Information Bulletin
Background:CannabisCoin is an unusual hybrid, marrying cryptocurrency with an attempt to stream cheaper/free medication to cannabis patients.
In some respects this leads to conflicting requirements from our potential user base and some misunderstanding, which we will try to alleviate here and henceforth.
On the one hand the primary motivation for the core team is making life easier for cannabis patients. From conception at a time when
Dogecoin was young and GPU mining was but a rumor, the intent was for patients to "mine their meds" while using their computers. A great idea but ASICs and insta-mining quickly overran it. Switching to the X11 algorithm was an attempted workaround but we all know the explosion of altcoins and veritable hashing arms race that took place then.
At the same time the team seeks to reduce the environmental footprint of providing medicinal cannabis and it has been to this end that much of the experimental grow effort has been expended, with encouraging success. Indoor grows are partially or fully off-grid with solar, wind or hybrid power systems.
On the other hand we have the cryptocurrency speculators who, in good faith, spent cash or mining hash power accumulating stakes of
CannabisCoin, hoping to profit from value inflation and certainly pump groups have used it as a profit vehicle. We definitely will not abandon
CannabisCoin even though its original intended function has proven impractical. What this means is simply that the method of distribution has changed but
CannabisCoin's function as loyalty token and streaming method are unchanged.
Whilst we consider coin pumps somewhat undesirable and actively discourage the practice we understand that supporters also wish to see tangible progress. With this in mind we are making some changes. Despite the established tendency for individuals and groups to use any publicity or potential promotional material as props for their pumps we will be trying to release
limited pictures and/or news on a roughly monthly schedule.
Everyone having followed
CannabisCoin for any length of time will know we have serial pests who delight in trying to upset people, who constantly attempt to tear down what we are trying to do. They have enjoyed some measure of success in frightening potential users and causing several team members to avoid any interaction here as useless distraction. They may be considered successful irritants but that is simply a fact of life and we will cope with it.
It should also be noted that obesity is a serious problem for trolls so please, don't feed them.
What has been achieved lately ?Some of you are aware and some apparently are not, that the regulatory environment for growing and distributing medicinal cannabis is in a state of flux. Much effort is required in the background to secure the necessary permits and to remain in constant compliance with local and state regulation.
While the initial aim was to produce a sativa, followed by a hybrid CANNdy strain, the first truly successful low environmental impact strain has proven to be an indica particularly suited to the northern grow. Unless there is a dramatic improvement evident in some of the indoor strains being trialled then this summer's outdoor grow will be the first commercial-scale CANNdy crop. Permits for this are complete, as are the necessary security fencing and other measures as per government requirement.
What is happening now ?On the physical front the foundation has been laid for the newly permitted greenhouse and construction is beginning on that as part of the expansion plans. CANNLab continues to seek more ideal CANNdy candidates.
Of greater interest to coin traders and speculators the work on defining new wallet requirements is coming to an end. Here are some details and associated reasoning.
At the time of the algorithm change from scrypt to X11 the planned coin supply was reduced from 420,000,000 to 105,861,000. This was composed of 21,882,000 premined to cover the scrypt-generated coins (largely generated by team members before the coin was added to any exchange) and approximately 84,000,000 coins to be mined by whomsoever wished to do so with the X11 algorithm. The final calculation should include 50 initial blocks lacking subsidy so it is reduced by 50 x 420 = 21,000, which is how we arrive at 105,861,000 with all the subsidy halvings prior to hitting the "dust" hard-coded limit.
At this point we should see all the hand-waving and hear the howls from the peanut gallery about 14,000,922 coins "burned" (sent off the block chain to an address lacking a private key, here:
CGTta3M4t3yXu8uRgkKvaWd2d8DQvDPnpL). At the time I was of the opinion they should be retained by ∆
9 as a potential donation pool but the team consensus, wisely, was that they should be destroyed and regenerated by users at a later date.
That date will soon be upon us. With the long-running block chain triggering halvings approximately every 49 days the subsidy rate has fallen to the point where mining is yielding only about 100 coins per day.
In order to secure the block chain now and far into the future the plan is to switch to an enhanced form of Proof of Stake (ePoS).
How will it work ?If you've been following the discussion recently you will know I have been reviewing code and collating the requests and requirements for the new wallets for some months.
The upshot of all that code review is that our
minimum requirements can be met based on bitcoin core 0.10.x. Further, the core upgrade candidates should
not include bitcoin core 0.12.x due to the inclusion of code permitting transaction rollback. While no proof of concept [PoC] code is known to exist for any exploit of this functionality no current or planned use of
CannabisCoin requires it either, so there is no obvious benefit for any possible risk, real or imagined.
There are of course several mechanisms for keeping a block chain growing and secure. The one attracting the most interest and seemingly the most viable for us is a type of proof of stake (PoS) which rewards those providing relay nodes for the network and helping to keep it fully decentralized. The interest to be paid will redistribute the "burned" 14,000,922 coins to the community without diluting anyone's stake from the distribution as originally planned at conversion to X11.
The outstanding number of coins will subsidize the network for at least an additional 14 years at 1%, 7 years at an average of 2% or 4 years at a rate of 3%. Actually, since not all coins are likely to be staked (e.g., those in cold wallets, on responsible exchanges, etc., ...) the available pool of undistributed coins will likely subsidize the network for many years to come. If, a decade or so down track, network fees are insufficient when the available distribution pool is exhausted then other arrangements will be required but that is far into the future and of no immediate concern.
Naturally there are positives and negatives with any scheme so certain additional network rules are proposed.
Coin traders tend to dislike the redistribution of coins previously destroyed as they have included the relative "rarity" of the asset in their pricing calculations. In the case of
CannabisCoin it should not be too contentious because the coin is not particularly rare with more than 90 million in circulation now and traders are welcome to stake their coins to avoid any dilution at all. Traders with large tranches tend to be among the first served with coin-weighted interest payments so their relative position improves (briefly) anyway.
We do not want to encourage naive staking so wallets will need to be encrypted in order to qualify. No passphrase? No staking!
The coins' age (number of days since last moved) will be one necessary element, of course but we also want to encourage network stability or, if you prefer, discourage "hit and run" interest harvesting where wallets leave the network immediately after receiving interest payment. For this reason we are considering requiring wallets to be connected to the network for say 8 hours before becoming eligible to earn interest from staking. A 24-hour minimum was suggested but a lot of people do not keep their computers running full-time and it would be incongruous for an enterprise as green as
CannabisCoin and the
YesWeCANN movement to require any power wastage.
We don't want a situation where wallets closest to the seed nodes manage to win the minting race to the detriment of those with higher network latency so a relatively simple voting scheme should be imposed, something along the lines of
proofhash < (coins * age * target) where coins deeper in the block chain have a higher chance of staking (making any attempted manipulation of the chain more difficult) and constantly splitting larger tranches of coins at minting such that smaller tranches bubble to the top in weighting over time. In order to avoid potential age-weighting attacks age can be capped at a specified maximum (to be discussed). Only tranches over a specified minimum size will be split to avoid generating dust transactions.
To encourage almost a superfluity of online nodes at all times, which helps keep transactions fast and amply secured, a further mechanism is proposed to increase the interest payable to wallets kept online for longer periods. Consider it an extra reward for those who do maintain full-time nodes to harvest higher reward rates in return for their additional network service.
This
could work along the lines of
Now - StartUpTime - 8 where 8 is the number of hours needed to qualify for staking interest. Provided the result is greater than zero the initial interest is set to "1". If the balance is greater than 16 hours the balance is capped at 16. The interest rate applied = 1 + (balance/8). This would yield a proportional annual compound rate between 1% - 3% (calculated daily) for the range of hours 8-24, as seen in the following examples:
wallet "A" has been open for staking continuously for several days before successfully minting a block.
current time minus StartUpTime is greater than 24 so eligibility of greater than 8 hours was satisfied before staking, 24 hours [the number of hours of the prior day the wallet has been staking] minus 8 hours [the minimum qualifying time] = 16, divided by 8 = 2, so applied interest would = 1 + 2 = 3%. This would be applied to the eligible coins for the time indicated by coin age, like this:
Number of staked coins x (1 + (interest rate of 0.03 in this example, divided by number of days in year, defined as 365)) raised to the power of the number of interest intervals (the coin age in days rounded up to the nearest 1)
e.g. 1000 coins which were last moved 100 days ago, staked for 24 hours would be calculated:
1000 x (1 + (0.03/365))
100 = 1008.25270771, plus any fees for transactions included in the minted block.
wallet "B" has been staking for a total of 13 hours, 13 - 8 = 5, divided by 8 = 0.625, so applied interest would be 1 + 0.625 = 1.625%.
1000 coins, last moved 100 days ago, staking 13 hours would be calculated:
1000 x (1 + (0.01625/365))
100 = 1004.46188037 plus any fees for transactions included in the minted block.
Note that the tranche of coins receiving interest and any block fees is split and sent half to each of two new addresses in your wallet, down to a minimum size (to be discussed) so that the smaller tranches of coins gain relative weight over time. If this is not done larger groups of coins would receive their interest frequently while smaller groups would be paid rarely, if at all. Where coin tranches are at or below a specified count (to be discussed) they are not divided but simply sent with interest and fees accrued to a fresh address within the wallet, resetting their coin age to 0 again.
But what about wallets staking for less than 8 hours ?We also have the special case where wallets open for staking have not yet met the minimum requirement for interest payment:
wallet "C" has only been open for staking for 2 hours and so does not meet the minimum requirement for interest payment for staking service yet. However, wallet "C" is still supporting the network and managed to win the hashing race where
proofhash < (coins * age * target) so wallet "C" still gets to mint the block and collect any fees for transactions included but
does not divide the currently staking coin tranche and so
does not lose the coin age attached thereto.
1000 coins remain unchanged and the staking address receives any fees for transactions included in the minted block.
1000 coins, last moved 100 days ago, staking for 2 hours would be calculated:
1000 x (1 + (0.00/365))
100 = 1000.0, plus any fees for transactions included in the minted block.
This special case exists because it is not to fair to take the coin age - the number of days for which interest is due - without actually paying any interest. The wallet is still providing a node service and so is entitled to any fees accrued.
Why not simply pro rata 0%-3% instead of imposing a fixed minimum staking time ?We note that the option exists to drop the minimum 8 hour requirement and simply pay interest
pro rata from 0%-3%. Be aware however that larger tranches of coins with greater coin age are more likely to mint blocks than are smaller tranches of "younger" coins.
This would mean they are more likely to mint in less than 8 hours from staking, losing their coin age in return for less than 1% interest paid.
Under simple
pro rata it would work like this:
wallet "D" has been staking 1,000 coins which were last moved 365 days ago for 10 minutes and successfully mints a block. Number of hours staking (rounded up) = 1, so their yield is 1/24
th of 3%.
1000 coins, last moved 365 days ago, staking 1 hour would be calculated:
1000 x (1 + (0.00125/365))
365 = 1001.25077943 plus any fees for transactions included in the minted block.
Their annual interest rate is a mere 0.125% under this scenario when 3% is on offer. This does not seem equitable nor likely to encourage staking.
More on the suggested minimum requirement structureAssuming an average minting subsidy of 2% (i.e., wallets staking an average of 16 hours per day), if all coins staked (extremely unlikely from other coins' experiences) it would take 7 years and one month to redistribute the coins previously burned. That would seem more than adequate lead time for network transaction fees to assume the role of required inducement to encourage staking.
Given that even in a "runaway" subsidy scenario of 3% for all, where every coin was available for staking 24/7 and received maximum rate of compounded interest, it would still take 4 years to redistribute the available "burned" sum. There appears little risk in offering a sliding scale formula designed to reward those who maintain a 24/7 staking node.
Current "investor class" coin holders might view potentially restoring 2.8m coins over the next year as diluting their stake too rapidly. Such fears are not well founded however because to generate that many coins every large stake including their own would have to have gained the same inflation, leaving their relative position unchanged. The only way to suffer coin dilution is to avoid contributing to network security and stability by not staking.
Staking and coin lockingCoins being "staked" (trying to win the race to have their interest paid) are temporarily locked, making them unavailable for immediate spending. For this reason there will be an option to reserve a specific sum or portion of coins held in the wallet to be excluded from the staking pool.
This does not mean they will be permanently prevented from collecting the staking reward interest, only that they will not go into lock at the same time as the rest of the coins in the wallet.
Why the need for this function ?This is simply provided to ensure users can always retain some spending ability. Consider the case where a user brings their cold wallet online. All their coins are in a single tranche, all the same age and could all go into the same staking lock. Until they have staked how would the user be able to spend any of their coins?
Approximately twenty-one minutes (30 blocks at 42 second intervals) after coins in the same wallet have staked and had their coin age reset they become spendable. The previously reserved coins will then be released for staking while an equivalent number of those whose interest has been paid become the new reserved coins.
What about mobile wallets ?Is the reward for mobile wallets worth the battery drain of having to remain connected to the
CannabisCoin network simply to stake?
We do not feel it is and would rather not offer it at this time, although that can be revisited in the future if there is sufficient demand. Bear in mind users are encouraged to only transfer immediate-use coins to their mobile wallets because those are simplified payment verification (SPV), a.k.a. "thin client" wallets. That said this is a community coin so if you disagree then speak up before the wallets are coded.
Backwards compatibilityThere is no obvious reason to change away from the Berkeley database version 4.8.30 routines currently in use so
wallet.dat files will remain compatible. If Oracle ceases to host the installation archives at some point in the future we can always do so ourselves.
The upgraded wallets will use a "headers first" block chain synchronization routine with asynchronous unordered record storage.
Core 0.8.x.x wallets will no longer be compatible with the network.
What comes next:For
CannabisCoin the next step will be the mandatory wallet upgrade with a hard fork to change to enhanced POS in the near future.
***
