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

[milkyman]

It has been pointed out many times that the escrow fund concept cannot protect itself against being traded out of existence.

I admit that it was discussed here extensively that escrow funds are flawed in general - but I believe that my explained case is the situation that actually will happen to MasterCoin. And I believe that it's much harder to find a valid argument against a specific example than against a general concept.

[1714706627]

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[1714706627]

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[dacoinminster]

I just got off the phone with my friends over at bitangels, and they are in agreement (and I agree) that hiring me would not be the most efficient use of project funds.

Instead, we're going to hire a gung-ho entrepreneur to take over this project and build a team to implement it.

My wife will be delighted

Also, we have decided to launch the non-profit "MasterCoin Foundation" to be in charge of project funds. I was planning on doing this eventually, but we've decided to do it right away.

I will still be involved in numerous ways, mostly guiding the people working on the technical side of the project.

I think all investors should be pleased with the direction this is taking.

If you have coding skills and think you would like one of these jobs, start polishing up your resume now. These will be startup-style jobs, with enough money to pay your bills and a heavy emphasis on future equity. We are aiming to have enough funds to run for at least two years.

[dacoinminster]

I see some other questions on this thread, specifically about the escrow fund and so on. Unfortunately I have a bunch of other stuff I have to attend to today, so I'll have to put those questions off. Others please feel free to chime in if you feel you have insight into the questions being asked. I'll try to answer some questions at some point tomorrow.

[mindtomatter]

I just got off the phone with my friends over at bitangels, and they are in agreement (and I agree) that hiring me would not be the most efficient use of project funds.

Instead, we're going to hire a gung-ho entrepreneur to take over this project and build a team to implement it.

My wife will be delighted

Also, we have decided to launch the non-profit "MasterCoin Foundation" to be in charge of project funds. I was planning on doing this eventually, but we've decided to do it right away.

I will still be involved in numerous ways, mostly guiding the people working on the technical side of the project.

I think all investors should be pleased with the direction this is taking.

If you have coding skills and think you would like one of these jobs, start polishing up your resume now. These will be startup-style jobs, with enough money to pay your bills and a heavy emphasis on future equity. We are aiming to have enough funds to run for at least two years.

I totally agree with this course of action, this project would hugely benefit form a dedicated team.

[dacoinminster]

Here is what the Executive Director of bitangels just posted about this:

---------- Forwarded message ----------
From: David Johnston
Date: Thu, Aug 29, 2013 at 10:01 AM
Subject: Re: MasterCoin - What will it take for J.R. to quit his job?
To: bit-angels@googlegroups.com


Thanks everyone for the input on how to build the Mastercoin protocol project cash efficiently.

I think we are all in agreement (J.R. most of all) that he isn't the right person to take on the day to day development of the Mastercoin protocol.
I've talked with J.R. this morning and we believe the best structure for the Mastercoin effort is a non-profit Foundation. J.R. will offer to serve as one of the Board Members of the Foundation and offer technical advice on the effort.

So that offers an opportunity for a veteran entrepreneur to step up into the role of "Executive Director" of the Mastercoin Foundation to lead the day to day efforts. The foundation will be responsible for distributing to developers all the funds collected as part of the initial fund raise and the 10% pool of "Reward Mastercoins" to developers and those contributing to the success of the mastercoin protocol.

I'm excited because I believe this is at the core of the BitAngels mission. When we began we collectively said that our goal is to "Accelerate the development of new parts of the Bitcoin eco-system" and do that by "Empowering the technical folks with partners who are veteran entrepreneurs and can build scaleable and compelling businesses". The Mastercoin project is the perfect fulfillment of this ideal. An important technical development that needs to go from prototype to scaled reality, the money is already raised and its up to us to add the social capital in the form of our entrepreneurial experience.

We have hundreds of the most experienced Bitcoin entrepreneurs in the world on this Google Group list and many more in our extended networks. I challenge the members here to reach out and help nominate the ideal entrepreneur that is at the right place to take on this task. I've just sent the following message out to my Linkedin, Twitter, and Facebook networks and I'm already getting a flood of replies.

"A software investment has recently come through BitAngels and raised $300,000. Now it needs a veteran entrepreneur to lead the effort. Anyone interested in running one of the most disruptive technology efforts in the digital payments (Bitcoin) space let me know ASAP via PM.
I challenge you to do the same and connect me with those candidates.

I'll be posting the notes from my Due Diligence report later today for everyone comments.

Best Regards,

David A. Johnston
BitAngels.co

When he posts his notes about his due diligence, I'll copy that here as well.

[dacoinminster]

As promised, the due diligence report:

---------- Forwarded message ----------
From: David Johnston
Date: Thu, Aug 29, 2013 at 11:46 AM
Subject: Re: JR Willett's MasterCoin Presentation Uploaded to Google Drive and Gust.com - Investment Deadline August 31st 2013
To: bit-angels@googlegroups.com


    Due Diligence Report on Mastercoin - Q&A Style 2013 - 08 - 29 https://drive.google.com/folderview?id=0B2R_eSvAkuXSWXNmU2dneFlLTkk&usp=sharing

    Categories of Due Diligence Questions:

    1. Functioning of the Mastercoin Protocol

    2. Value of Mastercoins

    3. Use cases of Mastercoins

    4. Structure of the Mastercoin Foundation

    5. Security of Investment Funds

    6. Technical Concerns

    7. Legal / Compliance Concerns

    1. Functioning of the Mastercoin Protocol

    How does the protocol function?

    MasterCoins function on top of the Bitcoin blockchain. Its not a alt currency in the since that it doesn't have a different blockchain. Here are the details in the links below.

    Link to technical paper: http://tinyurl.com/nqun98h

    Walk us through how Mastercoins are transferred according to the spec?

    Video from BitAngels presentation, including Transaction walk through: http://goo.gl/29AmH6

    ____________________________________

    2. Value of Mastercoins

    Is the monetization going to be done on the Mastercoin ownership level or at the level of the companies that operate Mastercoin businesses?

    Monetization is done at both levels, but to be clear the ownership of Mastercoins will be valuable for the same reasons that Bitcoin ownership is valuable, that is scarcity + utility.

    Given this information will the Mastercoins have a value or are they the simple transfer mechanism that is infinitely divisible?

    While Mastercoin is divisible in the same way in which Bitcoins are and to the same 8 decimal point level. The reason it has a value is because users must acquire Mastercoins in order to transfer value with them. Example: If BitAngels were to create its own currency for investors to use in their investments, you would need to purchase enough Mastercoins to transfer the value of that BitAngels currency. Specifically lets say you wanted to purchase $25K in BitAngels currency. You would need to purchase $25K worth of Mastercoins to make the switch from BTC to Mastercoins to BitAngels coins. Lets say there are 500,000 Mastercoins created as part of the protocol, at a fund raising level of 500,000 USD. That roughly values 1 Mastercoin at $1 USD today. Well then you would be putting 25,000 Mastercoins worth of demand into the market. If not enough Mastercoin owners were willing to sell at the price of $1 USD each then you would have to pay more per Mastercoin and thus increasing the value of Mastercoins. So with the need to transfer value comes the demand and supply dynamics of the market applied to the value of Mastercoins.         

    Can you guarantee that no coins will be issued outside of those in the spec?

    Yes. There will not be any more Mastercoins issued after August 31st. That is how the protocol is designed. Additional coins would be a function of a "hard fork" and would not qualify under the Mastercoin Spec.

    ____________________________________

    3. Use cases of Mastercoins

    What are the use cases of Mastercoins?

    Peer to peer exchange, issuing of digital currencies, issue savings wallet and those listed below.

    1. Transferring MasterCoins (demonstrated)

    2. Marking an Address as “Savings”

    3. Marking a Savings Address as "Compromised"

    4. Selling MasterCoins for Bitcoins

    5. Selling MasterCoins for Other MasterCoin-Derived Currencies

    6. Changing an Offer

    7. Purchasing a Currency Offered For Sale

    8. Registering a Data Stream

    9. Offering a Bet

    10. Accepting a Bet

    11. User Currencies

    12. Stability Concept

    13. New Currency Creation

    14. Unhealthy Escrow Funds

    15. Maintaining Escrow Fund Health

    The most interesting use cases to me are #4 and #5.

    # 4 lets us have a distributed peer to peer exchange of any digital currency over the existing bitcoin block chain.

    # 5 a distributed peer to peer exchange of currencies and the like which are issued on the existing bitcoin block chain.

    ____________________________________

    4. Structure of the Mastercoin Foundation

    Are you open to structuring this as a non-profit foundation?

    Yes, that has been my intention. Lets model it on the World Wide Web Consortium / Bitcoin Foundation Style

    Proposed name: Mastercoin Foundation.

    ____________________________________

    5. Security of Investment Funds

    How is the exodus address kept safe?

    It is keep offline (therefore un-hackable) in a secure non-disclosed location.

    Does control of the exodus address have any effect on the use of Mastercoins?

    No, it simply stores the funds for development of the protocol.

    ____________________________________

    6. Technical Concerns

    Doesn't this both bloat the blockchain and create "junk transactions" in the blockchain?

    Yes, this will increase the number of transactions in the block chain but since they are creating value and transferring value this is the core function of Bitcoin. As for the "junk" transactions these are a minority of the transactions and directly support the sending of useful transactions and thus add to the value of the Bitcoin protocol.

    I'm open to improvements that will solve these bloat and junk problems in future iterations, but keeping the functions simple at first is both a good proof of concept and makes the development progress much more quickly.

    Are there not cheaper and more elegant ways to commit information into the block chain?

    Yes, there are and I'm open to exploring those in future updates to the Spec, but the initial goal is to keep the protocol as simple as possible and base it on the most elementary of existing core Bitcoin functions. By doing this we remove risk of protocol changes and support changes for the more advanced "script" features of the Bitcoin protocol.

    What about enforcement of the more advanced features like escrows, some are skeptical these will work well in the market.

    First I want to say that the easiest features will be implemented first. The features like the escrow will be implemented last. And yes absolutely those more advanced features like escrow some will be widely adopted and others won't be as compelling, and that is for the market to decide.

    ____________________________________

    7. Legal / Compliance Concerns

    Will you be getting a money transmitter license or going for other registrations with FinCen?

    No, in the same way the Bitcoin Foundation is not a money transmitter, neither will the Mastercoin Foundation be involved in any transmission operations. The Foundation will NOT operate any for profit businesses or serve users in any of the use cases described. The Foundation will promote the development of the core Mastercoin Specification and core reference client implementation. The Foundation will encourage and promote compliance and regulatory knowledge in respect to Mastercoin in the respective jurisdictions of those users implementing it for their particular use case.

    ____________________________________

Anyone wishing to comment on this due diligence report is welcome too add constructive thoughts below.
Best Regards,
David A. Johnston
BitAngels.co

[klee]

Win win scenario, great news dacoinminster!

[Tachikoma]

I might be crazy; but why do we need a foundation; or paid developers to begin with?

If the open source community proved anything it's that financial incentive is not needed to build great software. Satoshi build the first reference client without getting paid a dime. Why do you feel Mastercoin needs this much structure behind it?

[yantis]

100 BTC invested in this.

https://blockchain.info/tx/4ff007ea31dc6e1258188532e3c6fa7f7f411f2511154b780f9aeb69bca8b4be

David Johnston and Bitangels convinced me it is worth a shot.

[Wagner2014]

So I sent .42 btc... Now what?

same here.  was there supposed to be something coming back?

Nope - you have created MasterCoins via your transaction, and you own them until you publish a message sending them to somebody else.

Can someone please explain how this works further or point me to an explanation of how this works? The MasterCoins were created when I sent some BTCs to the ExodusAddress. Then my claim to the MSCs is in the transaction record? I own them until I publish a message sending them somewhere? I guess I can send them to myself at another address? How do you do this? What indicates you have them? I will consider investing a bit more but only if I can understand this better.

[hmmmstrange]

So I sent .42 btc... Now what?

same here.  was there supposed to be something coming back?

Nope - you have created MasterCoins via your transaction, and you own them until you publish a message sending them to somebody else.

Can someone please explain how this works further or point me to an explanation of how this works? The MasterCoins were created when I sent some BTCs to the ExodusAddress. Then my claim to the MSCs is in the transaction record? I own them until I publish a message sending them somewhere? I guess I can send them to myself at another address? How do you do this? What indicates you have them? I will consider investing a bit more but only if I can understand this better.

The transaction of you sending coins to the exodus is everyone's proof you own the mastercoins. Hence the bitcoin blockchain contains the transaction record. You own them until you publish a message on the blockchain by means of sending specific transactions to 3 different bitcoin addresses, of which 2 are real and one is a fake of which contains information about the transferring of the mastercoins. At this moment transactions have to be built manually but there will be software soon that will streamline this for you.

Eventually you will have a mastercoin client which shows you your coins and you'll be able to send them freely to any bitcoin address. Along with many other things you can do with them like buy mastercoin based "coins" that represent the value of gold or USD or bottlecaps.

You may want to watch the presentation JR did for bitangels. It explains transferring mastercoins.
https://drive.google.com/folderview?id=0B2R_eSvAkuXSWXNmU2dneFlLTkk&usp=sharing

[Wagner2014]

So I sent .42 btc... Now what?

same here.  was there supposed to be something coming back?

Nope - you have created MasterCoins via your transaction, and you own them until you publish a message sending them to somebody else.

Can someone please explain how this works further or point me to an explanation of how this works? The MasterCoins were created when I sent some BTCs to the ExodusAddress. Then my claim to the MSCs is in the transaction record? I own them until I publish a message sending them somewhere? I guess I can send them to myself at another address? How do you do this? What indicates you have them? I will consider investing a bit more but only if I can understand this better.

The transaction of you sending coins to the exodus is everyone's proof you own the mastercoins. Hence the bitcoin blockchain contains the transaction record. You own them until you publish a message on the blockchain by means of sending specific transactions to 3 different bitcoin addresses, of which 2 are real and one is a fake of which contains information about the transferring of the mastercoins. At this moment transactions have to be built manually but there will be software soon that will streamline this for you.

Eventually you will have a mastercoin client which shows you your coins and you'll be able to send them freely to any bitcoin address. Along with many other things you can do with them like buy mastercoin based "coins" that represent the value of gold or USD or bottlecaps.

You may want to watch the presentation JR did for bitangels. It explains transferring mastercoins.
https://drive.google.com/folderview?id=0B2R_eSvAkuXSWXNmU2dneFlLTkk&usp=sharing

Thank you! I just watched that and read your post which is helpful.

Another question: if there are say 300,000 to 500,000 mastercoins created depending on initial investment (that's in the ball park I think) and mastercoins are divisible to 8 decimal points, is there any concern that that number will not be optimal if the concept really takes off?

Related point: for mastercoin to be valuable it needs to capture market through widespread acceptance, but what is stopping others from copying the idea and implementing it for particular purposes.

Could this type of project damage bitcoin if many try to implement similar protocols on top of bitcoin? thanks

[ripper234]

FYI, I created a dedicated thread to discuss Mastercoin bloat.

[Nagan]

FYI, I created a dedicated thread to discuss Mastercoin bloat.

Interesting. I would really like to see some J.R. Willett's comments on this, just before my final decision on fueling this project.

[cbeast]

Another question: if there are say 300,000 to 500,000 mastercoins created depending on initial investment (that's in the ball park I think) and mastercoins are divisible to 8 decimal points, is there any concern that that number will not be optimal if the concept really takes off?

Related point: for mastercoin to be valuable it needs to capture market through widespread acceptance, but what is stopping others from copying the idea and implementing it for particular purposes.

Could this type of project damage bitcoin if many try to implement similar protocols on top of bitcoin? thanks

I have these same questions. From the BitAngels interview, it sounds like there is no protocol to prevent infinite quantitative easing. If it is successful we will see competing DinersClubCoin, AliCoin, VisaCoin, etc.

TBH, the name MasterCoin may provoke a trademark dispute. I don't see anything wrong with just calling it Exodus.

[DaaBoss]

Here's why you are most definitely on the right track of creating another coin out of one in the BlockChain itself.  IMO, this is truly brilliant because:

Leveraging something that is already created for you is not a natural engineering instinct.  But, without that concept, many ideas like creating any new coin like this are impractical.  At our company, we term it "inheritance"  where we use one structure that is dependent on other similar structures that are hundreds of times larger.  The net result is to accomplish the impossible, since that use would have required 1000 x the available resources.  (PM me and I'll give you some amazing result we've obtained in our own software designs). 

There are many needed applications for something nearly identical to Bitcoin, but which is not a BitCoin.  Yet, without a huge infrastructure to validate the transactions, any new cybercoin, even if it were identical to Bitcoin would be worthless.  Most of us have considered that almost all the miners' value has been in creating coins.  While miners' apparent value is in creating coins, their real value is in validating transactions.  By creating a new coin OUT OF a Bitcoin you instantly obtain the computing power and services of TEN Petahashes by the end of the year that more importantly, provide the transactional security service 24 x 7.

In my case, I have several separate needs.   I need to be able to create my own type of private cybercurrency for one specific purpose.  In this instance, I need to act as my own reserve currency backed by me.   In another use, I need to be able to tag all the uses of a specific stream of Bitcoin.  But for this use-case, the value backing it will be the value of the actual Bitcoin that carries the information. Two separate uses, neither of which would be practical without creating this within Bitcoin.

[dacoinminster]

Here's an update from our friend who accidentally bought MasterCoins and gave them to MtGox. I used MasterCoinAdviser to tell him what MtGox would have to do to send him the MasterCoins. Sadly, he probably won't succeed in convincing them to do this:

J.R.

I read thru the post, although still not very clear, I try to clarify (so I can correctly indicate to MtGox)(I don't think I can ask them to download and install your software ;-)):

a first transaction of 0.00028BTC should be made to my correct address (1FMxmCEAJqGQE9NhJrDn4BFbR8TWK3HK38).

a second, multiple, transaction should be made from 1Q2kjs7MjWgCtf8CfVkXHUkAeKbaMqrK9R, sending 0.00006BTC to each of 3 addresses - the exodus address, the correct address for me (1FMxmCEAJqGQE9NhJrDn4BFbR8TWK3HK38), and to a data address? that last one haven't quite worked out which is...

however, this all sums only 0.00046BTC, and still the original 1 BTC is not accounted for?? How/where did it go?

After these processes then I should have, in the exodus address, my 1BTC (minus 0.00046BTC transaction fees) correctly assigned to my correct address (1FMx, etc)?



By the way, I just transferred 0.9998BTC from my PC wallet to exodus (just to be sure I get in before the deadline!), but instead of using the 1FMx address as I was expecting, it used 18rw5npF8gTGMNwk3hZNq3sqTT74Mm8zoh, which is another generated address of my client (i use multibit for mac, not sure how to choose FROM where a transaction is sent).
Once I get a bit more clarification on the process, I will still proceed to ask MtGox to do the transaction detailed above, but I don't now expect this to happen before the deadline runs out! Will my original transfer from MtGox address be valid if they do finally do as asked and get that original 1BTC transferred to my other address? I mean with respect to the deadline??

thanks!
sorry for the delay in replying, I am presently on holoday this week with less access to internet than usual

----
:-)

Hey ----,

It sounds like you would like to use 1FMxmCEAJqGQE9NhJrDn4BFbR8TWK3HK38 to hold your MasterCoins. With that information, I can now tell you exactly what MtGox would need to do:

1) Transfer 0.00028 BTC to 1Q2kjs7MjWgCtf8CfVkXHUkAeKbaMqrK9R so it has some funds to create a new send
2) Transfer 0.00028 BTC FROM 1Q2kjs7MjWgCtf8CfVkXHUkAeKbaMqrK9R to the following three recipients in one transaction
0.00006 BTC to The Exodus Address:    1EXoDusjGwvnjZUyKkxZ4UHEf77z6A5S4P
0.00006 BTC to The recipient address: 1FMxmCEAJqGQE9NhJrDn4BFbR8TWK3HK38
0.00006 BTC to The data address:      1FDrQvgY2Xr1A6GFwdjeYQdKZpExkSrh2L
+ 0.0001 BTC transaction fee

If MtGox does this for you, your MasterCoins will be at 1FMxmCEAJqGQE9NhJrDn4BFbR8TWK3HK38

The amount of MasterCoin transferred was entered as 9999999 which is far in excess of what you bought (This just means that 100% of the MasterCoins will be transferred). This transaction not include your Test MasterCoins, which are presumably far less valuable. A similar transaction could be made for them. The only difference would be the data address would be 1FDrQvgY2Xr1ADRfCoeXemmM9mEkeupEVq

Also, there is no time limit to do these transactions. If you can ever get MtGox to do it, the transfer will work. Your 1 BTC is safely at the Exodus Address, where it will be used to fund development of this protocol.

Thanks!

[dacoinminster]

This post is to answer some questions about the escrow fund from milkyman. Most of you can just skip this post, since we've been over this ground many times in this thread:

regarding 1)

Actually, I was not referring to the technical limitations, but rather to a weakness of the system. If there is unlimited supply of coins, a rich person can exploit the system in the following way:

- He chooses a coin that has 'matured', meaning many users bought such coins, and consequently the escrow fund has a lot of money in it. Let's call them X_coins, where X is e.g. the share of a company.

- Next, he buys a HUGE amount of REAL shares of the company, resulting in a considerable rise of the value of share X.

- Then, he sells all his X_coins to the escrow fund. If the number of coins is unlimited, he makes a HUGE profit, and the escrow fund goes bankrupt.

- As the last step, he sells his real company shares.

His profit will be the initial value of the escrow fund - minus some losses due to the response of the market.

regarding 3)

If there are coins based on something like bottle caps - which you didn't defeat to be allowed - the exploit is much simpler, and you do not even need a huge capital.

A solution for this problem could be to restrict the total supply of coins to, let's say, 10% of the value of the 'real' market of this object. However, as a consequence, if demand rose continuously, the escrow fund eventually runs out of coins, leading in a rise of value of the coin clearly above the 'real' share. That wouldn't be too bad for the ones who invested, but I guess this is not the idea of the Mastercoin system?

The attack you describe would only work on a very fast-acting escrow fund. Attempts at market-manipulation like this simply result in both prices moving, slightly out of step with each other. The escrow fund only corrects very long-term differences, not short-term differences.

another concern or situation to be clarified:

I assume, we are all sane people. We invest in XZXcoins (e.g. GoldCoins) in the hope the price of gold rises and then withdraw more money at a later time. In some cases, the value will fall, in others it will rise indeed. Let us consider a case, in which the value rose to an all-time high and further assume that the value of a MasterCoin remained constant during this time or even lost value (this will happen sometimes, even assumed that the Mastercoins rise in the long term).

The following will happen: Some people will sell their GoldCoins. Others see that the remaining balance in the escrow fund falls below the sum of the value of all existing GoldCoins - or gets closer to that limit (side question: is the health of the fund public?). In fear of their money, they will sell all their GoldCoins as fast as possible. The fund goes bankrupt.

My question: What happens in such a case??? The escrow fund cannot buy the GoldCoins back, due to the lack of MasterCoins. As a result, the value of a GoldCoin drops to a marginal value. Will the escrow fund then

a) still sell GoldCoins for the market price of real gold? If so, certainly nobody will buy any and the currency is dead forever.

b) sell GoldCoins for a much lower price. But even then, the 'health' of the fund remains horrible. Nobody will invest, except for ridiculously low prices, maybe in the 1% range of the value of real gold. Thus, the fund can only recover, if the value of a MasterCoin suddenly rises by a factor of 100 - which is very unlikely.

I think that every user currency will face such a sitation once (and only once  ), so my assumption is that they will all eventually die.

The risk that this will happen gets amplified by the investors knowing that this CAN happen. So they will reject their user currencies, as soon they see a small profit of a few %.

Is there an idea how to prevent this threat?

If you think that my concerns are serious, I'd be happy about a bounty   18vzopGHgPikz3Sp7FfVRxqxRn1NY5Zxq8

There is an attack which has been described which works like this, and two guys are getting a bounty already for enumerating it (I'm not taking any money out of the Exodus Address until after this month). The attack requires the ability to borrow and short distributed currency (which is notoriously hard), and then you can attack an escrow fund which is under-funded (under-funded means that the MasterCoins held in escrow are worth less than the currency they support).

Just how under-funded the escrow fund would have to be will be an interesting experiment. The next revision of the spec will include some changes to make escrow-backed currencies better at keeping their escrow funds healthy, to avoid this attack. When we get to the point of implementing this part of the spec, I plan to create some unsustainable currencies, "just to watch them die". Their data-stream will simply go up at 10% per week or something absurd like that, and we'll learn a lot from watching their deaths.

It's worth noting that implementing this is the LAST planned milestone, as everyone agrees that it is the riskiest part of the spec (although it's also the part of the spec that I am most excited about). By the time we get here, we'll have multiple clients which can do savings wallets, distributed betting, smart property, distributed currency exchange, and hopefully numerous other things. If we get that far, frankly, we'll all be so stupidly rich that it won't be the end of the world if escrow funds aren't the trillionaire-creating mega-success that I imagine them to be.

[ripper234]

I heard someone raise an interesting question today.

Suppose I start an escrow fund based on a feed from a specific 3rd party provider. Then that provider, for whatever, reason, stops publishing the feed. What happens? Would all escrow funds / backed currencies based on that feed just die out at that point?

Just a quick suggestion: Allow a mechanism to specify a "feed realignment period" when creating the backed currency. If a price feed is silent for the specified amount of time (e.g. 1 week or month), then the person who created the currency can realign the currency to a new feed.

This is open to abuse, but only in the case the original feed dies. If the original feed keeps broadcasting daily, the creator of the currency has no special power.

Enhancement - perhaps currency owners would be able to vote about the identity of the successor feed.

[dacoinminster]

I heard someone raise an interesting question today.

Suppose I start an escrow fund based on a feed from a specific 3rd party provider. Then that provider, for whatever, reason, stops publishing the feed. What happens? Would all escrow funds / backed currencies based on that feed just die out at that point?

Just a quick suggestion: Allow a mechanism to specify a "feed realignment period" when creating the backed currency. If a price feed is silent for the specified amount of time (e.g. 1 week or month), then the person who created the currency can realign the currency to a new feed.

This is open to abuse, but only in the case the original feed dies. If the original feed keeps broadcasting daily, the creator of the currency has no special power.

Enhancement - perhaps currency owners would be able to vote about the identity of the successor feed.

Yes, I haven't explicitly addressed this anywhere, or in the spec, but eventually I'd like some sort of handling of dead feeds and rogue feeds. For instance, a GoldCoin could use ten different data sources so that if a couple die or go rogue, it could go on.

This implies all kinds of extra complexity (for instance, currency holders voting to add a new feed) and some new attack vectors which I haven't thought through completely (could somebody "raid" an over-funded escrow fund by acquiring a majority of the coins and then changing the feed?), so I don't plan on adding anything like this until after we have basic escrow-backed currencies running, which is already the last milestone. The basic implementation requires complete trust of the data feed, but hopefully we'll eventually add more sophisticated logic.