[ANNOUNCE] EnCoin - An alternative with a completely different paradigm

[johnj]

OP, let me be frank

I've only been here ~ 1 month and I've seen 4 alt-chains stagger and fall.  So I can only imagine the others here too are... extra hard on other propositions.

I'll admit I didn't read your whole proposal. I see some of your points that you've addressed here on this thread.  Basically the argument is "Bitcoin is a great idea, not so good in execution, let's go ahead and start a new chain taking the lessons we've learned, because bitcoin is screwed in the future"

And you may be completely correct.  But all I hear right now is "I think the sky may be falling, and this is how we might be able to fix it". Which given the current environment isn't enough (for me at least) to look into it further.  Until it's launched.

[Lolcust]

OP, let me be frank

I've only been here ~ 1 month and I've seen 4 alt-chains stagger and fall. 

Which ones ?

Ixcoin is quite fine, derelictcoin ( i0 coin ) is fine as long as someone does not pull the plug on that poor dead miner's private pool , Solidcoin is... well, somewhat flaccid, but still around, and namecoin is recovering.

So, which forks have "fallen" ?

[johnj]

OP, let me be frank

I've only been here ~ 1 month and I've seen 4 alt-chains stagger and fall. 

Which ones ?

Ixcoin is quite fine, derelictcoin ( i0 coin ) is fine as long as someone does not pull the plug on that poor dead miner's private pool , Solidcoin is... well, somewhat flaccid, but still around, and namecoin is recovering.

So, which forks have "fallen" ?

Let me rephrase,

4 alt-chains have 'come out swinging' and are now 'in trouble'.  Fallen was an overstatement, I'll agree. But I wouldn't mine any of them right now.

[Minsc]

A single tweak alone, especially some money thing is lacking.

What do you mean? I am open to suggestions. I intended to start a discussion on EnCoin, not BitCoin, after all.

People make alternatives with a small number of improvements.  The real replacement with have major improvements.  See the threads I created in this subforum with suggestions as I made lots of good ones.  Then add everyone else's too (like how solidcoin v2 got rid of the GPU mining cheat so it's CPU mining only).  Then you need someone good at math to figure out how it's done.  Then peer reviews to tweak the idea.

A real improvement of bitcoins won't be a small number of improvements, it will be a huge, vast amount of improvements over ever facet of bitcoins.

[dayfall]

Do I understand correctly that the OP is suggesting that no one should buy coins above $2 and instead any person that wanted bitcoins should buy a rig that takes months to pay off and then trickle in coins?  If everyone did that then difficult would increase to solve the problem. Well, then if not then everyone they would just buy at market price which would set it to the correct value.  Again , no problem.

[Etlase2]

Do I understand correctly that the OP is suggesting that no one should buy coins above $2 and instead any person that wanted bitcoins should buy a rig that takes months to pay off and then trickle in coins?

I'm suggesting that this ever-expanding return on investment is not sustainable. Believe it or not, in the real world, making money takes time and effort. BitCoin users need to get over this idea that they are owed money because of their "smart, early" investing. BitCoin is either a currency or an investment. If it's a currency, it has turned out to be a rather terrible one so far. If it is an investment, then what the hell is the utility (value) of BitCoin? No products or services are produced. It is not a company with stockholders that make a product. Instead, EnCoin proposes a system, that yes will take time and some effort, but the return is a stable medium of exchange for which people will want to purchase and use. Not purchase and hope to make more money on people down the road who intend to do the same thing. BUT, because of the nature of it, it is still a reasonable investment due to the inflation of fiat currency. Just nowhere near on the order of 3 million % returns.

If everyone did that then difficult would increase to solve the problem. Well, then if not then everyone they would just buy at market price which would set it to the correct value.  Again , no problem.

Whether or not you believe the issues I have with BitCoin are actually issues, you aren't getting it. You propose that making coins more scarce solves the problem, because then people will make a profit. This keeps working until a large enough percentage of coins, that were made at a cost to produce that is less than today's value, start being sold or traded. The market will correct, the current miners will be unprofitable, and the BitCoin economy (and safety of the network) will shrink.

People make alternatives with a small number of improvements.  The real replacement with have major improvements.  See the threads I created in this subforum with suggestions as I made lots of good ones.  Then add everyone else's too (like how solidcoin v2 got rid of the GPU mining cheat so it's CPU mining only).  Then you need someone good at math to figure out how it's done.  Then peer reviews to tweak the idea.

A real improvement of bitcoins won't be a small number of improvements, it will be a huge, vast amount of improvements over ever facet of bitcoins.

GPU mining isn't really a "cheat." In fact, it is better for the EnCoin economy because more value can be put into it in a shorter amount of time, as GPUs cost more to run than CPUs.

As I said, EnCoin is not a fork of BitCoin, so most of the "improvements" made or proposed by other *Coins do not apply. The entire base of economy and the entire underlying network is vastly different. The similarities lie in the fact that it is still based around a cryptographic currency.

And to top it off, as part of the bootstrap, EnCoin proposes to award both EnCoins and BitCoins for the same work.

And you may be completely correct.  But all I hear right now is "I think the sky may be falling, and this is how we might be able to fix it". Which given the current environment isn't enough (for me at least) to look into it further.  Until it's launched.

Waiting for the sky to actually fall may be a problem, as faith will probably be lost in any kind of cryptocurrency.

And I can't launch it with my skill lacking in several areas. I would need help. So far nobody has offered any.

[BCEmporium]

Just took a while to overread what you put to that pastebin.
Sorry for being so hostile early, but at this point you really should avoid words like "successor", "replacement", "super-duper fix them all btc bugs" and alike, due to recent events you would probably jump over the "yet another scammer" cliff. A simple "alternative" would do.

It looks a bit messy on some subjects, despite of the mining related you're already discussing. I can't understand why would someone use its "paid messenger" features as it isn't anonymous and the "global paid" sounds more like paid spam messages. I don't quite agree with currencies with built-in services, like namecoin, from my point of view a currency should be plainly neutral to what you do with it... just like cash in your wallet, you don't have "groceries coins" and "butcher coins", you've cash you can trade for anything, the only built-in service of cash is if you want to print or write and run out of paper, but even so white paper would suit better the purpose and you can buy a bunch of them with a bill.

In fact a virtual currency can give some features physical currency can't, but by using them the line between what is a currency and what isn't could be crossed over.

[Etlase2]

Just took a while to overread what you put to that pastebin.
Sorry for being so hostile early, but at this point you really should avoid words like "successor", "replacement", "super-duper fix them all btc bugs" and alike, due to recent events you would probably jump over the "yet another scammer" cliff. A simple "alternative" would do.

I did say possible successor, after all. To be fair, I posted this in the main BitCoin forum without knowing the trials and tribulations of this forum. I have been out of the loop for several months as this project dropped off my radar. I decided to put a clean proposal together as there is interest in using BitCoins in another hobby of mine, so it reignited my wish to get this out there.

edit: I have changed the title of the thread to be less threatening.

It looks a bit messy on some subjects, despite of the mining related you're already discussing. I can't understand why would someone use its "paid messenger" features as it isn't anonymous and the "global paid" sounds more like paid spam messages and I don't quite agree with currencies with built-in services, like namecoin, from my point of view a currency should be plainly neutral to what you do with it... just like cash in your wallet, you don't have "groceries coins" and "butcher coins", you've cash you can trade for anything, the only built-in service of cash is if you want to print or write and run out of paper, but even so white paper would suit better the purpose and you can buy a bunch of them with a bill.

In fact a virtual currency can give some features physical currency can't, but by using them the line between what is a currency and what isn't could be crossed over.

A very reasonable point of view. While the global messages would undoubtedly be used for spam, that spam increases the worth of all EnCoins (not to mention it is a good way to get people to find out about services that would accept EnCoins). Additionally, my intention by having a message system built-in would be so that MR. EVIL DEVELOPER could not be the only [easily accessible] voice for the future of EnCoin. Perhaps I wax a bit too idealistic, but global messages could be turned off from a click of the mouse--or rather, they would be relegated to a separate section of the GUI and it would be up to the user if they ever want to view them.

AFAIK, it is possible and it has happened that people send messages or other garbage in BTC transactions anyway. May as well put a charge on the feature to help the network, imo.

[dayfall]

When bitcoins reach equilibrium and sell for about $2, do you think anyone will want to mine anymore when they cost $3.60 to sell for $2?

I don't think you got it considering my questions were not answered.  The answer to your conundrum is that no people won't mine at that cost to produce.  Hence difficulty will go down, to um, about $2 to produce.

You propose that making coins more scarce solves the problem, because then people will make a profit.

No, actually I didn't.  Besides, the profit comes from Bitcoins being valued more highly than they were.  Do you propose to make your coins worth less if they become widely used?  Would by balance decrease as my old coins aged or if Encoins become popular?  How will I be compensated if they flop?  

Would the 10,000 BTC pizza effect ever happen to your coins?  I honestly don't see how you could prevent it other than printing massive amounts of new coins to meet demand.  You obviously don't want your coins becoming scarce.

Sorry, I don't believe you can pin the value of your coins to the cost it took to produce.  Though, I would praise you if you could.

[Etlase2]

I don't think you got it considering my questions were not answered.  The answer to your conundrum is that no people won't mine at that cost to produce.  Hence difficulty will go down, to um, about $2 to produce.

Then you have the issue of the network being less secure. The door is left wide open for all of the angry BitCoiners that just lost a lot of money to devise a competitive fork or to potentially even attack the current blockchain. Either way, it will create a cascade of effects that reduce the value of BTC.

You said difficulty would increase, I guess you meant decrease. So I was a bit confused as to what you were saying.

No, actually I didn't.  Besides, the profit comes from Bitcoins being valued more highly than they were.  Do you propose to make your coins worth less if they become widely used?  Would by balance decrease as my old coins aged or if Encoins become popular?  How will I be compensated if they flop?

Now I'm really confused. How are BitCoins valued more highly than previously if the cost to produce BitCoins drops or stays level?
EnCoins coins will not be worth less if they are more widely used. The market factors would hope to achieve a stable equilibrium by more people minting coins if demand is higher (network expands in use). The sell prices would rise, so it would be more lucrative for more people to make coins. Ergo, more people mint coins. But, because coins are destroyed as the network is utilized, the demand will hopefully never get to a point where the network is a flop. Your balance would not decrease, unless as I suggested in the technical details, that a system is imposed where balances will slowly be wiped out if there is no use in an account. This is to keep hundreds of thousands of unused wallets with little to no balances from being repeated in every primary block. It is a waste of bandwidth. Also, due to the nature of the cryptocurrency, some balances will be forgotten and must eventually be expunged.

Are you joking when you ask how you will be compensated if it flops? How will you be compensated if BitCoin flops? EnCoin proposes a very smart hedge to your bets by awarding both EnCoins and BitCoins by piggy-backing on the BC network.

Would the 10,000 BTC pizza effect ever happen to your coins?  I honestly don't see how you could prevent it other than printing massive amounts of new coins to meet demand.  You obviously don't want your coins becoming scarce.

No, the 10,000 BTC pizza would never happen. Coins will be difficult to mint from the start. Every coin will have a similar value to produce (10kWh). Scarcity is not the primary aspect of what would theoretically bring value to an EnCoin. However, small bubbles and collapses (if you could call them that) would happen as demand far outstrips supply if the network were to expand. However, the network will always work towards an equilibrium as the cost to produce an ENC does not change, there just may not always be enough to go around. Because one person can not just mine thousands of coins instantly, there is little risk of Black BitCoin days that have happened several times already. Relatively high transaction fees (compared to BC, not the real world) imposed from the start will also reduce this risk as even if 10 million people start mining, they will have to spend a lot of time mining before they can make a profit with the transaction fee. Slow and steady.

Sorry, I don't believe you can pin the value of your coins to the cost it took to produce.  Though, I would praise you if you could.

The sell price will be determined by the market; supply and demand. The cost to produce will remain constant. The cost to produce a BitCoin has been anything but constant, with a factor of 2,250 times difference between the 1st BTC and the 7.3 millionth BTC. And that is electricity only, not including the cost of hardware.

The goal is that 1 ENC's value should never drop below the cost to produce plus a reasonable profit margin. Of course, if the network flops, this will happen.

[julz]

What is to stop the accumulation of encoins becoming so great that it vastly outweighs the size of the encoin economy?
(much as is now the case with bitcoin)

If a large number of  encoiners believe the value of an encoin is roughly that of 10kWh and that encoin is the way of the future - then presumably these things will be generated widely, not just for immediate use, but as a way to save.  (especially if there are various impediments to direct purchase - as is currently also the case with bitcoin, and I suspect why many mine rather than buy)

Corporations with good electricity discounts, and consumers in countries with lower rates might build up significant stores with the expectation that they'll effectively get a slight premium in the end due to their production cost being lower than the average.

Don't we then have the situation where a few large holders who need to sell for some reason, could effectively spook the market and also cause a crash in value to well below the cost of production?

I don't see that situation as necessarily a death knell for either encoin or bitcoin - but I'm just not yet seeing how encoin is guaranteed some price equilibrium approximately near the cost of production.  Does the design of encoin allow a determination of how many coins are 'out there'?

Even if a rough 10KWhr price correlation were achieved - the price differential in electricity around the world is huge. For a vast number of people, the value of encoins would primarily be a function of what some other small group of nations paid per KWhr.  Perhaps for example encoins will predominantly be produced in the Ukraine with it's cheap Nuclear power.   

[Etlase2]

What is to stop the accumulation of encoins becoming so great that it vastly outweighs the size of the encoin economy?
(much as is now the case with bitcoin)

Nothing, really, but there is no promise of future, staggering returns as with the design of BitCoin. But realistically, the only way the accumulation of coins could vastly outweigh the economy is if the economy collapses. An EnCoin won't cost more than 10kWh to produce, so if hoarding becomes the norm, "late adopters" can mine without the fear of the rug being pulled out. They may not see the hundreds of % returns that the sell price promises (assuming a sell off between), but they will not lose money unless coins become so common that they sell for less than the cost to produce. Again, this points to the collapse of the economy, which is not likely if hoarding is driving up prices.

Also, transaction fees must be taken into account. No one can mine 25,000 encoins unless they have done it for decades. The only accounts that will have balances in this range will be legitimate businesses who will have no interest in devaluing their coins for a quick profit (if they would even be capable of doing so). So if a large number of people hoard their small amount of coins, transaction fees will cut large in to the potential profit (and potential damage to the market). Because the more people that make smaller transactions, the more currency is destroyed.

Corporations with good electricity discounts, and consumers in countries with lower rates might build up significant stores with the expectation that they'll effectively get a slight premium in the end due to their production cost being lower than the average.

This is exactly the same scenario as with BitCoin. Nothing can really be done about it. If it is prohibitive to produce coins for you, then you will have to buy them for fiat, or mine at a slight loss. Again though, building up significant stores is a lot easier said than done. Insanely more difficult than with what originally happened in bitcoin.

Don't we then have the situation where a few large holders who need to sell for some reason, could effectively spook the market and also cause a crash in value to well below the cost of production?

Temporarily. Part of the ingenuity of EnCoin is that computational power is not required to secure the network. In fact, I have already added another point to the technical details section that should allow for well-trusted network trusts to go into a "cool down" mode where they would only be required to work for a very small amount of encoins to maintain their trust, but would still be part of the total network trust. So if the value is low, stop (or significantly retard) mining, keep the network secure, and allow transaction fees to increase the value of encoins until it is profitable to mine them again.

Businesses wouldn't even need to base their value of encoins on the current market price. With smart utilization of the network, they could be close to sure that the price will return to equilibrium again (this will, of course, require some history). Trades outside of the markets could potentially go unaffected.

I don't see that situation as necessarily a death knell for either encoin or bitcoin - but I'm just not yet seeing how encoin is guaranteed some price equilibrium approximately near the cost of production.  Does the design of encoin allow a determination of how many coins are 'out there'?

There is no guarantee, only the systems I've described that make the attempt. But if the economy is functioning and healthy, I think it will be a hell of a lot more stable than bitcoin. The total number of coins will be an easily available number. Simply add up the balances of all the wallets in the most recent primary block.

Even if a rough 10KWhr price correlation were achieved - the price differential in electricity around the world is huge. For a vast number of people, the value of encoins would primarily be a function of what some other small group of nations paid per KWhr.  Perhaps for example encoins will predominantly be produced in the Ukraine with it's cheap Nuclear power.  

Again, there is nothing that can be done about this and it is an issue that affects bitcoin as well. It is less of an issue with bitcoin because the ROI is ridiculously high, but I highly doubt that this will always be the case. If EnCoin becomes a true medium of trade rather than a "check what it's worth on the exchange" type commodity, I think this will have less of an impact than you might think. If EnCoins are cheap to produce in Ukraine, products and services in Ukraine would cost comparatively more EnCoins.

[bulanula]

This sounds very good ! Keep on going.

What people don't understand is that bitcoin is not the "god" currency. There will be better offers soon. It is wrong to assume the first one is the best one and will survive. You have too much of an emotional attachment to this project.

Satoshi ( mark karpeles ) is also a pump + dumper ( 20k dumped last week etc. ) so what is different ? The difference is nobody wants to admit it as they have all been sucked into this clever scheme.

Eg controller price = harder to attack network ( eg gov manipulate btc price and bring price down - miners quit - easy to attack network even without massive power needed ).

[Minsc]

Satoshi ( mark karpeles )

Do you have evidence of this?

[bulanula]

Satoshi ( mark karpeles )

Do you have evidence of this?

Do you have evidence of God. Is that what you are trying to say ? Because he sure seems like a god around here  

Do you have evidence you did not steal my bitcoins a few weeks ago etc. Nope you don't, i don't, nobody does but it is pretty obvious the two are connected if you look more carefully. I let you to enlighten us.

Eg for all i care satoshi = mark karpeles = the manipulator = pro pumper and dumper = artforz = deepbit owner etc. anything is possible and some of these might be very true  Too much coincidences. Who dumped 20k last time ? Why so Japan focussed ? Why mtgox first exchange from japan ? Why artforz first to mine with gpu power and control 25% of hashing power at first ( look it up on wiki ) ? Why satoshi own 25% of bitcoin when nobody knew about it then dump ? All seems to one person's interest. All these aliases made a ton of cash with this clever scheme. We pay the price.

Until you have proof that satoshi definately does NOT equal mark karpeles then the opposite can be also rightly be assumed true etc.

[Minsc]

mark karpeles?

[bulanula]

mark karpeles?

Owner of mtgox - also from japan LOL

[dayfall]

You said difficulty would increase, I guess you meant decrease. So I was a bit confused as to what you were saying.

I said what I meant.  If the price of BTC is too high relative to mining then people should naturally mine instead of buying.  Difficulty increases.  It is easy.

With your system, I have no reason to mine coins.  I can ALWAYS mine later at the same cost to produce as the coins I am buying.  Not mining now is also the reasonable option in case your system fails.  I might, however, buy at a lower than production cost.

[Etlase2]

Dayfall, increasing difficulty increases scarcity. You are trying to solve the problem by exacerbating it. The more and more people work to produce scarce coins, the more and more damage abundant coins can do.

The answer to your conundrum is that no people won't mine at that cost to produce.  Hence difficulty will go down, to um, about $2 to produce.

What do you think the 60k people that are currently mining at a cost of $3.60 ($4.30 if you include my estimate for hardware) are going to think if the sell price is around $2? For the difficulty to go down, most of those people are going to have to stop mining. This makes bitcoin wide open to an attack. For coins to drop to $2, either interest has seriously waned in bitcoin, or there has been an abundant coin sell-off. Demand is down either way. Now all of those people who mined for a cost to produce of $3.60 have lost money, and the only way to recover it is to get 60k+ mining again (preferably a different group of 60k, lol). But by what mechanism will demand increase again? Scarcity is down; people are jaded. Lowering the difficulty doesn't fix anything, it just makes everyone who mined at a higher difficulty look foolish.

With your system, I have no reason to mine coins.

Sure you do. Coins are still going to have scarcity issues (SOME of the time). The people decide when to mint, and minting is *always* difficult (not 2,250 times easier for the early adopters over the late adopters). Some people are not going to want to put together a system to run software all day that produces coins--that leaves the market open for those that do. To avoid runaway inflation, coins are destroyed by making transactions. This means as long as the network is used, there will be demand for new coins. The more transactions there are, the more demand for new coins. It is an honest, self-sustaining process. Not a process that promises to produce the majority of its value by virtue of scarcity alone. Once bitcoins become unscarce in a sell-off, there is no way to bring that scarcity back except by expecting tens of thousands of new people to demand coins. EnCoin does not require a continually expanding base of users (or a continually shrinking pool of coins) to create demand. It only requires that the network be utilized. With the ridiculous issue of speculation out of the picture, businesses can actually run a business, not a business and a side of speculation.

I can ALWAYS mine later at the same cost to produce as the coins I am buying.

This is written as if it is a bad thing. There is no evidence that the scheme behind BitCoin has produced a healthy economy. Factors point to the opposite. Being always able to mine at the same cost assures businesses that they can store encoins as a unit of value, not a unit of speculation. You can always mine now and wait for a time when demand is high to sell. Once you stop thinking of an electronic currency as being an investment, you'll be amazed at how much a different system can accomplish.

[JohnDoe]

Do you have evidence of God. Is that what you are trying to say ? Because he sure seems like a god around here  

Do you have evidence you did not steal my bitcoins a few weeks ago etc. Nope you don't, i don't, nobody does but it is pretty obvious the two are connected if you look more carefully. I let you to enlighten us.

Eg for all i care satoshi = mark karpeles = the manipulator = pro pumper and dumper = artforz = deepbit owner etc. anything is possible and some of these might be very true  Too much coincidences. Who dumped 20k last time ? Why so Japan focussed ? Why mtgox first exchange from japan ? Why artforz first to mine with gpu power and control 25% of hashing power at first ( look it up on wiki ) ? Why satoshi own 25% of bitcoin when nobody knew about it then dump ? All seems to one person's interest. All these aliases made a ton of cash with this clever scheme. We pay the price.

Until you have proof that satoshi definately does NOT equal mark karpeles then the opposite can be also rightly be assumed true etc.

I hope you don't become a detective when you grow up.