Hop Whitepaper Altcoin Solution for Trustless Decentralized BTC USD Exchange

[cunicula]

and predictive models are verified, the math is worth less than the ink on the paper.

I don't use any predictive models. Anyway predictive models are not verifiable. Ask David Li about that yourself.
He's an actuary by the way. Not an economist.

But thanks for volunteering to make yourself scarce. I hope you'll stick to that.

[1713498551]

1713498551

[1713498551]

1713498551

[dacoinminster]

Anybody who wants to read cunicula's detailed economic critique of MasterCoin can find his thread about it here: https://bitcointalk.org/index.php?topic=283666.0

He did a pretty good job of collecting all the economic criticisms in one place, although note that the thread is self-moderated, and he has a pretty high threshold for what he considers off-topic. For instance, he deleted my reply as not technical enough:

MasterCoin here.

Just found this thread. Thanks for collecting all this. Did you see that d'aniel and bytemaster shared a 6 BTC bounty for their description of an attack on the escrow fund idea? The spec changed as a result. I'm not aware of any other attacks on escrow funds which are feasible other than the one they described.

That said, the MasterCoin escrow fund feature is very experimental, and is known to stop working when the escrow fund is sufficiently unhealthy. Escrow funds are going to be the last major feature implemented, since we have a lot of other features we know will work, and will be awesome all on their own

Good luck on your own project - I look forward to seeing what you come up with!

Interested parties wanting to discuss his criticisms can try posting there, or in one of several MasterCoin threads.

[cunicula]

Well I decided to go for the jugular.

https://bitcointalk.org/index.php?topic=298677.msg3199026#msg3199026

Let's see them try to refute the claim that bitshares is a ponzi.

[charleshoskinson]

Let's see them try to refute the claim that bitshares is a ponzi.

A sum zero system with no premine and fully collateralized positions to serve as a prediction market is in no way a ponzi scheme. I'm not going to argue with an idiot. We addressed your concerns in our thread. This is a thread about your product. Please do not slander ours in it. 

[dacoinminster]

Let's see them try to refute the claim that bitshares is a ponzi.

A sum zero system with no premine and fully collateralized positions to serve as a prediction market is in no way a ponzi scheme. I'm not going to argue with an idiot. We addressed your concerns in our thread. This is a thread about your product. Please do not slander ours in it. 

Yes, just offering interest (or dividends) does not make a Ponzi scheme. For instance, if Ponzi really was investing 100% of the money he collected in arbitraging postage stamps, it wouldn't have been a Ponzi scheme, and we would be calling his scheme something else today. Calling bitshares a Ponzi scheme doesn't do much for your credibility.

[cunicula]

Let's see them try to refute the claim that bitshares is a ponzi.

A sum zero system with no premine and fully collateralized positions to serve as a prediction market is in no way a ponzi scheme. I'm not going to argue with an idiot. We addressed your concerns in our thread. This is a thread about your product. Please do not slander ours in it.  

Listen. Let's just listen to your employee sell the system in the press:

“If you own BitBTC you can earn dividends on your bitcoins,” said Larimer. “If you have a thousand bitcoins and you convert them to BitBTC, and then you hold it for six months, then you convert the BitBTC plus the dividends you received back to bitcoins, you’ll end up with more bitcoins than you started with.”

You are offering supposedly extremely low risk returns in BTC and USD to naive investors.

You are using a magical system which you cannot possibly believe will work.
(i.e. I used to think you were just an idiot. But looking at how this is marketed in the press, it seems highly improbable.)

You are not going to be protected from the SEC just because of a cloak and dagger white paper.

Telling naive investors you can hold btc with us and earn risk free interest and sell them for 1 BTC later is fraud.

If you go forward with this project, expect to do hard time.

[cunicula]

Let's see them try to refute the claim that bitshares is a ponzi.

A sum zero system with no premine and fully collateralized positions to serve as a prediction market is in no way a ponzi scheme. I'm not going to argue with an idiot. We addressed your concerns in our thread. This is a thread about your product. Please do not slander ours in it. 

Yes, just offering interest (or dividends) does not make a Ponzi scheme. For instance, if Ponzi really was investing 100% of the money he collected in arbitraging postage stamps, it wouldn't have been a Ponzi scheme, and we would be calling his scheme something else today. Calling bitshares a Ponzi scheme doesn't do much for your credibility.

Now the actual idiot comes in to defend the scammers who are masquerading as idiots.

It is sad, really.

[tacotime]

Well, obviously we plan to include this in MC2. I'm still looking for an exchange to do the funding for development.

[Bennmann]

Why an altcoin and not a pitch to add a layer onto bitcoin itself? Seems like someone like Gavin would find something like this important enough to implement into bitcoin... but of course I don't speak for him. Have you approached anyone or made a thread in the Development/technical discussion forum?

Why is a decentralized exchange better seperated from the protocol?

[cunicula]

Why an altcoin and not a pitch to add a layer onto bitcoin itself? Seems like someone like Gavin would find something like this important enough to implement into bitcoin... but of course I don't speak for him. Have you approached anyone or made a thread in the Development/technical discussion forum?

Why is a decentralized exchange better seperated from the protocol?

You cannot add this directly into bitcoin. You might be able to do it as an overlay protocol like mastercoin.
That would require a redsign of the voting scheme.

The development and technical discussion forum is not friendly to innovation unless it can happen within the (restrictive) confines of the bitcoin protocol.

[bitcoinBull]

I find this whitepaper to be far too abstract. Can you describe some real-world examples (or even imaginary-world examples) of how this would work?

Links between hop and real world stem from data submitted by PoS miners. ... PoS Miners are expected to submit true price reports due to their financial interest in hop's success.

This only links "hop" to real-world data. Fine, prices on "hop" are reflective of real-world prices. But...

Hop offers its users the opportunity to exchange units of USD value and bitcion value on a decentralized trustless platform.

Hopdollars and Hopbits sound more like units which have the price of USD and price of bitcoin written on them. Having the price written on it is not what gives it value. What will give them value is the ability to exchange these units for "real" USD, or actual BTC. How will someone exchange hopbits for bitcoins and hopdollars for dollars? Otherwise you would just have a decentralized ledger where people are trading hopbits for hopdollars (but never actual BTC or redeemable USD).

[Aristotle]

Hop offers its users the opportunity to exchange units of USD value and bitcion value on a decentralized trustless platform.

Hopdollars and Hopbits sound more like units which have the price of USD and price of bitcoin written on them. Having the price written on it is not what gives it value. What will give them value is the ability to exchange these units for "real" USD, or actual BTC. How will someone exchange hopbits for bitcoins and hopdollars for dollars? Otherwise you would just have a decentralized ledger where people are trading hopbits for hopdollars (but never actual BTC or redeemable USD).

If I understand it correctly this is what he's claiming:
The value of Hopbits and Hopdollars should theoretically be very close to the value of Bitcoins and USD. Hopbits and Hopdollars actual values would be determined by external exchanges. The system attempts to alter the value of Hopbits and Hopdollars by increasing or decreasing the amount of "Hops" backing Hopbits and Hopdollars. These increases and decreases in backing are driven by PoS miners who vote up/down depending on the market price of Hopdollars and Hopbits on external exchanges. I.e. PoS miners would scrape exchange sites or use exchange APIs to determine their votes, and it's in the best interest of PoS miners to vote in a way that would make the prices on the exchanges to tend toward the value of Bitcoins and USD.

Is the author still advocating this idea? There's not much rationale for the design decision presented in the document. Without rationale and analysis, the equations defining the dynamics of the system look arbitrary to me.

[cunicula]

Yes, you understand my claims correctly.

Yes, I'm still advocating this.

Yes, many of the parameters are arbitrary. Some of these parameters serve a regulatory function and are intended to enhance financial stability. Other parameters are chosen to prevent gaming of the system. Arbitrary parameters != broken system

Other aspects of the system are absolutely necessary (e.g flexible interest rates for each asset, the ability to immediately arbitrage away interest rate fluctuations following price changes.)

I'm working on a higher level explanation which is more focused on the questions of why and how, rather than a providing a blueprint. When discussing why and how it is not necessary to get specific on parameters, but is essential to outline the necessary features. In a blueprint, parameters are a must.

[cunicula]

http://www.scribd.com/doc/186071279/Hop-System-for-Store-of-USD-Value

These are slides offering more of a big picture explanation. Comments please.

[Aristotle]

When someone makes a "commitment" to convert 6 months into the future, is that an "option" to convert (that can be canceled), or strong commitment? If they can't be canceled, 6 months seems like a very long time to have your money tied up in a cryptocurrency system. Though, I guess that could be somewhat alleviated by trading the "commitment?"

[charleshoskinson]

Futures contracts exist under the same structure and can be purchased years out. Imagine buying oil futures for 2017.

[jl777]

I am a bit late to discover this, hopefully cunicula is still monitoring it.
Anyway I am a C programmer and I would love to implement this, my total cash requirements for this project would be 0.00000000 BTC

Plz PM me

James

[delulo]

Guarenteed

Long-term appreciation

of Gold isn't true

Have to admit that I skipped through the script doc realatively quickly. I could not find the part that desribed how hobUSD are pegged to USD? What is the mechanism?

[klee]

I am a bit late to discover this, hopefully cunicula is still monitoring it.
Anyway I am a C programmer and I would love to implement this, my total cash requirements for this project would be 0.00000000 BTC

Plz PM me

James

If he PMs you remind him his obligation for the NXT whitepaper - he took 250K NXT for this from me, Pouncer & CfB...