So lets check everything and get everyone on the same page.
How long before SatoshiNakamoto1 is found?
Are we in agreement that the wallet needs to have 500 SPR balance before commencing its search?
The 500 SPR needs to be sent from SatoshiNakamoto1, with details of the block published?
We are going to keep building up a BTC fund that is aimed at being around $1m, but it will just keep growing. Some of the coinbase mining rewards will be sent to keep building up this fund, say 1% of SPR?
We will need an SPR > BTC exchange to happen, plus muti-sig escrow.
Anything else?
It turns out that this has an unexpected impact on typical game theory not entirely unrelated to lotteries.
Remember, we are not asking people to pay to participate, but to provide collateral to prevent botnets (we don't want to be the cause of a cyber crime wave).
In typical lotteries, people buy a ticket and that payment is used to build up the prize fund; to distribute money to the lottery organisers; and also for specific causes such as distribution to charities.
We are not asking anyone to pay to buy a ticket, so there are no funds to be built up from ticket sales and the organisers, well there are none who will be paid (except perhaps to those who provide the escrow services).
The interesting development on lottery game theory is the impact on Bitcoin.
With traditional lotteries, as the prize fund builds up, more people are attracted to play. The bigger the sum the more people want to participate and the bigger the amounts they are prepared to spend on buying tickets.
Now, if we request that 500 SPR is used to prevent sybil attacks and to keep a reasonable playing field, then that will obviously be good for SPR.
However, as the value of SPR increases, the value of the coinbase increases. The as yet unfinished rules of this van gen prize is that we need to buy BTC from a share of the SPR coinbase - lets say 1% or it could be more.
Depending on how long it takes to find SatoshiNakamoto1, we could be buying Bitcoins for years.
This is where things are similar to the psychology of lottery game theory.
During the early stages, we won't make any noticeable impact on SPR price, or the price of Bitcoin. However, as the payout increases from 5BTC, 10BTC, 20BTC, 40BTC, 80BTC, 160BTC, 320BTC............1.3m BTC the amount of people participating snowballs.
At current prices, 1.3m BTC is around $370m. But if we end up putting buying pressure on BTC, that amount could be far higher, over $1bn. This would mean that the market cap of Bitcoin itself would escalate, drawing in more people.
This, on the face of it, would put a risk on Bitcoin collapsing if the successful person who wins all that BTC decides he or she wants to 100% cash out. This is the real Satoshi problem. He has millions of BTC, so much that he can't cash them all out.
In reality, the seller of over 1m BTC would have to cash out slowly, or by the time they get their 1.3m BTC, there would have been so much interest created in Bitcoin and the value would have gone up so much that it becomes mainstream and the new Bitcoin millionaire / Billionaire would not need to cash out of BTC.
I guess this is like people in Canada only being allowed to buy lottery tickets in America. People from around the world would have to buy Canadian dollars, from which they can then buy lottery tickets. As the prize fund grows, there would be buying pressure on the American dollar causing it to increase in value.
Hmm, very interesting.
It would probably take SPR a while to get some early traction on this, but once it hits a certain point (not quite the tipping point), the network effect should start to appear.
What if SPR gets too valuable for people and the 500 SPR is a barrier?
Well, I guess pools would form. It would be difficult to reduce the 500 SPR, but not impossible. This would allow existing funds to be set free and people can choose to use their funds to cash out or create more van gen nodes.
@georgem, I think you're right, there would be a point at which ASICs would be built that do nothing but search for Satoshi. If this happens and thousands of people buy them, the confidence in the security of Bitcoin will go up, as people will see how secure private keys really are. You'll have the whole world searching for one private key with a huge amount of value.
If someone finds SatoshiNakamoto1, well we also have 2, 3,4.....to 9.
We need a PhD candidate to pick this up.
What a highly interesting side show to the main events which are about to unfold. But luckily, we have the raw ingredients to make this happen now. So we might as well let the pressure cooker start pretty soon.
edit
@Georgem (and everyone else I guess) - can we allocate 30% of mining rewards to build up a fund and have that reducing down to, say, 1% over a period of x months?
This would kick off the BTC bounty, but release funds to servicenodes as they come on stream. The value of SPR should also increase meaning that servicenodes would have funds to pay for any hosting or home bandwidth costs.
), then you need to understand a little more about private keys and how hard they are to find.
