Topic: Altcoin Final Editing and Release Process (Read 871 times)

Thanks for the help I did not about the decimal point being in the middle and that has some big implications down the road so I really appreciate it.  Not to mention you've explained a lot of the technical aspects of Bitcoin to me in a way that was easy to understand.  I do still think your economics is slightly off  though  .  Thanks a bundle!

Well, I asked about the decimal point, because Bitcoin technically doesn't even have one.  Satoshi decided to have the client display the wallet's total value to the user, with a decimal point exactly in the middle of the 64 bit integer (32 bits to the left, 32 bits to the right) but in the protocol all value is in satoshis.  Hindsight being 20/20, there is much merit in not matching that decision.  Perhaps having a coinbase reward that starts with 1776 of the atomic unit, and having the client display the decimal point to the hundredths, is a fair idea regarding a cryptocurrency that is designed without a maximum monetary base limit like Bitcoin.  This would grant much room for growth in the issued currency before the overflow of the value variable became a threat, as it would take centuries with a 64 bit integer.

The total quantity of coins is insignificant from an economic perspective, all that matters is their ratio of production, so I chose 17.76 simply because it works just as well as any other number, but has a symbolic purpose.  I want every possible part of the coin to have purpose, even if its purpose is simply symbolic.  The genesis block's message is currently a re-iteration of the first lines of the Declaration of Independence, but replacing the original word "governments" with "money and banking", which follows the theme of secession.  This is simply a gimmick to attract attention from more mainstream sources as the powers that be will have a hard time opposing this theme, not to mention that crypto-currencies are in fact a secession from central banking so the syllogism is apt. 

Regarding placement of the decimal point, there were only two issues I considered, although I may be missing a technical issue.  First, because the coin is trying to maintain stable value after its first few decades of use, users would not have to constantly divide the coin into smaller portions over time, so I did not have to worry about the economy outgrowing the limit of the coin's divisibility.  Secondly, I had to decide what value an individual coin would have if it became adopted as a major currency.  This has no economic effects, but may speed or slow its adoption by certain groups based on biases towards high or low values for a single unit of currency.  I chose a number that would maintain a much larger value per unit of currency than the current dollar scenario, because I thought it would be more appealing to fans of existing crypto-currencies and the initial push is the most important stage for a crypto-currency. 

If there are other problems associated with the decimal point I am unaware of them.

5 days was chosen because it made the math simpler, and the programmer I hired advised me to change the difficulty target more often than once every 1024 blocks.  I had originally wanted both to change after 2 weeks, but with a faster difficulty re-targeting 5 days seemed to offer basically the same function, and made calculations easier so I went for that.  I understand your argument about the orphaned blocks and it probably would be worth changing, seeing as I chose 5 days only for ease of calculation, I will look into this in more detail.

Both parameters are calculated separately and added together after they have been calculated.  One part of the reward the 17.76, which will halve every four years, but gradually.  The other is the 3% annual growth which will increase the coin supply once it has a larger total effect than the original 17.76 decreasing reward parameter.  So initially the reward will be dropping, but after a period of time it will begin a slow, but steady increase.  I think your statement was correct as I understood it.

So the coinbase reward will halve every four years, but (in effect) double roughly every 27 years?

What is the significance of starting the coinbase at 17.76?  It's obviously not arbitrary.  Also, is your decimal place going to be in the same place that Satoshi placed his?  That was an arbitrary choice on his part, and may not be what you wish to do. 

Upon further reflection (beyond our PM conversation) I think that a 5 day coinbase adjustment period might be too quick because it would significantly increase the odds that a blockchain split & realignment would occur during a coinbase change, and therefore result in greater numbers of orphaned blocks as a consequence of a miner releasing a block with the incorrect coinbase reward.  Furthermore, Bitcoin currently readjusts the difficulty target every 1024 blocks, or roughly every 2 weeks.  Perhaps this point would be a better shortened coinbase cycle as well? 

I have the code for an alt-coin, named Utilcoin, and need help finalizing my changes, but I’m not a programmer, I’ve hired others to do the work so far.  I need to know if the changes I have made will cause technical problems down the road, for example some changes may cause storage issues within the blockchain or other things like that.  Let’s get to the features in question.

Utilcoin has two parameters controlling the block reward, they are two functions that add together to form the whole reward, furthermore this reward is calculated once every 5 days, not once every 4 years to make changes more gradual (this may cause issues).  The first function is simply the initial mining reward, 17.76, compounded at a regressive rate once every 5 days so that it will approximately halve after 4 years.  This means it exhibits a halving of the mining reward every 4 years, just like Bitcoin, but instead of it being a sudden drop, it is a gradual transition.  The second parameter is also compounded every 5 days, but it creates a 3% increase in the total supply of coins in circulation every year.  For example if the total supply of Utilcoin were 1 million this parameter would cause the production of 30,000 coins during the year.  

The point of this setup is to have two distinct phases during the coin’s lifespan, the initial phase and the long-term phase.  During the initial phase the block reward will be rapidly decreasing, this attracts initial adopters as they can gain a large proportion of the total supply.  After a number of years, the original reward, 17.76, which halves every 4 years will become negligible and the second phase will begin.  During the second phase, the rate of coin production is kept stable at 3%.

Why make these changes?  Two reasons, it increases network security, and makes Utilcoin a more efficient medium of exchange than Bitcoin.  It is more efficient than Bitcoin, because, as proved by Ludwig Von Mises in his essay “Economic Calculation in the Socialist Commonwealth” Ch 2. profit and loss are the only means of rational economic calculation.  Furthermore he goes on to say that profit and loss are calculated in terms of money.  Mises then hints that fluctuations in the price of money disturb profit and loss calculation because it is used as the unit of measure (if you want quotes ask and I will post exact quotes).  To put another way, if we were inventing a way to measure distance, it would be nonsensical to use a unit measurement that fluctuated, measurements quoted in a non-constant unit are necessarily inaccurate.  In the same way, if we are trying to rationally calculate economic productivity, the only method to do so is is by calculating profit and loss, which uses as its unit of measure money.  If the value of money fluctuates, this will necessarily cause losses of economic production.  The price of money is determined indirectly meaning that money's value is derived from the goods it can be used to purchase, in order to maintain stable value, the production of money must rise in direct proportion to increases in total economic wealth.

Bitcoin will eventually have a rate of money production of approximately 0, this is only ideal if there is no economic growth.  Humans are rational beings, therefore under the assumption that they use voluntary methods of production we can expect constant growth, as rational beings cannot act against their interest by definition.  This means Bitcoin’s long term rate of coin creation will cause unnecessary losses equal to the rate of total economic growth by making activities under that level create nominal losses, when in fact they produce “real” growth.

I need to know if the extra compounding, more gradual halving, will cause technical issues.  This part is not necessary, and I don’t want to release it if it will cause issues, as I will probably have to hire someone again to do that, and I don’t want to waste money.  Also if anyone can tell me how to put a zip file somewhere accessible on the internet that would be great.  I tried figuring out github, and can use some basic features, but I don’t know how to get the code for an entire crypto-currency up there and with all the files the task seems daunting.  Any and all help is appreciated.  I am confident in the idea, but need help making it a reality.