Topic: Alternative distribution of initial coins - page 2. (Read 1646 times)

Ok then 99.5% won't mine.  Network security would fall massively and it would be trivial to double spend the network.  The "coins" only have value because they have utility (impossible to counterfeit, and very difficult to "reverse" once confirmed).  No utility = no value and the price rapidly crashes to zero (this would have a compounding effect as not only would the compensation paid to miners drop 99% in BTC terms the falling exchange rate would mean in USD/EUR terms the compensation would fall 99.99%+).

Satoshi always intended "minting" to not only solve the initial distribution problem but to acts as a subsidy.  The subsidy keeps fees low while the network grows.  Another way to look at it is right now fees make up about 1% of total miner compensation.  This means everything else being equal to purchase the same amount of security tx volume would either need to be 100x as high or the average fee per tx would need to be 100x as high.   Neither of those are realistic.  Even with rapid organic growth we are probably many years from such tx volume, and raising fees to be $5 to $10 per tx would cripple utility and adoption.  The (declining) subsidy gives the network time to grow the the volume levels where fees would make it self sufficient.  The subsidy "buys" 99%+ of the security that is available today.  You can't remove 99% of the compensation to miners and expect anything other than security falling 99% (or more).


Actually as proposed it would be very easy to game.  The subsidy protects the network but it also serves the purpose of being hard to "game".  Please describe in exact details how you would distribute 25 BTC "randomly" in such a manner that it would be fair.  Hint: if you could solve that problem (sybil attack) you wouldn't need mining at all.  Using the same logic nodes would simply determine the fairest sequence of transactions (i.e. instant confirmations with no cost, delay, or fraud).

This is an even worse "solution" security of the network would fall off massively or miners would simply demand much higher fees in compensation.  Miners could still game this by including all "real" high fee txs and then filling the block with tx back to addresses controlled by the miner (with high fees = going right back to miner anyways).  Miners could set the reward to be whatever they wanted possibly even higher than the current reward.  Of course lower fee and free tx would never be included in a block, you just created a penalty that punishes miners for including those txs (by directly lowering their gross revenue).

Does that automaticly make it a bad idea?


The fees should be incentive enough, if they couldn't serve that purpose Bitcoin will have a problem in the future too


They are going to a random address in the last block, and I already explained how one could prevent users from creating dummy transactions to gain an advantage, so 'mining addresses' will be useless.

Block rewards were never intended to be a lottery.  Amongst other reasons, it is an incentive for miners to do the work required to secure the network.

And if the 'random reward' was sent to, what-- random addresses?  Everyone would be mining addresses.

If the 'random reward' went to random nodes-- those with the resources would have thousands of virtualized nodes or giant RaspberryPI farms..

You will get enough fees to cover those costs, and still make a profit. What more do you need?


Please read my idea more careful, because it explicitly states it will be equal (or less).


They will only be punished if you compare this hypothetical coin to how Bitcoin works. But Bitcoin punishes a much larger group: the actual users, people without mining rigs. They also invest their time and effort (for example in promoting it), you want to punish them?


My view of fair is random distribution among the largest group of people, while still letting miners make a profit. Yours (as a miner) might be a bit different, thats no surprise.

In the whitepaper it sounds more like an issue with trust. I dont think this was about fairness, but about an online payment system that does not rely on trust of a 3rd party.


No. I dont even see where this can be fair. If I invest the majority of (electrical) energy and hashing power, how is it fair that I dont get the majority of the reward? I assume here that the blockreward is still higher than the tx fee reward. What you are proposing has nothing to do with fairness. Everyone can "do less", but not everyone can do more. It would be just randomness who gets paid so everyone would do as little as possible while still beeing eligable to get the reward. However you want to determine that. 1 transaction every block? Or does each count? So the more transactions the higher my chance? Wouldnt that be the exact same thing (more money = more btc) you want to stop with your solution?



The "big guys" not only use this network they protect it. The more hashingpower the harder is an attack thus the higher is the value of BTC. Those who put their time and money into this make it what it is, yet you want to punish them? One could easily argue the other way around and propose that unless you have at least x TH/s you are not allowed to use the network since you are not contributing in a reasonable fashion to its safety.

Also those you call big are mostly big because they started early. They took a risk in supporting bitcoin and after a long time the coins are worth something. Why is that not fair? You could have been here. I could have been here. I didnt think bitcoin would work, because I didnt invest enough time in understanding what bitcoin is. "The big guys" did and they found flaws and helped correcting them. They contributed time, money, electricity, know-how.


I think you have a very problematic understanding of "fair".

They will, after all 21M BTC are mined.

They would mine for the fees.

Basically no one would mine then.

This is why the difficulty variable exists. The block rewards cannot be more fair than they are now. Find a block, push transactions, get a reward

Satoshi decided to distribute new coins to the miners, and back then that was a fair method to pick a random stranger, so I understand the logic behind it. But nowadays these block rewards don't go to random users anymore, they go to the people who are wealthy enough to own a significant share of the hashing power. Essentially it's making the rich people richer, and that's the exact opposite of what he originally envisioned I suppose?

Wouldn't it be much more fair to give miners only the TX-fees, and pay a reward to some random stranger (transaction) in that block? That way the initial distribution of coins is garantueed to be fair for everyone, since the coins are going to the actual users of the network (which includes also 'the poor'), instead of the big guys.

The way this could work is that the random tx is picked based on the block hash (similar to how the dice sites work). So a miner never has influence on who receives the reward, unless they withhold valid blocks to influence the outcome, which gives them a major disadvantage compared to competing miners (who will publish the first block they find).

And to discourage users from spamming the chain with dummy transactions, the reward should be equal (or lower) than the total amount of fees paid in the block. This causes their EV (expected value) to stay the same, rendering spam useless. This also discourages miners from including only transactions from friends, since the benefit of sharing the reward will be lower than the profit they could have gained from the extra fees.  

At first sight such a scheme would be very simple to implement, and much more fair. The only downside I can think of right now is that the coins will be distributed more slowly than Bitcoin does right now. And to bootstrap the network there have to be one (or a couple) of empty blocks where the miner gets a reward. No big deal.

Could something like this work in practice? I have a feeling Im overlooking something fundamental, because it sounds to good (and simple) to be true, but I cant figure out where the problem lies in this approach.