MasterCoin: New Protocol Layer Starting From “The Exodus Address”

[ripper234]

Sweet! I love how it only requires actually permission to the Exodus!

How about setting up a "mastercoin-foundation" github organization, that will hold all the different repos? (mastercoin, greesemonkey, website, etc.)

I went ahead and forked Armory in anticipation of tearing it all apart:
https://github.com/dacoinminster/MasterCoin-Adviser

The greasemonkey script probably won't change much. I have no idea what I want to do for a website. Probably just contract it out at some point, since I don't really enjoy working on static pages.

And still ... how about developing these things not on your dacoinminster account, but as an organization account?
(It's really quite seamless and easy on github, it doesn't add any complications)

Cool.

I don't think any bitcoin client implements multi-sig yet, although armory is getting close. Perhaps the veto power should be informal at first, and once a way to do multi-sig becomes available, we can codify it using m-of-n multisig.

Does that sound good to you guys?

Well, ad this stage I certainly wouldn't advise changing the whitepaper to make the official exodus address a multisig address.

However, I would make it a priority, pending on a successful, tested implementation of multisig in a major client.
Until we have a clear, secure way to implement multisig without a chance of funds being lost, I'm ok with you guarding the funds, as long as it's clear the Foundation has to approve any significant expense (we can debate what 'significant' means ... as the project director / <insert title here>, you'll have a discretionary budget which you can spend without needing such approval).

Last I heard from TheZerg he said the new BitShares system is much harder to find fault with.    That said, I am still willing to pay a 1 BTC bounty to anyone who can find a fault with the BitShares protocol that will result in me making a change and 10 BTC to anyone who can convince me to abandon BitShares all together.   Note: Charles & I are the sole judge of whether or not to award the 10 BTC bounty, but we have a history of being fair/honest in our judgements.  If you can convince us of fundamental problems you will save us money and we would gladly pay 10 BTC... if you cannot convince us then we will be rolling out BitShares as the proof of your failure to convince us.  

MasterCoin seems unwilling to risk 10 BTC on the potential that the flaws in his system might be discovered.  If he is so confident his approach will work then it is a 0 risk proposition to offer a 10 BTC bounty.   At the very least his investors will know that he has put up enough money to insure his ideas are properly vetted.

I don't mind posting such a bounty if my oversight board (currently Ripper and vokain) thinks it would be a good use of funds from the Exodus Address. However, the posts so far don't even come close to convincing me that the idea can't work at all. The closest they have come is pointing out the trade-offs involved with this kind of system. There are clearly scenarios where excrow funds break down, but to claim the idea couldn't work for any amount of time is over-reaching.

Also, welcome back to the thread

I suggest opening a separate thread for this discussion (perhaps for every major financial decision). We will soon need a dedicated forum (place a bounty for that?)

This might be a good idea, but the bounty's conditions must be very well defined. I think it's best to discuss this on a separate thread.



Wow, there seems to be a lot of discussions that I missed. No time to read it all.
Anything important?
Kudos to dacoinminster for his patience in replying to this thread, it's really quite tiring

[d'aniel]

I'm going offline until tomorrow, but you guys have my sincere thanks.

Ripper and vokain, I didn't officially set up a bounty, but I would like tip these two guys (maybe 3 BTC each) once I start tapping Exodus Address funds September 1st. Do you approve?

bytemaster needs a tip for his insane persistence, and d'aniel for actually describing the attack that bytemaster felt must exist.

Thanks!  PM me for an address if you like.

[vokain]

I'm going offline until tomorrow, but you guys have my sincere thanks.

Ripper and vokain, I didn't officially set up a bounty, but I would like tip these two guys (maybe 3 BTC each) once I start tapping Exodus Address funds September 1st. Do you approve?

bytemaster needs a tip for his insane persistence, and d'aniel for actually describing the attack that bytemaster felt must exist.

Yes!

However, I would make it a priority, pending on a successful, tested implementation of multisig in a major client.
Until we have a clear, secure way to implement multisig without a chance of funds being lost, I'm ok with you guarding the funds, as long as it's clear the Foundation has to approve any significant expense (we can debate what 'significant' means ... as the project director / <insert title here>, you'll have a discretionary budget which you can spend without needing such approval).

I don't know if there should be a discretionary portion of a budget... personally I and everyone here I think would like to know what the fund was entirely used for transparently. I'd typically be very lax in approving such discretionary spending, but I'd like to know what it was for is all. Separate discussion platform for this would be nice.

I didn't think MasterCoin supported short sales...

It doesn't matter if it's built into the system.  I can still borrow the coins outside the system from anybody willing to lend them to me, and then immediately sell them.  That's all a short sale is.

Right, but no one shorts BTC because no one lends BTC (at least not in quantity).

bitfinex has shorting available. around 6000 BTC available to borrow, as of today, starting at 0.04%/day to 0.2% per day, depending on how much is borrowed. The only thing you have to trust is the system, no need to trust the borrower or lender. You can only sell on that exchange or route the sell through Bitstamp however. The mechanics in how they accomplished lending is pretty neat and simple, and worth checking out.

[vokain]

Dacoinminister you might want to read this:

http://www.reuters.com/article/2013/08/06/us-court-sec-bitcoin-idUSBRE97517G20130806

The SEC seems to really dislike people offering unregistered and unlicensed investment vehicles in the US, regardless of whether it's bought in BTC or USD.

Here's a particularly relevant quote:

Trendon Shavers of Bitcoin Savings & Trust had challenged the Securities and Exchange Commission's case against him, saying the regulator had no jurisdiction to sue him because the Bitcoin investments he offered are not securities or subject to any U.S. regulation.

But U.S. Magistrate Judge Amos L. Mazzant in the Eastern District of Texas ruled on Tuesday that his Bitcoin investments "meet the definition of investment contract, and as such, are securities."

That doesn't mean at all that bitcoins are an investment contract (nor is Willett saying that Mastercoin is). Pirateat40's Bitcoin Savings & Trust, et. al. schemes WERE! By marketing his Trust as an investment where you could make 7% a week, that made it meet the definition of "investment contract" and thus, under the SEC's jurisdiction. I still consider buying Mastercoins now as on the same lines  as trading BTC for BTC or LTC etc

https://bitcointalk.org/index.php?topic=268464.msg2879997#msg2879997

Ok judge, so which is it, are bitcoins money or securities?

Does thaat distinction mean anything or matter?

Can bitcoin be both?

The judge never said Bitcoins are securities/investments.  He said what Pirate offered was a security/investment.  The fact that they were denominated in Bitcoins didn't automatically make them not a security/investment (a highly dubious theory held by many for a long time).

As I understood it, bitcoins are money and Pirate's promise to repay principal and interest is a security.

[murraypaul]

It appears that my method of funding this project is still quite contentious. I want to address a couple of those issues further:

• Some of you seem to think that  my own money is not at risk if this project fails. That is not true. If this project fails (probably because somebody else does something similar, but does it better and/or faster), I would return any remaining funds to investors. I would get a partial refund just like everyone else.

But there is no way of guaranteeing that, as you personally control all the funds.

• I modeled this fundraiser like a kick-starter, but investors are motivated similarly to angel investors (venture capitalists investing in early stage companies). The risk they are taking is very high, but the potential reward is very high as well.

With Kickstarter, a project has a set funding target, which it must meet to proceed.
If a project fails to reach its targets, all funds are returned to the investors.
The funds are escrowed by a trusted third party.
None of things is true here
[/list]

[vokain]

It appears that my method of funding this project is still quite contentious. I want to address a couple of those issues further:

• Some of you seem to think that  my own money is not at risk if this project fails. That is not true. If this project fails (probably because somebody else does something similar, but does it better and/or faster), I would return any remaining funds to investors. I would get a partial refund just like everyone else.

But there is no way of guaranteeing that, as you personally control all the funds.

• I modeled this fundraiser like a kick-starter, but investors are motivated similarly to angel investors (venture capitalists investing in early stage companies). The risk they are taking is very high, but the potential reward is very high as well.

With Kickstarter, a project has a set funding target, which it must meet to proceed.
If a project fails to reach its targets, all funds are returned to the investors.
The funds are escrowed by a trusted third party.
None of things is true here
[/list]

Keep reading.....

tl;dr: funds will likely be in either an m-of-n wallet so that he needs 2/3 keys to spend the coins or maybe a variation thereof in the case that votes will be tallied by investment size (seems to be more fair). the keys will be held by as-of-yet formalized, independent holders who have a desire to see the project through to fruition AND keeping the fund healthy. we just have to trust Willett to keep 1exodus safe until then.

https://bitcointalk.org/index.php?topic=265488.msg2878316#msg2878316

[murraypaul]

However, an unhealthy fund can eventually become healthy by continuing to buy GC low and sell GC high! If MasterCoins don't crater, a modestly unhealthy escrow fund still stands a decent chance of getting back to 100% funded

This is a logically fallacy, it has an inbuilt assumption that the currency will overall rise in value.
You have no way of knowing at any particular point in time whether the value is 'low' or 'high'.
If you buy at a certain point, and then the currency diminishes in value further, you have lost.
Do you continue to buy, because the currency is now at a new 'low'?
You keep doubling down, and without an infinite reserve, you will go bust.

[murraypaul]

tl;dr: funds will likely be in either an m-of-n wallet so that he needs 2/3 keys to spend the coins or maybe a variation thereof in the case that votes will be tallied by investment size (seems to be more fair). the keys will be held by as-of-yet formalized, independent holders who have a desire to see the project through to fruition AND keeping the fund healthy. we just have to trust Willett to keep 1exodus safe until then.

Like I said, he personally controls all the fund.
This is a direct donation of money to a single person with no escrow or return guarantees.
If that changes in the future, my statement will no longer be true, but right now, it is.

[vokain]

tl;dr: funds will likely be in either an m-of-n wallet so that he needs 2/3 keys to spend the coins or maybe a variation thereof in the case that votes will be tallied by investment size (seems to be more fair). the keys will be held by as-of-yet formalized, independent holders who have a desire to see the project through to fruition AND keeping the fund healthy. we just have to trust Willett to keep 1exodus safe until then.

Like I said, he personally controls all the fund.
This is a direct donation of money to a single person with no escrow or return guarantees.
If that changes in the future, my statement will no longer be true, but right now, it is.

True.

[BitPirate]

4) As a result of 0-3, it follows that prices cannot be calculated at any time because prices are the result of value judgements and there is no means of performing mathematical operations on 'value'.   Prices do not define value, values cause prices.

+1 this is the crux of the issue, and was what I was trying to get across before.

Some people say they want a coin with a stable price, but do they, really? What they actually want is a coin that is valued such that they can rely on it's price. That's an altogether different thing.

Something has a reliably stable price over time because people trust and assign a stable value to it.

However the corollary is NOT true. I can try to sell my turds for a fixed price. That in no way makes them valuable. Furthermore, the minute any fools are lured into paying my "stable price" for them, someone else smarter and richer will be able to profit by speculating on their real value.

[bvt]

4) As a result of 0-3, it follows that prices cannot be calculated at any time because prices are the result of value judgements and there is no means of performing mathematical operations on 'value'.   Prices do not define value, values cause prices.

+1 this is the crux of the issue, and was what I was trying to get across before.

Some people say they want a coin with a stable price, but do they, really? What they actually want is a coin that is valued such that they can rely on it's price. That's an altogether different thing.

Something has a reliably stable price over time because people trust and assign a stable value to it.

However the corollary is NOT true. I can try to sell my turds for a fixed price. That in no way makes them valuable. Furthermore, the minute any fools are lured into paying my "stable price" for them, someone else smarter and richer will be able to profit by speculating on their real value.

Exactly. They don't want stability, but some might want low risk investments. Low risk =| artificial stability. I love the irony of trying to make something low risk in Bitcoin, considering Bitcoin's current nature of being through-the-roof-high-risk. Mastercoin at it's current state is not economically viable and would be doomed from the start as bytemaster and others painfully have tried to explain over ten folds of posts.

Combined with the above mentioned vital faults in the white paper, the funds being funneled directly into his "private" Bitcoin address and how the project was rushed along spawned the initial scam accusations.

[dacoinminster]

I realize that there are more issues to be addressed since I last posted, but I am now behind on my other responsibilities, and need to take a break from this thread. Also, I'll be offline tomorrow through Sunday for vacation. I will try to catch up with everything when I return on Monday.

A couple updates about the project:

• Yesterday I purchased the laptop for ~$860 which I will be using for development. After talking to my wife, we decided that we probably would have bought this laptop anyway, so probably only partial reimbursement would be appropriate from project funds. I'll discuss this more with the oversight board later.
• When I next update the spec, I plan to add a "create property" transaction and "transfer property" transaction, which could be used for car titles, house deeds, or just plain old colored coins
• Over many pages of posts, it was established that the old escrow-backed currency model I proposed does have a critical weakness when the escrow is under-funded. We discussed several potential fixes which I believe could work, but given the controversial nature of this feature I think it makes sense to implement it last!

I have promised not to touch project funds until September, so bytemaster and d'aniel, I hope you don't mind waiting until then for your reward (Ripper hasn't responded about this, but I'm assuming he won't object).

Thanks everyone!

[vokain]

don't quit pondering, there's always a way, just maybe not the way you thought it would be the past year.

[alexkravets]

Having perused the spec, three words pop into my mind:

Ripple The Cripple

 

[inbox]

When is the deadline for the 30% bonus?

I assume it's any deposits before August 7th, 2013, 06:53:54 PM

[ripper234]

When is the deadline for the 30% bonus?

I assume it's any deposits before August 7th, 2013, 06:53:54 PM

If I understand correctly, there is no deadline - the bonus is continuous.

[ripper234]

I'm going offline until tomorrow, but you guys have my sincere thanks.

Ripper and vokain, I didn't officially set up a bounty, but I would like tip these two guys (maybe 3 BTC each) once I start tapping Exodus Address funds September 1st. Do you approve?

bytemaster needs a tip for his insane persistence, and d'aniel for actually describing the attack that bytemaster felt must exist.

Too much stuff going on, I haven't seen what they're being tipped for.
I've started a new Google Group dedicated to MasterCoin.
Willet - can you:

1. Put it in the OP
2. Start a thread describing this tipping and their contribution?

[vokain]

When is the deadline for the 30% bonus?

I assume it's any deposits before August 7th, 2013, 06:53:54 PM

I think it's a math function. if there are 3.4 weeks left then you get 34% for instance

[vokain]

I'm going offline until tomorrow, but you guys have my sincere thanks.

Ripper and vokain, I didn't officially set up a bounty, but I would like tip these two guys (maybe 3 BTC each) once I start tapping Exodus Address funds September 1st. Do you approve?

bytemaster needs a tip for his insane persistence, and d'aniel for actually describing the attack that bytemaster felt must exist.

Too much stuff going on, I haven't seen what they're being tipped for.
I've started a new Google Group dedicated to MasterCoin.
Willet - can you:

1. Put it in the OP
2. Start a thread describing this tipping and their contribution?

i'd prefer if bytemaster gets 3, daniel gets like 2BTC and thezerg gets 1. just in my eyes first second and third place, but that's just me. or maybe 1.5 between zerg and dan. discuss?

[ripper234]

I'm going offline until tomorrow, but you guys have my sincere thanks.

Ripper and vokain, I didn't officially set up a bounty, but I would like tip these two guys (maybe 3 BTC each) once I start tapping Exodus Address funds September 1st. Do you approve?

bytemaster needs a tip for his insane persistence, and d'aniel for actually describing the attack that bytemaster felt must exist.

Too much stuff going on, I haven't seen what they're being tipped for.
I've started a new Google Group dedicated to MasterCoin.
Willet - can you:

1. Put it in the OP
2. Start a thread describing this tipping and their contribution?

i'd prefer if bytemaster gets 3, daniel gets like 2BTC and thezerg gets 1. just in my eyes first second and third place, but that's just me. or maybe 1.5 between zerg and dan. discuss?

Join my forum and discuss in a separate, dedicated thread?
I have no idea what's going on with the bounty.