This post is an article of a series of articles about the "New paradigm" that will be gradually placed on the site.
Can we imagine an alternative monetary model to recover our current economic fails?
A model to distribute the wealth, that works more fairly and more justly (in all local, national and global levels).
The model that encourages the rational cash flow - not spend it ASAP nor Hodl it for ever-.
A distribution model without “Cantillon effect” shortcoming.
A model that is absolutely decentralized.
This model has to distribute a kind of good money that has all feature of money and something more, like:
Some kind of money that is scarce and has “intrinsic value”. Thus cannot be generated out of thin air overnight.
The money that appreciates its value over time, means not declining the purchasing power even over decades, meanwhile is anti hyper-deflation as well.
The money that can be easily used for loan and lending – particularly decentralized P2P operations- but does not allow the “fractional reserve” banking system.
And the last but not least, whole ecosystem around it (including monetary mechanisms, its money features, and system users) is emerged to make world a better place for “all”, and essentially has to has mechanisms to guarantee this intention and functionality.
it’s looks too good to be true, isn’t it?
I do not think so. Indeed, not only this monetary model is feasible, but it is time to realize it. A decade after emerging Bitcoin, more people knows about economy, and there is maturate community of people who believed in Bitcoin promises - mainly “financial sovereignty”-.
Thus I explain a proposal for implementing that.
Note: The numbers are not random numbers.
Imagine we have a decentralized monetary system/software that creates new money regularly . Precisely two times every day. Once at 00:00:00 and second at 12:00:00.
Each cycle (12 hours) the software issues nearly 45 million new coins, and right after minting, the software divides coins between system participators.
The mechanism of distribution of coins is pretty simple and straightforward. Whole coins are being divided between participators based on their participation amount. You work more you get paid more, you work less you get paid less. It is enough fair for distributing fresh coins, meanwhile we do not need mining mechanism and endless PoW consensuses. Blocks can be created freely (therefore no limitation in TPS) and will add to blockchain – or better named blockgraph, since the data structure will be DAG and not a link list- immediately.
In order to avoid spamming network, blocks have a fixed cost, apart transactions fee. The block cost and transaction fees will be divided between participators same as newly minted coins.
You may have these questions:
- What kind of participation, people can do in this software (system or community)?
- “Who” and “How” measures and evaluates the participation “quantity” and “quality”?
- How this blockchain will secure itself against “chain reorganization” and rewriting transactions history?
- What about famous double-spending problem? How can we solve it in a DAG?
Things getting complicated, but do not panic. Keep continue reading and I‘ll explain all points in easiest possible way.
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What kind of participate, people can do in this software (system or community)?There is no limit for activities, but intentionally we start from “develop” and over time expand it to wider range of activities.
The “develop” refers to every activities we need to develop our system and its proper community. Some of them are software developing, test, design, documentation, manuals, translate, tutorials and educational stuff, etc...
These kind of activities can be measured and evaluate fairly.
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“Who” and “How” measures and evaluates the participation “quantity” and “quality”?The users community are proposers and evaluators simultaneously. They evaluate and accept (or reject) the other users proposal. Every single proposal is put to a vote, and “all” community can upvote or refute proposal. For example you translate some documents or you suggest some tips to improve system. You propose your participation worth 5 hour of level 6 (later we will come back to “level” issue). Your job overall will be 30 point (5 * 6) and if the current community members accept your proposal you will be new community member with 30 score. Thus from now on you earn from network treasury in proportion of your score (your score is indeed your shares). You have also voting right in proportion of your shares. You can always do new jobs and increase your shares (if community accept your proposal).
You may argue: It is unlikely and also impractical that everyone would evaluate every proposals and works done by every one else every day.
So we need another mechanism to encourage people to participate in proposal evaluation. So the rule is “every new proposals by default are approved”. So if no one go to vote, the proposal will be approved after polling time frame. Since the issuing coins amount is fixed, new shareholders means less dividend. Thus community has enough incentive to participate in polling and will investigate wisely on every single proposal.
Is it technically possible? In old classical human interaction this kind of decision making was too costly and nearly impossible, but with internet and blockchain technology it is absolutely possible, even for entire world population. Believe me, I am a technical person.
Some may argue, by this mechanism, There is a perverse incentive for shareholders to undervalue the work by other people (up to zero).
Let imagine the network consist of me myself only as initiative shareholder. Obviously I get all new money, but what is the point? If I do not find somebody whom accepts my money in exchange of her/his goods or services, the money worth nothing forever.
Because of human nature, we prefer to keep more coins for ourselves. If it is not possible so we will divide coins between as less as possible people, and if this is not possible too, we will divide it between our clan.
But none of these 3 approaches will help our network -particularly the value of our money-,.
The network has to be expanded and embraces new members to raise up the money usability, applicability and popularity in order to advance its market range. Bigger community means less daily coins for each, But also means more usability and applicability for the community’s money.
Hence community has to be grown and every decisions are made by polling, the community has to add more and more honest person and not corrupted one. Otherwise community dies in early steps and their money will never be a valuable asset. Thus there will be no reason for participators to participate in project any more.
Today I strive to raise population to two person and tomorrow we both invite two new member, and so on.
The community grows because of its improvement and vice versa.
What about bad actors? Even bad actors have to follow rules and do something good for system in order to gaining power, and this empowers system even more.
There is a catastrophic case in which the majority of system are bad actors and they accept corrupted proposals and gain more and more power. The bad actors can create million sock puppets as well. I personally can not understand why bad actors want to help an open source and free software (and free community) development. Unlike Bitcoin which is a particular case, and sh**t coins which are created by companies to profit them, our new money is absolutely free, and intentionally by its design will be too easy to fork a new coin in couple of hours. The good guys can fork a new coin and bring entire history (and shares of good actors) to a new community and boycott bad doers or vice versa and bad doers create a new community. Both are ok. End of the they we have two or two thousand different community and coin. Some of them has more population some less. As long as the population are happy and use and support their coin, everything is in best condition.
So what is the benefit of bad actors? If they want to earn more coins in order to change it to fiat, but who wants their coin? Indeed the new coins worth nothing for a wile. It takes at least 3 to 5 years for new money to have value and returns investments. Can a corrupted community last 3 years? I don’t think so. What I call this condition is “
power of fragility” means, “million of communities and coins can emerge and disappear”. For more details see
https://bitcointalk.org/index.php?topic=5303276.0 . Every community start with a level of decentralization and over time can move toward more decentralization or centralization.
Only the better one can survive since we are based on real “free market” and no external intervention. IMHO survived communities will be more decentralized and more democratic communities.
How this blockchain will secure itself against “chain reorganization” and rewriting transactions history?
I think I already answered this question. The share holders secure the network and transactions history. If a transaction worth enough to more than 51 percent of network colluding and change the transactions history this network must be collapsed as soon as possible. This network worth less than that transaction. This network is fully corrupted and most probably is not decentralized at all. I can not imagine a network that is worth cheating and fraudsters have more than 51% stake in this system. This is a contradiction.
What about famous double-spending problem? How can we solve it in a DAG?This part is a little technical, in short, there is an strong solution for avoiding “double-spend” in system. If you are not interested in technical details please jump to conclusion.
So lets start with CAP theorem which claims in a “partitioned” distributed system you can not have both Availability and Consistency features together and you can have only one of them. So I chose Availability in spending “maturated” coins, and Consistency in spending “not maturated” coins.
That is, you will be owner of newly received invoices immediately after recording it in DAG, but you can not spend it before 12 hours after block creation date. Because of this timing we can apply Besantin consensus on a c crowdy network (even million nodes of validator/participator).
Each node immediately records received blocks, and marks the block used coins as used coins. If later the node receives some blocks which are trying to double-spend the coins, the node records all these suspicious blocks in DAG as well. Meanwhile node generates a report about transaction reception order and sign it and propagate his idea about the right order of transactions, based on his perspective. e.g. node 1 claims he received 2 transactions x and y in this order. First he got transaction y and after 10 minutes he got transaction x. the node 1 propagate this report to all his neighbors and the neighbors propagate is as well. Meanwhile node 2 may claims I get the x,y in different order. He may say, I first got x and after 2 hours I got y. so the node 2 also propagate his report about transaction order.
The entire network can propagate their report about the order of received double-spend transactions.
The network have 12 hours time frame for this reporting activity. After 12 hours all network will have same set of different reports from different nodes. So they can evaluate reports, score them based on reporter’s share, and summarize it in order to decide about the real order of transactions.
The outcome will be one of these decisions.
A: one of transactions is first transaction (based on majority votes), and it is valid transaction and acceptable, the other transaction(s) will be rejected.
B: Both transactions are rejected and the engaged inputs will be ceased in favor of network treasury.
The actual implementation is a bit more complicated and you need to read implementation document in detail.
In short, every transactions are recorded in DAG immediately. So the coins are spent definitely and spender can not reverse the transactions at all. In recipient side, s/he can spend coins after 12 hours. If spender tries to cheat the coins, the coins could be ceased in favor of network treasury. Thus cheater will hurt himself. Indeed after a certain time, cheater even can not hurt himself and transactions are hard confirmed.
You may argue 12 hours mandatory delay before spending new received coins it too much.
The answer is yes. it is too much, but in what point of view and which concept? The system/software/community that I aimed to create is designed for make the world a better place. So I do not care about speed that much. In a world in which people do not get paid even after of months of hard working, 12 hours won’t hurt anyone. Additionally some features like speed (and huge data process/transfer ability) forces project to be used by who can afford these services, means more centralization, which is not my goal absolutely.
You may argue about Besantin consensus algorithm and it’s shortcoming in scale. It is not true. By this 12 hours offset, the Besantin works perfectly. Although reports about double-spending can sink network , but for that there are solutions too and just for brevity I do not go in details here.
Conclusion:
so we can create a new monetary system to address some of fault in our current economy system, meanwhile it makes life better for many people. It is not a charity and hopefully we will eliminate the necessity of charities.
It is not UBI or any “one way resource distributing”, due to the fact that there is no one which is completely useless for the community, causing to be, only a frail consumer. Everyone is a precious asset. We must appreciate her/his participating in make the world a better place and compensate it.
I will gradually add new documents -either technical or not technical- to cover all aspect of the proposal.
It looks most of us “wish” a better world, but the point is do we “will” the better world?
Happy new year
Hu
P.S.
All critics are welcomed.
Critics + participate offers are more welcomed.
