Spin-offs: bootstrap an altcoin with a btc-blockchain-based initial distribution

[FreeTrade]

Hence, it is in their selfish interest to sell off the coin slowly, over a period of time, say months or a year, thereby maximizing their profit. Trusting people to be selfish is a safe bet.

trusting people to be selfish is a safe bet, granted, but trusting them to be smart enough to realize how to maximize their selfish interest is not a safe bet.

Agreed - the more enlightened that people have to be to maximize their enlightened selfish interest, the less likely they will be able to do it.
 

[sangaman]

Just posting to say that I think the concept of spin-off coins is a fantastic idea and is the fairest and most efficient method of initial coin distribution I've heard of. I've seen enough people pop in just to bash the idea so I thought I'd offset that by praising it. Many thanks to the people who came up with it and refined it and continue to do so. Also thanks to the many intelligent and thought-provoking posts in this thread, I particularly enjoyed the one quoted at the bottom of this post.

I do believe there are substantial improvements that can be made to the bitcoin protocol - some that nobody has even thought of yet - and that pursuing them is worthwhile. Experimenting with them on the bitcoin blockchain is increasingly difficult and complicated, and that is where I think new protocols bootstrapped to the bitcoin ledger fit in very well. What makes bitcoin unique from all other cryptocurrencies is that it has the broadest user base and most mature ledger; it is the closest gauge there is for measuring people's value for and engagement with cryptocurrency. Why not take advantage of this information? Furthermore, it eliminates the incentives and mechanisms for pre-mines, pump and dumps, and other scams commonly seen with alternative cryptocurrencies.

I'd like to refine the notion in the OP of "most efficient coin distribution," why Bitcoin has something vastly closer to it and why other coins can't hope to catch up anytime soon.

*SNIP*

[CoinHoarder]

Just posting to say that I think the concept of spin-off coins is a fantastic idea and is the fairest method of initial coin distribution I've heard of.

I guess it depends on what you mean by fair. Fair as to the top 1% of Bitcoin stake holders, yes. Fair as to the bottom 99% of Bitcoin stake holders, no. Bitcoin's wealth disparity is worse than it is in the real world with hard money and fixed assets, the top 1% of Bitcoin stake holders own about 55% of the Bitcoins: http://www.cryptocoinsnews.com/owns-bitcoins-infographic-wealth-distribution/

It doesn't really look all that "fair" to me. I don't think this argument should be used in support of Spin-Offs, as the statement is a half-truth at best (and ludicrous at worst.) I am leaning towards ludicrous. It is a good idea and should be tried out as a distribution model, but championing it as the "fairest release method" is laughable.

[andy35]

Just posting to say that I think the concept of spin-off coins is a fantastic idea and is the fairest method of initial coin distribution I've heard of.

I guess it depends on what you mean by fair. Fair as to the top 1% of Bitcoin stake holders, yes. Fair as to the bottom 99% of Bitcoin stake holders, no.

This technique could be used to create a coin that only rewards the bottom 99% of Bitcoin stake holders, and excludes the top 1% of Bitcoin stake holders. Would you consider that fair?

[othe]

Just posting to say that I think the concept of spin-off coins is a fantastic idea and is the fairest method of initial coin distribution I've heard of.

I guess it depends on what you mean by fair. Fair as to the top 1% of Bitcoin stake holders, yes. Fair as to the bottom 99% of Bitcoin stake holders, no. Bitcoin's wealth disparity is worse than it is in the real world with hard money and fixed assets, the top 1% of Bitcoin stake holders own about 55% of the Bitcoins: http://www.cryptocoinsnews.com/owns-bitcoins-infographic-wealth-distribution/

It doesn't really look all that "fair" to me. I don't think this argument should be used in support of Spin-Offs, as the statement is a half-truth at best (and ludicrous at worst.) I am leaning towards ludicrous. It is a good idea and should be tried out as a distribution model, but championing it as the "fairest release method" is laughable.

But not even the Bitcoin "owners" get the coins, being a legal bitcoin owner doesn´t mean you have access to the privatekey where the bitcoin resides.
The most of those coins is stored on exchanges, markets, payment gateways etc. i guess, so i guess the following will get most of those coins:

1)Mark Karpeles AKA Mr.WhereIs6PercentOfAllBitcoinNow?
2)Silkroad/Insertwhateverelsedrugmarkethere admins
3)Bitstamp/Huobi and whatever else big exchange
4)Bitpay/Coinbase and other payment gateways
6)Satoshi
7)Lost because the bitcoins are lost...


Am i the only one who thinks this is a bit flawed?

This technique could be used to create a coin that only rewards the bottom 99% of Bitcoin stake holders, and excludes the top 1% of Bitcoin stake holders. Would you consider that fair?

No, it can´t, you can just split your Bitcoin to small amounts.

[CoinHoarder]

Just posting to say that I think the concept of spin-off coins is a fantastic idea and is the fairest method of initial coin distribution I've heard of.

I guess it depends on what you mean by fair. Fair as to the top 1% of Bitcoin stake holders, yes. Fair as to the bottom 99% of Bitcoin stake holders, no.

This technique could be used to create a coin that only rewards the bottom 99% of Bitcoin stake holders, and excludes the top 1% of Bitcoin stake holders. Would you consider that fair?

I wouldn't consider either of those options fair, as now the top 1% are completely left out of the distribution.

I would like to see the 1%'s 55% stake brought down to something closer to 1% than 55%, and the 99%'s stake increased to something closer to 99%. 1% getting 55% just doesn't seem right to me. If both sides met in the middle, I think it would be more ideal, but still flawed all the same.

Instead of implementing spin-offs on a cryptocurrency with a large wealth disparity (Bitcoin), I think it would be more fair to implement spin-offs on a more fairly distributed cryptocurrency. I think that would make more sense than playing with the percentages. For instance, Litecoin is an order of magnitude more fairly distributed than Bitcoin, there are a lot of other examples too. There just weren't enough people around when Bitcoin first came out to be distributed equally, and it results in a lot of early adopters. I think some of the cryptocurrencies being released today will have more equal distributions due to the amount of users cryptocurrencies have gained over the past few years.

[Adrian-x]

For instance, Litecoin is an order of magnitude more fairly distributed than Bitcoin,

[cynical] LOL, it isn't! I dont have any and if I had to buy LTC it would be unfair as I am enriching those who adopted early.
In addition I think the only reason LTC has value is because early Bitcoin thieves bought it up to get rid of there hot bitcoins. [/cynical]

more to your point, if it hasn't been debated here, the idea has been debated as to what would be fair, with the spin-off you could only count unspent outputs between cretin block heights, or you can exclude unspent outputs of a cretin age, or heaven forbid exclude unspent outputs of a cretin value, worse distribute to both LTC and BTC in your Spin-off.

If you believe the value is in the network of users, this idea is the most fair way to launch a new coin, further more, it's the market that decides the innovation, and dumping spin-off coins is just a way for those in the know to get cheep coins.

[thoughtfan]

I'd like to throw in my Satoshi's worth to the apparently polarising issue of whether distribution of new coins according to bitconin distrobution is 'fair' or a good idea.

I'm not one of the absolutists, believing today's distribution to totally represent some ideal that it has as a consequence of the decisions of the smartest and wisest found its way to its just place.

As others have said first there's the issue of a significant number of coins, especially early days and more recently, gox, of scammed coins out there in possession of the less savoury characters.  Second there is something in me that simply won't buy the idea that someone who mined or bought a huge chunk early and sat on it who are now worth the same as an entrepreneur who brought something fantastic onto the market and created a company and employed people and marketed it to make it happen 'earned' it to the same extent as the entrepreneur did.*  I will note that I do not begrudge early adopters and though a winter 2012/13 guy myself I consider myself both a reasonably astute and very lucky early-ish adopter myself.  Third, again as someone said further up, a rational investor who was balancing the risks might have put some money in early days but I also suspect many saw $$$s, ignored the risks and threw in way more than they could afford - even to the extent of reckless borrowing.  They may in retrospect have made a 'great' decision but like me, were also very lucky in what happened next and it could have (and in some cases still could) go horribly wrong so I don't see it reasonable to deduce that it is the consequence of rational behaviours that gives the current distribution some magic property of being just.**  No matter how good the technology, nor how good an idea, nobody knew, and nobody knows whether enough people would recognise that and want to be part of it for it to take off - and the question is still valid though much less so today.

However, in practical terms if we want to best leverage a network of people who value crypto and believe in its future then I can think of no better way than to use spin-off or side-chain-type technology which utilises the distribution of bitcoin as it is.

As for the idea of using litecoin or combination of alts etc. nobody will stop anyone from doing it but I see no value in it at all as an idea.  Much as some for instance ltc may by some criteria be a 'fairer' distribution for the reasons others have given here's why I think not:
 i) Where are the 'fundamentals' for alts in terms of numbers of wallets, numbers of transactions, numbers of merchants etc. etc? The fact there activity is miniscule compared to bitcoins leads me to believe the alt population does not largely consist of the smartest; ii) There are many who really get crypto who have not bothered with alts given so few of them are bringing anything new to the table.  This would exclude them (us) from distribution;  iii) many litecoin owners are in because they bought the 'silver to bitcoin's gold' idea which was a great way of marketing but I can still see no validity in it as a reason to consider it as being of value; iv) I know some people buy litecoin simply because it's 'cheaper' than bitcoin (per unit)!  What does that say about their understanding of crypto or maths or...?  v) ... and many people who are in the alts don't actually believe in them but just play the trading game to fleece the less astute (many of whom end up getting fleeced themselves).  As a network of people I really can't see how they'd likely turn out to have been a more valuable team of custodians for a new coin that actually does bring something substantial to the table than the bitcoin network!


*I could go on about this but to illustrate there is a parallel with owning land in the middle of a city and sitting on it for generations whilst doing nothing with it, watching the family's net worth go sky high thanks to the efforts and risks of everybody around them who is making the city a more attractive place to live thus driving up the value of their land for them.

**Just for the record, I am delighted Satoshi has what he has (assuming he still has access to the private keys) in terms of Bitcoins, would like that he he could also benefit from spinoffs and I would hope that enough people would see the injustice of anyone doing spin-offs excluding Satoshi that they don't take off.

[smooth]

It seems Cryptsy has something in their terms that explicitly gives them ownership of spin-offs, if I'm interpreting correctly (I assume that's what they mean by "conversions, snapshots"):

28. Staking Interest

Some Cryptsy wallets may provide staking interest rewards. Any staking rewards, conversions, snapshots, or likewise will become the property of Cryptsy

[Willisius]

It seems Cryptsy has something in their terms that explicitly gives them ownership of spin-offs, if I'm interpreting correctly (I assume that's what they mean by "conversions, snapshots"):

28. Staking Interest

Some Cryptsy wallets may provide staking interest rewards. Any staking rewards, conversions, snapshots, or likewise will become the property of Cryptsy

Looks like it to me. I know a lot of exchanges like to list PoS coins to collect their stake, I guess they have the same policy with snapshots. I'm also assuming that any coin using this bootstrap method will definitely get listed on cryptsy.

[sfultong]

I'll put up 2 BTC for the bounty.

Are there any known efforts towards claiming it? If so, which altcoins?

[beitris.dwlul]

it's a beautiful play on economic incentives....

[sfultong]

I plan to start a spinoff based on the bitsharesx code, hopefully soon. The initial stake will be 80% bitcoin, 10% bitshares pts and 10% bitshares ags. I'm not sure how far I can get on my own, so any coding help would be much appreciated.

[sfultong]

I've started the bitshares spinoff, which I've called "coinshares".

If you're interested in contributing:
https://github.com/sfultong/bitshares_toolkit

I'm developing in the coinshares branch.

[YarkoL]

I've started the bitshares spinoff, which I've called "coinshares".

If you're interested in contributing:
https://github.com/sfultong/bitshares_toolkit

I'm developing in the coinshares branch.

Interesting. Can the Bitshares toolkit provide snapshot of Bitcoin?

[sfultong]

No.

The initial ledger of a bitshares blockchain is set from a file called genesis.json. I had hoped that I could simply add bitcoin addresses into that, and change the transaction signing code slightly to allow for verification by bitcoin address as well as the native pts/bitshares address.

But it seems easier to just keep it a separate snapshot.bin, the way Peter R's original idea was stated. The other advantage of that, is that my code might be more reusable for other blockchains.

[tinybike]

joeykrug and I have just implemented a proof-of-concept version of the "spin-off" idea discussed in this thread:

Website: http://www.sidecoin.net
Source: https://github.com/AugurProject/Sidecoin
Whitepaper: http://augur.link/sidecoin.pdf

"Sidecoin" (our demo/example implementation) is a fork of Bitcoin 0.9.1.  We modified it to support loading "snapshot" balances into the first (non-genesis) block, as well as trustless sidecoin claims using a new "claimtx" RPC command.  Details are in the whitepaper!

Hope this can be useful to someone 

- Jack

[Zangelbert Bingledack]

Augur to go with Ethereum? If you can't figure out how to do a sidecoin/spin-off for Augur, someone else will. Hitching your wagon to anything other than the economic majority, as cumbersome as it may seem, does such a powerful idea a disservice in my opinion. Thinking Ethereum "isn't about being money" is dangerously close to the fallacious mainstream "Forget the currency, it's all about the blockchain technology" meme.

Money makes the blocks go 'round. Ethereum will fail unless it understands that, or someone will create Aetherium, or even launch it as a sidechain. The point is that the economic majority, meaning Bitcoin holders, is where the action is. Not fixing Augur's coin distribution to Bitcoin will be needlessly hampering it in the extreme.

[Bill White]

I hope to start an alt chain soon, and I'd like to use this spin-off idea for the initial distribution. Using some ocaml code I parsed the block chain up to block 346,000 (yesterday morning). It's easiest if I only handle those that can be converted to P2PkH. Since P2SH has become more popular in the past year, this would mean omitting about a million bitcoins. (To be exact 1,011,673.35678149 cannot be converted to P2PkH. The vast majority of these are from P2SH outputs.)

The total value would still correspond to over 92% of the current number of bitcoins, even if I omit "dust".

I plan to release a whitepaper and announce at least a week before I take the real snapshot I will use. This will give a chance for those with bitcoins held by third parties or held in multisig an opportunity to move the bitcoins to an "ordinary" address in time for the snapshot, if they are motivated to do so.

Question: Should this still be considered a "Bitcoin Spin-off"? I am only asking about the terminology, not an attempt to claim the bounty. To be very clear: I will not attempt to claim the bounty and do not expect to meet the criteria for it.

[alexkravets]

I hope to start an alt chain soon, and I'd like to use this spin-off idea for the initial distribution. Using some ocaml code I parsed the block chain up to block 346,000 (yesterday morning). It's easiest if I only handle those that can be converted to P2PkH. Since P2SH has become more popular in the past year, this would mean omitting about a million bitcoins. (To be exact 1,011,673.35678149 cannot be converted to P2PkH. The vast majority of these are from P2SH outputs.)

The total value would still correspond to over 92% of the current number of bitcoins, even if I omit "dust".

I plan to release a whitepaper and announce at least a week before I take the real snapshot I will use. This will give a chance for those with bitcoins held by third parties or held in multisig an opportunity to move the bitcoins to an "ordinary" address in time for the snapshot, if they are motivated to do so.

Question: Should this still be considered a "Bitcoin Spin-off"? I am only asking about the terminology, not an attempt to claim the bounty. To be very clear: I will not attempt to claim the bounty and do not expect to meet the criteria for it.

Yes, although to be more precise it could also be called Bitcoin Non-Multisig Spin-off or Bitcoin 92% Spin-off :-)