Ethereum: 2nd gen cryptocurrency with contract programming, "dagger" hashing

[charleshoskinson]

So... is this question answered now? Can't find it.

I have a lot of meetings and things to address today so sorry that I can't answer every question posted, but this one is important so I'll answer it now. The founders will not receive any share of the bitcoins raised outside of a transparent payroll from the holding entity.

The bitcoins raised will be used to develop the protocol and all other necessary expenses to ensure a positive ROI for investors and the long term health of the Ethereum ecosystem. We will have independent accounting as well as counsel and all expenditures will be disclosed publicly.

In terms of the founder pool, we will be releasing a document specifying the percentages, how it vests, who receives a share and the lock in times.  

[miramare]

Interesting.

I'm still not clear.

Keep watching.

[BitcoinForumator]

1.2 Trillion units?

Why not 12 Trillion? It's not that much further. 

[jimhsu]

Guys, stop with the ad hominem attacks. No need to bring in other projects or PoB into this discussion. Though PoB offers certain trust advantages when it comes to migrating from an existing cryptocurrency chain, it is by no means necessary as a means to establish trust in an IPO funding scheme. (In any case, Ethereum will be dependent in BTC at least initially, because, well, the buy-in is in BTC. Duh. Gradually as mining is established, I believe it is the dev's intention to move away from that dependency). Also, a distinction has to be made between a initial PoB buyin (ala XCP) vs. a continuous PoB scheme (ala Iain Stewart); vitalik's comments addressed the latter.

However, the community as a whole would appreciate more details w.r.t. how the "holding entity" is structured, and who exactly controls it. I assume that these details will be forthcoming. Specifically more clarity on:

We will likely use 3-of-5 multisig to hold our funds. We will be the first cryptocurrency fundraiser that we know of whose exodus address actually has a 3 at the beginning.

is welcome.

The maximum number of coins is also irrelevant (aside from technical reasons), particularly as mining output scales linearily with the amount of the initial stake. Does it matter if bitcoin has 21,000,000 or 21,000,000,000 coins, if everything is scaled up similarily?

[molecular]

The maximum number of coins is also irrelevant (aside from technical reasons), particularly as mining output scales linearily with the amount of the initial stake. Does it matter if bitcoin has 21,000,000 or 21,000,000,000 coins, if everything is scaled up similarily?

this. Mining output is 0.5x (x = number of ethers bought initially) per year. Linear inflation.

There's no cap, so where is the 1.2 trillion coming from? I think it's probably based on some assumptions (mainly a certain "x" and a certain percentage of coin loss?)

[tgerring]

The maximum number of coins is also irrelevant (aside from technical reasons), particularly as mining output scales linearily with the amount of the initial stake. Does it matter if bitcoin has 21,000,000 or 21,000,000,000 coins, if everything is scaled up similarily?

this. Mining output is 0.5x (x = number of ethers bought initially) per year. Linear inflation.

There's no cap, so where is the 1.2 trillion coming from? I think it's probably based on some assumptions (mainly a certain "x" and a certain percentage of coin loss?)

Yes, from the whitepaper:

We also theorize that because coins are always lost over time due to carelessness, death, etc, and coin loss can be modeled as a percentage of the total supply per year, that the total currency supply in circulation will in fact eventually stabilize at a value equal to the annual issuance divided by the loss rate (eg. at a loss rate of 1%, once the supply reaches 100 * (0.5X) then 0.5X will be mined and 0.5X lost every year, creating an equilibrium).

[Lloydie]

Who will invest then?

Sadly it seems that not many people will given the current structure. Its only a matter of time until a coin comes along which copies the features they like from ethereum but offers much better investor terms, which would cause ethereum to languish ensuing shortly after. I want this coin to succeed, but as it is its model is similar to Freicoin, with a much stronger disincentive and I expect that the result will be the same and or worse regardless of the feature set. Satoshi was not just an expert in coding, but also an expert in human nature. Absent of the right incentive systems, even the most brilliant currencies will never take hold.

I think perhaps there will be a first year hump. Mining should also be ok. At some point ether adoption might outpace Btc adoption. Then switchover would be profitable. Agree, Satoshi's genius is shining through.

Btw, Ethereum is a brilliant concept. I want to invest in it too.

[ak84]

A few people here didn't read the whitepaper closely enough.
1.2 trillion ether will NOT be issued at launch. At a tentative price of 0.0001 BTC, X ether will be raised. The initial money supply will be 1.5X, of which founders get .25X, ethereum reserve pool .25X, and fundraiser (investors) participants 1.0X.

After 1 year, total money supply is at 2X, with the ratios:

Founders .25X / 2.0X = 12.5%
Fundraisers   1.0X / 2.0X = 50%
Reserve  .25 X / 2.0X = 12.5%
Miners   .5X / 2.0X = 25%

Every year miners are mining .5X, this is the inflation rate

So year 1 inflation is (1.5X increase to 2X) = 33%   
Year 2 inflation is 2X to 2.5X , 25%
Year 3 inflation is 2.5X to 3X, 20%
Year 4 inflation is 3X to 3.5X, 16.66%
Year 5 inflation is 3.5X to 4X, 14.2%

I personally think the distribution model is a lot fairer than the way Nxt and mastercoin did theirs. I'm not knowledgeable enough about emunie or bitshares to comment on their model, but I think ethereum has more promise than any of these other coins PLUS a fairer distribution.

[td services]

True, the 1.2 Trillion is not mined all at once. It is more of a predicted eventual total over a time period described as the "foreseeable future". The distribution seems more like eMunie, where there is a gradual decrease in initial investor percentage stakes over time.

[Come-from-Beyond]

I personally think the distribution model is a lot fairer than the way Nxt and mastercoin did theirs.

I'd like to remind that Nxt raised only ~21 BTC.

[td services]

I personally think the distribution model is a lot fairer than the way Nxt and mastercoin did theirs.

I'd like to remind that Nxt raised only ~21 BTC.

I personally think the distribution model is a lot fairer than the way Nxt and mastercoin did theirs. I'm not knowledgeable enough about emunie or bitshares to comment on their model, but I think ethereum has more promise than any of these other coins PLUS a fairer distribution.

Mastercoin was very fair in its fundraising. NXT slammed the door in my face when I went to invest in it. Clearly, they closed the investment round 6 weeks early without advance notice to avoid further dilution of existing investors. I was busy with moving some Mastercoin to Protoshares at the time, planned on investing in NXT next.

From https://bitcointalk.org/index.php?topic=303898.480 :

Can we still join in between now and January 3? I haven't really seen any clear definition of a deadline.

I'm waiting for the answer. BCNext reads this thread.

Some changes in the plan:

1. Fundraising is over. That last 1 BTC, sent after the 2nd marking transaction, will be accepted but no more deposits should be made.
2. Nxt will be launched earlier than on the 3rd of January, right after the final test.
3. New Nxt users r supposed to be attracted by selling NXT and distributing via Nxt Faucet.
4. Messaging feature will be released later to avoid situation when somebody attempts to bloat the blockchain making it too huge for newcomers.

BTW we need one more bootstrapping server, coz 2 servers is not enough.

So, if I understand this correctly:

1) the main dev (BCNext) no longer posts directly to this thread but you purport to communicate with him and speak for him about the project, something we can't confirm,
2) the deadline for contributing BTC to acquire Nxt, which was originally described as being open until the genesis block was approved by the community sometimes at least a month from now, is now suddenly declared over with no advance warning; and
3) the BTC that were already sent to acquire Nxt, which the main dev (BCNext) promised earlier in this thread not to touch until the genesis block was generated, have now been moved.

[Lloydie]

A few people here didn't read the whitepaper closely enough.
1.2 trillion ether will NOT be issued at launch. At a tentative price of 0.0001 BTC, X ether will be raised. The initial money supply will be 1.5X, of which founders get .25X, ethereum reserve pool .25X, and fundraiser (investors) participants 1.0X.

After 1 year, total money supply is at 2X, with the ratios:

Founders .25X / 2.0X = 12.5%
Fundraisers   1.0X / 2.0X = 50%
Reserve  .25 X / 2.0X = 12.5%
Miners   .5X / 2.0X = 25%

Every year miners are mining .5X, this is the inflation rate

So year 1 inflation is (1.5X increase to 2X) = 33%   
Year 2 inflation is 2X to 2.5X , 25%
Year 3 inflation is 2.5X to 3X, 20%
Year 4 inflation is 3X to 3.5X, 16.66%
Year 5 inflation is 3.5X to 4X, 14.2%

I personally think the distribution model is a lot fairer than the way Nxt and mastercoin did theirs. I'm not knowledgeable enough about emunie or bitshares to comment on their model, but I think ethereum has more promise than any of these other coins PLUS a fairer distribution.

Based on above.

ROI 0% requires ether doubling in value in Btc terms in first year. If Btc rises 10 times in fiat, ether needs 20 times increase in fiat terms for ROI to 0%.

Every year after that, ether depreciates per table above. This implies adoption rate must exceed Btc for it to ROI positively as Btc is strongly deflationary.

[vlight]

Based on above.

ROI 0% requires ether doubling in value in Btc terms in first year. If Btc rises 10 times in fiat, ether needs 20 times increase in fiat terms for ROI to 0%.

Every year after that, ether depreciates per table above. This implies adoption rate must exceed Btc for it to ROI positively as Btc is strongly deflationary.

What is the point of measuring Ether's ROI in terms of BTC? Why not just measure in terms of fiat, or gold? Why choose a volatile BTC?

[Come-from-Beyond]

NXT slammed the door in my face when I went to invest in it.

Obviously, we put different meaning into "fair", ok, never mind.

[Lloydie]

Based on above.

ROI 0% requires ether doubling in value in Btc terms in first year. If Btc rises 10 times in fiat, ether needs 20 times increase in fiat terms for ROI to 0%.

Every year after that, ether depreciates per table above. This implies adoption rate must exceed Btc for it to ROI positively as Btc is strongly deflationary.

What is the point of measuring Ether's ROI in terms of BTC? Why not just measure in terms of fiat, or gold? Why choose a volatile BTC?

We pay in Btc. Volatility is a subjective measure in terms of time scales. Using one year time scales, I find Btc volatility is ok.

[td services]

NXT slammed the door in my face when I went to invest in it.

Obviously, we put different meaning into "fair", ok, never mind.

So, why was investment in NXT ended 6 weeks early?

[Come-from-Beyond]

So, why was investment in NXT ended 6 weeks early?

https://bitcointalk.org/index.php?topic=345619.msg4383169#msg4383169

[td services]

So, why was investment in NXT ended 6 weeks early?

https://bitcointalk.org/index.php?topic=345619.msg4383169#msg4383169

Q:  Why was the initial funding cancelled suddenly with few people?
A:  I wanted Nxt to be launched by the community, not by a single person.  Success of Nxt is supposed to be achieved by work of a LOT of PEOPLE.

How does ending investment early without advance notice contribute to achieving the above?

[Come-from-Beyond]

How does ending investment early without advance notice contribute to achieving the above?

No idea. U should ask BCNext.

[td services]

How does ending investment early without advance notice contribute to achieving the above?

No idea. U should ask BCNext.

Funny, I can't seem to get anyone to admit that investment was ended ended early in NXT or cancelled in eMunie to prevent further dilution of existing investors, though it is obvious that this is the case.