Theoretical Gold-alike digital network[Proposal]

[maok]

Hello,

Bitcoin is often compared to Gold and I'd like to dismantle this myth and propose a change( not a solution) that we can make Bitcoin useful not only in the next 100 years but in the next million years.

2-3000 years ago, Gold could be found at the surface of the earth quite easily, located in caves in huge quantity. Analogy with 2009-2013 Bitcoin period

2-300 years ago, Gold could be found just as easy but in a reduced quantity. Current Bitcoin 2013-16 period.

However Gold exists deep inside the planet and we'll mine it entirely after million of years, it also exists in other part of the universe. In this regard Bitcoin will end its last reserve in about 100 years.

Can we find a way to double the number years at each reward reduction so that the same amount of bitcoins could be found but in millions of years not only in short term of 100 years. This theoretically could be accomplished by raising difficulty at each reward reduction so that instead of finding a block each 10 minutes  we'll double it every time the reward decreases. For confirming transactions we could create a second difficulty calculated at the same time-frame of 10 minuts on which a different set of miners will work on but they won't get any immediate recompensation for finding a no-reward-block, instead they'll be rewarded when the main block will be found so that the miner who finds the main block gets 50% and the rest of 50% bitcoins will be spread between the miners who found 2nd tier no-reward-blocks.

If we implement this kind of solution at the end of 2016, there will still be 13% of bitcoins available, but instead of them to be spread in a time-span of only 100 years we could spread them so that the last bitcoin will be mined in a billion years, if humanity will still exist by then, presumably so will Bitcoin. The network effect of Bitcoin will then be even more powerful over time.

Pro and con arguments ?

P.S. an analogy with gold for the 2nd tier miners would be those huge machines that dig out earth and only then the technological method comes in play(main block miners) which separates the actual gold from other metals.
P.P.S. as an incentive to become a 2nd tier miner could be that he's awarded the fees of the transactions he included in his no-reward-block.

[cr1776]

It is software so you can do pretty much whatever you'd like. This would be a hard fork so you'd end up with coins on both forks if you had coins now, then you'd just have to convince people to switch to your fork for your new alt-coin, million-year-coin.

:-)

[maok]

I have few more points to make to better explain this proposal.

Physiologically the more we search for something, the more valuable it is(otherwise it becomes a piece of art which is rarely spent, exactly the opposite of the function that we need Bitcoin to perform which is a viable medium of exchange combined with store of value). The moment we stop searching for it or the reward will become smaller and smaller thats the moment it'll lose value. This doesn't necessarily has to happen after there's no reward left, it could happen in 1-10-50 years.

To make Bitcoin an gold-like protocol(meaning an all time valuable asset and medium of exchange) we need to also expand its search in time, just like in mining the same amount of gold mined today takes alot longer to mine it than it took 50 years ago. If we remain at the same standard we could face another problem which is miners increasing transactions fees more and more to include them into a block which can be avoided if we implement this change.

The scarcity remains the same, however the time it takes to get there(difficulty) it will progressively change with each reward decrease, so instead of 4 years it'll take 8, 16, 32.. years for the reward to drop at half. Therefore if the future generations know that you could search for bitcoin and get a reward they will continue to find it valuable, otherwise they'll come up with a different protocol which serves this purpose and Bitcoin will become just part of history.

The new Projected Bitcoins Long Long Long Term becomes:

Block      Reward Time      Reward BTC      BTC added         Main block time      No-Reward-Block time(general purpose confirmation blocks)
210000      4 years         25                  5250000(current)      10 minutes         10 minutes
420000      8 years         12.5               2625000(same)      20 minutes         10 minutes(1-2 2nd tier miners could confirm transaction till the main block gets found)
630000      16 years         6.25            1312500(same)         40 minutes         10 minutes(3-5 2nd tier miners -||-)
840000      32 years         3.125            656250(same)         80 minutes         10 minutes(6-10 2nd tier miners -||-)
1050000      64 years         1.5625         328125(same)         120 minutes      10 minutes(8-14 2nd tier miners -||-)
.....
2nd tier miners will earn the no-reward-block fees and also split with the rest of 2nd tier miners 50% of the main block reward)
.....


Opposite from what Satoshi would say, I'm better with ideas than with code so I think it would be better for the current developers to ponder on this and see if they think its a good idea or not in the long term. Its a long time till the next reward reduction in 2016 so if we can get this or something similar build in actual code out there by then it'll be great for Bitcoin's future.

[bigasic]

Once you start messing with the blockchain payouts, where will it stop? plus once you start messing around with the payouts, you go away from what satoshi envisioned. While I like the idea that you proposed. I dont think its a good idea to radically changing the way bitcoin works. They still should fix the code and add functionality, but thats it. I can see in 50 years people wanting to add a few million bitcoin to the network..

[maok]

Once you start messing with the blockchain payouts, where will it stop? plus once you start messing around with the payouts, you go away from what satoshi envisioned. While I like the idea that you proposed. I dont think its a good idea to radically changing the way bitcoin works. They still should fix the code and add functionality, but thats it. I can see in 50 years people wanting to add a few million bitcoin to the network..

The payouts will still function the same but it would take a lot longer to get to the reward, total amount of Bitcoins will remain the same only that the future generations will also be in search of Bitcoin which would make the Bitcoin protocol valuable and gold-like standard which if we implement by 2020 I think it'll only grow Bitcoin network effect. I don't think Satoshi knew that Bitcoin will become this popular, otherwise I'm sure he would've thought of this idea or similar one, he gave us the basic concept, now I think its time to expand it but within the same Bitcoin standard, otherwise its pointless.

[cr1776]

Like I said above, this will be an alt-coin and a hard fork for bitcoin. You'd have to find someone to write the code for you and then convince people to switch to your fork. It seems unlikely people will do so but the new alt-million-year coin would not be bitcoin. Without some clear need it is highly unlikely the developers will code this for you.

All that said, the code itself seems simple based on your description so it would be pretty easy to implement. The issue is convincing people to switch to your alt-coin. I believe it would take a very good reason to get people to do so. Selling it would be something you'd have to do.

[maok]

Like I said above, this will be an alt-coin and a hard fork for bitcoin. You'd have to find someone to write the code for you and then convince people to switch to your fork. It seems unlikely people will do so but the new alt-million-year coin would not be bitcoin. Without some clear need it is highly unlikely the developers will code this for you.

All that said, the code itself seems simple based on your description so it would be pretty easy to implement. The issue is convincing people to switch to your alt-coin. I believe it would take a very good reason to get people to do so. Selling it would be something you'd have to do.

Current Bitcoin miners would most likely accept this change because after 2020 they already won't be in mining only for reward but mainly for transaction fees. Its in their best interest to mine as much time as possible for fees and for reward and this change gives them more time after each decrease to do just that. Once the code is written and some developer will think this is a good idea, it will sell for itself to the miners, and it'll sell itself to the adopters that wish for Bitcoin to succeed in the long term. It'll also make Bitcoin truly the gold standard. It'll also make the current developers prove that they've grown up and implement true changes beyond fixing the code at the superficial level.

I don't care about altcoins, I'm an Bitcoin adopter coming with an idea, I wish to see pro cons arguments not suggestions to make a new altcoin. Probably the code is simple but the implications are big so that must also be taken into consideration. We need to grow up, take the initial idea of Satoshi keep all the principles like preventing double spending, limited supply, medium of exchange, decentralization, POW instead of trust, and build alongside a better future Bitcoin protocol while we still can. I don't think my proposal breaks any of these principles and it benefits everybody involved in Bitcoin in the long term. Once we adopt this gold standard we can be sure Bitcoin will be here to stay for good and its value/price will continue to rise and the incentive to mine will be even stronger because not only you'll mine for reward but also for transaction fees and you'll do that for a prolonged time which is not only in your favor but also to the regular adopters who wish for Bitcoin to succeed in the long run, they'll know that Bitcoin is the gold standard and it will be here for a long long time so like I said the network effect will grow exponentially.

This proposal is based on psychological human factor in which the future generations need to know that they can search for something and get a reward if they'll find it and searching for Bitcoin will give its value and will also assure us that Bitcoin will be considered valuable in the future as well. Time and timing is everything, this change needs to be considered at the next decrease in 2016 otherwise its futile. I'm sure the idea will sell itself once more developers/miners read it, in my mind it makes alot of sense but thats why I make it public so that anyone can come with a con or pro argument.(Hint: I'm 99% sure this won't get implemented and no developer will take the time to really understand it, but really putting it out there is all I can/wish to do)

P.S. Excerpt from Satoshi's whitepaper 12. Conclusions: "Any needed rules and incentives can be enforced with this consensus mechanism.(CPU Power)" He knew that new rules will be added and as long as it doesn't break the basic principles and if the incentives are there we can make it happen, if not then not, but I'm against doing nothing instead of implementing some huge incentive to us like adopting the gold standard which will make Bitcoin and its adopters more empowered as the search for Bitcoin will continue for a long time, giving Bitcoin a value for that longer, in return giving those who mine/hold/use Bitcoin a better perspective over time.

[DeathAndTaxes]

You can't make a breaking change to Bitcoin all you can do is fork it.  "Change" would imply you could somehow shutdown the original network and you can't.   There will never be a consensus on changing something as fundamental as the minting rate so it probably will never be (successfully) changed.  A fork can be created and then either the original network or the fork (or both) will survive.  The risk of a split network means that the only hard forks to the Bitcoin protocol will be one which have widespread consensus support and even that will be a slow process (case in point P2SH).

[maok]

You make a breaking change to Bitcoin all you can do is fork it.  "Change" would imply you could somehow shutdown the original network and you can't.   There will never be a consensus on changing something as fundamental as the minting rate so it probably will never be (successfully) changed.  A fork can be created and then either the original network or the fork (or both) will survive.  The risk of a split network means that the only hard forks to the Bitcoin protocol will be one which have widespread consensus support and even that will be a slow process (case in point P2SH).

I've added a poll and I'll be curious to see the results. Please vote and state your disagreement/support of this potential fork at the end of 2016.

[maok]

This could also have an effect on the blockchain size over time as the main block could verify the in between no-reward-blocks and include ONLY its headers into the blockchain. Therefore the no-reward-blocks will be used only for confirming transactions and wouldn't need to be fully included in the blockchain thus helping the reduction of the blockchain by 50% only in the first cycle of ~8 years.

Once the next main block will be discovered it will verify the previous no-reward-blocks and only include its headers into the blockchain. How's that for an extra needed feature that this change of expanding in time the bitcoin search could bring ?

[R2D221]

Your poll options are very confusing and misleading. They seem to imply that either your proposal will work and “save” Bitcoin, or that it will fail and an altcoin will take its place.

For it to be a fair poll, you should just include the options “I agree” / “I disagree”.

[DannyHamilton]

None of my reasons are in your list of options, therefore I can't vote in your poll.

[maok]

None of my reasons are in your list of options, therefore I can't vote in your poll.

If you disagree there's an option "I disagree, I'll offer my reasons below". At the moment there's 4 votes for disagree, but with no reason provided, so I don't know what conclusions to draw.
If you agree and have other reasons than those in the poll then please comment on what part you agree. I thought this is a proposal for gold standard of Bitcoin, meaning for long term survival and thats the 2nd option in the poll.

[maok]

Your poll options are very confusing and misleading. They seem to imply that either your proposal will work and “save” Bitcoin, or that it will fail and an altcoin will take its place.

For it to be a fair poll, you should just include the options “I agree” / “I disagree”.

Yes those options are included, they are 1st and 2nd, and I also included some detailed options in the poll because I wanted to know the miners and developers votes. I asked those who disagree to provide reasons. This proposal is not for saving Bitcoin but rather to extend its monetary value as the digital Gold standard.

There's currently a draft by Pieter Wuille( https://github.com/bitcoin/bips/blob/master/bip-0042.mediawiki) which propose a similar goal by making Bitcoin supply finite and I believe this change should not only accomplish that but also stabilize Bitcoin supply in such a way that it becomes the go-to Gold standard of digital era. Its hard to see Bitcoin fail for technical reasons(maybe blockchain size which this change could also solve) but rather for psychological reasons hence why I consider this change to be of importance. There's 2+ years till the next reward drop so its enough time for devs/miners/adopters to see if they think this is needed or not, but saying that we're afraid of a soft/hard fork is like blocking all progress of Bitcoin and yes some altcoins will have some desirable features which will leave Bitcoin behind if we'll always be afraid of changes. Adopting the gold standard by slowing down the reward halving is benefiting all of us in the long term.

[R2D221]

(from https://github.com/bitcoin/bips/blob/master/bip-0042.mediawiki)

To combat this, this document proposes a controversial change: making Bitcoin's monetary supply finite.

Clearly I'm missing something, because it was my understanding that Bitcoin's supply was finite and deflationary by design.

[DeathAndTaxes]

(from https://github.com/bitcoin/bips/blob/master/bip-0042.mediawiki)

To combat this, this document proposes a controversial change: making Bitcoin's monetary supply finite.

Clearly I'm missing something, because it was my understanding that Bitcoin's supply was finite and deflationary by design.

No you didn't missing anything.  The BIP is written tongue in cheek.  Yes Satoshi always intended the supply to be limited at ~21M BTC however the code prior to v0.9.2 would have resulted in infinite coins.  This has been known for many years but changing it hasn't been seen as a high priority as the bug wouldn't take effect until ~2140.  The code has been fixed as of v0.9.2.

https://github.com/bitcoin/bitcoin/commit/c5a9d2ca9e3234db9687c8cbec4b5b93ec161190#diff-7ec3c68a81efff79b6ca22ac1f1eabba

Code:

 int64_t GetBlockValue(int nHeight, int64_t nFees)
  {
      int64_t nSubsidy = 50 * COIN;
 +    int halvings = nHeight / Params().SubsidyHalvingInterval();
 +
 +    // Force block reward to zero when right shift is undefined.
 +    if (halvings >= 64)
 +        return nFees;
  
      // Subsidy is cut in half every 210,000 blocks which will occur approximately every 4 years.
 -    nSubsidy >>= (nHeight / Params().SubsidyHalvingInterval());
 +    nSubsidy >>= halvings;
  
      return nSubsidy + nFees;
  }

[R2D221]

(from https://github.com/bitcoin/bips/blob/master/bip-0042.mediawiki)

To combat this, this document proposes a controversial change: making Bitcoin's monetary supply finite.

Clearly I'm missing something, because it was my understanding that Bitcoin's supply was finite and deflationary by design.

No your missing anything.  The BIP is written tongue in cheek.

Now I'm more confused. maok's post seem to take that BIP seriously...

[DeathAndTaxes]

(from https://github.com/bitcoin/bips/blob/master/bip-0042.mediawiki)

To combat this, this document proposes a controversial change: making Bitcoin's monetary supply finite.

Clearly I'm missing something, because it was my understanding that Bitcoin's supply was finite and deflationary by design.

No your missing anything.  The BIP is written tongue in cheek.

Now I'm more confused. maok's post seem to take that BIP seriously...

I think he did, but he missed the dry humor. The "controversial change" was sarcasm.  Note the date of the BIP.  It really is a bug and it eventually needed to be fixed but the BIP was written as a joke.  It has been fixed in v0.9.2.

[maok]

(from https://github.com/bitcoin/bips/blob/master/bip-0042.mediawiki)

To combat this, this document proposes a controversial change: making Bitcoin's monetary supply finite.

Clearly I'm missing something, because it was my understanding that Bitcoin's supply was finite and deflationary by design.

No your missing anything.  The BIP is written tongue in cheek.

Now I'm more confused. maok's post seem to take that BIP seriously...

I think he did, but he missed the dry humor. The "controversial change" was sarcasm.  Note the date of the BIP.  It really is a bug and it eventually needed to be fixed but the BIP was written as a joke.  It has been fixed in v0.9.2.

Ha, the author said it was an easy fix but I really didn't get the dark joke. That example was bad but still, the physiological aspect needs to be considered, hopefully those who vote disagree also take a minute to give a reason, maybe this isn't the best proposal but surely there must be 1 reason for not agreeing with it...