs and the robustness to adapt to a high transaction volume seem like quite the challenge to undertake perhaps such an interface needs a stage by stage implementation perhaps a coordination with Makku after his implementation is complete regarding the implementation of the Ultimate blockchain compression & trust-free lite nodes in order to acquire a group of similar minded people and the possible coordination with Freicoin to make the most solid and well developed structure

I wish you good fortune in your mission and believe that in one form or another it will succeed

[wonkytonky]

very interestig stuff man..

this is inovation.. bitcoin needs..

layers on top of bitcoin ..

going to read pdf soon.. 

regards

[dacoinminster]

You guys are all awesome, even those who disagree with me.

I've got some cool people who say they are interested in being a co-founder (but haven't made any decisions yet, so feel free to get in touch). Unfortunately, the money side of things is not rosy enough yet. At this point it looks like I would be the primary source of funds for the venture, and there would not be enough funds to convince my wife that our little family would be financially secure for the two or three years it would take to get something like this established.

My plan is to revise the paper so that it is a complete technical spec. This may take a long time, as I am determined that my three small children and my day job will not be in any way neglected. For reference, the last draft took me six months under similar constraints.

I really hope somebody else will beat me to the punch. I'd much rather be an investor than a founder.

[maaku]

A few people have asked how much coin it would take. For the Freimarkets proposal I can give hard numbers: for me going alone, it'll take $54,000 (or equivalent in bitcoin, but expenses are in dollars & euros so I will quote fiat), and 12 months of development. This includes development of the unspent-TxOut indices that I am currently working on, which I see as a necessary technical prerequisite, but work could be done on both in parallel. For about 50% more - $84,000 - I could bring on board a second full-time developer and deliver 2-3 months earlier and with better quality code and test coverage. Beyond that coordination cost of adding new people probably outweighs any gains, unless you are interested in funding user interface development or other ancillary features.

And by the way, I've already quit my day job so the clock has started. So long as we can continue to find funding, expect delivery of UTXO indices in 6mo, and Freimarkets 6mo thereafter. Assuming, of course, that the community continues to be generous with providing bitcoin to keep me/us going.

dacoinminster, this is your thread, so it'll be my last post about Freimarkets. But there's your plan B We would welcome you as an investor.