[CLOSED] StakeCoin Bounty

[ripper234]

Update - after 1 year, nobody sent any bounties at all except my initial 1 BTC.
I have decided to sent this 1 BTC to SunnyKing for his innovation in creating PPCoin, and close this bounty pool.


This is a bounty-collecting thread for the first alt-coin to support some "good" form of Proof of Stake.

Rules:

1. The coin should either be based on Bitcoin or Litecoin (scrypt), with an addition of Proof Of Stake. No other fancy changes, just PoS.
2. The coin must combine Proof of Work with Proof of Stake.
3. Different PoS methods from the wiki (or others) should be evaluated, and the "best" one chosen. I currently favor Meni's version simply because I trust him, but I haven't done the technical evaluation myself ... if convincing arguments can be made for another implementation, that's acceptable.
4. The coin should be fair. The definition of "Fair" is subjective, so I will just use my definition of "Fair" (I'm leaving the exact definition unspecified a.t.m).
5. The coin must abide by the Alt-Chain Release RFC. TL;DR - don't premine, make it open source, announce it in advance. Read the RFC.
6. I am nominating myself as the bounty collector. (the gist of) these terms apply. If you disagree, you may nominate another bounty collector.
7. This is the bounty address: 19k9uxrye1kj2UdS5xH3eMBV5RjDxLiRig
8. Donated 1 BTC.

Edit 1
9. This can be implemented as a fork or not. Added a requirement that 0.01% of Bitcoin hash power starts using this modified client, regardless of whether if it's a fork or not. For Litecoin, 1% is required.

[maaku]

Why a new coin? PoS requires no block chain or network protocol changes. Or rather, it is a proper superset of the current protocol rules that includes new rules for choosing checkpoint blocks.

Why not implement PoS directly on top of Bitcoin (or Litecoin) with a modified client?

[ripper234]

PoS requires no block chain or network protocol changes.

Are you sure about that?

[ripper234]

P.S.

If PoS is implemented in an existing cryptocoin, that counts.

[Meni Rosenfeld]

I appreciate the initiative but I think it's a bit premature for this.

[ripper234]

I appreciate the initiative but I think it's a bit premature for this.

Threads can wait for a long time, and addresses can collect coins.
Even if it takes a year to get there...

Technically the bounty conditions mean that if not claimed in a year, the coins will be donated to another bitcoin project ... but if I see more interest in a year I'll consider postponing the deadline.

[ElectricMucus]

Some principal questions:
If the amount of the coins I hoard increases my income, why would I ever spend them?
If I need to acquire coins in order to get income why would I bother with the currency in the first place?

While there may or may not be valid reason to do this for security it is absolutely senseless from an economical perspective.

[ripper234]

Some principal questions:
If the amount of the coins I hoard increases my income, why would I ever spend them?
If I need to acquire coins in order to get income why would I bother with the currency in the first place?

While there may or may not be valid reason to do this for security it is absolutely senseless from an economical perspective.

Look at it this way: If you want to generate StakeCoin, you can do one of several things:

1. You can buy some, and invest them (e.g. lend them for X% weekly interest).
2. You can buy and run mining rigs, and pay for electricity, cooling and operation.
3. You can buy some coins, and "lock them into the blockchain". This helps the network security, and as a reward, you get to generate new coins.

Why is option 3 so bad, compared to 1 and 2?
This option enabled people to participate in "the mining game" directly, while in other coins you have to either

A) Dedicate large quantities of your time to understand how mining works, download miners, optimize hardware, etc... this is for specialists, normal people won't do it.
B) Mine-by-proxy - you can buy mining bonds ... but then you're trusting a 3rd party, who might be corrupt/corruptible.

StakeCoin is about allowing every "common Joe" to mine-by-proxy ... without a proxy.

[maaku]

PoS requires no block chain or network protocol changes.

Are you sure about that?

Yes. In a sense this is less disruptive than P2SH, since it doesn't involve a backwards-incompatible change to the interpretation of the block chain structure. It's essentially an overlay network on top of bitcoin for negotiating checkpoints (I'm assuming we're talking about Mini's proposal).

There will be a hard-fork as soon as there is disagreement over a block, however. You'd better have near-unanimous mining pool support before you turn it on...

EDIT: Your SE question is a misquote of me. PoS does require a hard-fork no matter how you slice it, but that's simply due to PoS working as advertised, not because of a change to the blockchain structure. I simply maintain that it would be a diversion to create an alt coin specifically for this purpose, when it could be developed as a patch against the mainline clients of Bitcoin or Litecoin (or Freicoin), and tried out on their test nets.

[ripper234]

PoS requires no block chain or network protocol changes.

Are you sure about that?

Yes. In a sense this is less disruptive than P2SH, since it doesn't involve a backwards-incompatible change to the interpretation of the block chain structure. It's essentially an overlay network on top of bitcoin for negotiating checkpoints (I'm assuming we're talking about Mini's proposal).

There will be a hard-fork as soon as there is disagreement over a block, however. You'd better have near-unanimous mining pool support before you turn it on...

Hmm.
I'm unsure what is the correct way to proceed. If 0.01% of Bitcoin hash power starts using this modified client, I'll accept the bounty (added to OP), regardless of whether if it's an altchain or not. For Litecoin, 1% is required.

[ElectricMucus]

Some principal questions:
If the amount of the coins I hoard increases my income, why would I ever spend them?
If I need to acquire coins in order to get income why would I bother with the currency in the first place?

While there may or may not be valid reason to do this for security it is absolutely senseless from an economical perspective.

Look at it this way: If you want to generate StakeCoin, you can do one of several things:

1. You can buy some, and invest them (e.g. lend them for X% weekly interest).
2. You can buy and run mining rigs, and pay for electricity, cooling and operation.
3. You can buy some coins, and "lock them into the blockchain". This helps the network security, and as a reward, you get to generate new coins.

Why is option 3 so bad, compared to 1 and 2?
This option enabled people to participate in "the mining game" directly, while in other coins you have to either

A) Dedicate large quantities of your time to understand how mining works, download miners, optimize hardware, etc... this is for specialists, normal people won't do it.
B) Mine-by-proxy - you can buy mining bonds ... but then you're trusting a 3rd party, who might be corrupt/corruptible.

StakeCoin is about allowing every "common Joe" to mine-by-proxy ... without a proxy.

I can't see how that is related to the issues I brought up. I recognize some people want a mechanism which enables them the charging of interest. But I consider interest a harmful concept in a limited base. Worse the concept does amplify the early adopter advantage issue. Those with many coins will get even more, to the point where joining isn't simply worth it anymore for latecomers.

I would even consider the idea itself harmful btw, but I don't wanna derail the thread.

[maaku]

Some principal questions:
If the amount of the coins I hoard increases my income, why would I ever spend them?
If I need to acquire coins in order to get income why would I bother with the currency in the first place?

While there may or may not be valid reason to do this for security it is absolutely senseless from an economical perspective.

I can't see how that is related to the issues I brought up. I recognize some people want a mechanism which enables them the charging of interest. But I consider interest a harmful concept in a limited base. Worse the concept does amplify the early adopter advantage issue. Those with many coins will get even more, to the point where joining isn't simply worth it anymore for latecomers.

I would even consider the idea itself harmful btw, but I don't wanna derail the thread.

I'm not sure what relation, if any, that has to do with proof-of-stake. Could you elaborate?

Proof-of-stake is a mechanism for negotiating checkpoints weighted by bitcoin balances. Checkpoints are way of mitigating attacks on the network and have nothing to do with income.

[ElectricMucus]

It doesn't really matter where the income is coming from, if it is anything which can be expressed as compound interest it is bad IMO.

[maaku]

It doesn't really matter where the income is coming from, if it is anything which can be expressed as compound interest it is bad IMO.

What compound interest?

[ElectricMucus]

The more stakecoin you have the higher the reward the more you accumulate the more stakecoin you have, etc...

[maaku]

The more stakecoin you have the higher the reward the more you accumulate the more stakecoin you have, etc...

Stakeholders are not rewarded with coins, just the ability to select checkpoints. I recommend reading the wiki page on the subject: https://en.bitcoin.it/wiki/Proof_of_Stake.

[NASDAQEnema]

The dumbest theory I ever saw: Trust the rich to protect the network.

From the guy who said litecoin was irrelevant. So irrelevant that 2 exchanges are going up in response to the btc-e hack.

The rich are rich because of their connections and backroom deals not because of their holdings.

NO FEDERAL RESERVE (trusted nodes) IN THE CRYPTOCOIN WORLD!

Go away scammers.

[Etlase2]

NO FEDERAL RESERVE (trusted nodes) IN THE CRYPTOCOIN WORLD!

You kind of sound like an OWS protestor.

The rich are rich because of their connections and backroom deals not because of their holdings.

Well, one could make the argument that most of the plutocracy in place today has root in the Rothschilds/gold moneylending industry that eventually turned into central banking. That happened because a super scarce resource (gold) was easily controlled.

Who knows how different the world could be today if money was honest. Bitcoin is not honest money and would likely follow the same path as gold were it to become a significant force in the world.

The dumbest theory I ever saw: Trust the rich to protect the network.

If you have honest money, the wealth of the world will be distributed far more equally than it is today. Perhaps we will lose some of our pettiness if that ever becomes the case.

[ripper234]

Some principal questions:
If the amount of the coins I hoard increases my income, why would I ever spend them?
If I need to acquire coins in order to get income why would I bother with the currency in the first place?

While there may or may not be valid reason to do this for security it is absolutely senseless from an economical perspective.

Look at it this way: If you want to generate StakeCoin, you can do one of several things:

1. You can buy some, and invest them (e.g. lend them for X% weekly interest).
2. You can buy and run mining rigs, and pay for electricity, cooling and operation.
3. You can buy some coins, and "lock them into the blockchain". This helps the network security, and as a reward, you get to generate new coins.

Why is option 3 so bad, compared to 1 and 2?
This option enabled people to participate in "the mining game" directly, while in other coins you have to either

A) Dedicate large quantities of your time to understand how mining works, download miners, optimize hardware, etc... this is for specialists, normal people won't do it.
B) Mine-by-proxy - you can buy mining bonds ... but then you're trusting a 3rd party, who might be corrupt/corruptible.

StakeCoin is about allowing every "common Joe" to mine-by-proxy ... without a proxy.

I can't see how that is related to the issues I brought up. I recognize some people want a mechanism which enables them the charging of interest. But I consider interest a harmful concept in a limited base. Worse the concept does amplify the early adopter advantage issue. Those with many coins will get even more, to the point where joining isn't simply worth it anymore for latecomers.

I would even consider the idea itself harmful btw, but I don't wanna derail the thread.

1. I don't consider interest harmful. There will always be an incentive for people for lend their coins for interest, rather the storing them under the mattress, regardless of protocol rules. It's just the way the world works.

If the amount of the coins I hoard increases my income, why would I ever spend them?
If I need to acquire coins in order to get income why would I bother with the currency in the first place?

This is true in Bitcoin, Litecoin, Gold, Foocoin. The richer you are, the richer you'll get, and no cryptocurrency is going to change that. DemurageCoin is not a viable solution. So ... there's no use complaining about it. If in StakeCoin this is part of the protocol, then that's fine. The amount of interest, however, shouldn't be a hard-coded number, but rather negotiable by the market somehow - not sure how to design that exactly.

You don't "need to acquire coins in order to get income" - you can sell goods & services to get an income, you can have your employer pay you salary in this coin, there are plenty of other ways to get the income.

[ripper234]

The more stakecoin you have the higher the reward the more you accumulate the more stakecoin you have, etc...

Stakeholders are not rewarded with coins, just the ability to select checkpoints. I recommend reading the wiki page on the subject: https://en.bitcoin.it/wiki/Proof_of_Stake.

The wiki is just the start of the discussion.

I don't have time to re-read it now, but I believe StakeCoin should have some incentive for coin owners that participate in the signing process, much like miners are incentivized.