It seems to me that for that funding alternative to work, freimarkets should be somehow exclusive to Freicoin, which is not. Unless we hide our code during development (and the plan is to have in on github from development day 1), any existing chain (or a new can be created) can deploy it at the same time (or even before) Freicoin deploys it. Therefore selling FRC as "the way to invest in freimarkets" wouldn't be a very honest offer.
Opencoin used something close to what you're proposing and now they have a conlfict of interest because if they open source the ripple servers today, xrp price and their whole business viability could be questioned.
By selling FRC into existence as you suggest we would also be capping FRC's price.
And more importantly, the foundation would be making very direct decisions on the money issuance, which is precisely what we're trying to avoid with the several discussed issuance programs.
The foundation was NOT created to fund Freicoin development but because although proof of work is a great security solution, we think is a wasteful issuance mechanism.
And we think we can do better than btc and xrp when it comes to issuance: it's a field full of potential innovations we want to explore.
You can see the foundation's web under development to have an idea of what issuance programs we have in mind for the short term (the numbers are made up and should be discussed):
http://foundation.herokuapp.com/https://github.com/freicoin/foundationUnfortunately we're not a legal nonprofit organization yet and we want to avoid legal concerns so at the beginning only nonprofits will be able to receive funds. That excludes the Freicoin Foundation itself.
But we plan to list the Freicoin Foundation (the "bag" for its operating costs, separated from the "issuance bag") just like another nonprofit and applying the same rules.
Maybe if Foundation's bag becomes big enough it can pay us for
development (instead of us paying for hosting and domains), but I
would really like to be able to have them separated.
Some people criticize bitcoin because it's "anonymous and for
criminals" (like if criminals weren't already served with the usd). I
like to answer to that "I wish my government could be as transparent
as Freicoin will allow the Freicoin Foundation to be".
And I want to remove the will from that sentence.
This can be a great tool for attracting other movements to
cryptocurrencies and there's lot of open possibilities: SCIP-based
curecoin, mining donations, open knowledge funding through
crowdfunding...
I also happen to believe that Freimarkets it's interesting enough on
its own to get funded without any promised return beyond the free
software delivered. Many free software projects have been funded this
way (or very similarly through bounties) and there's plenty of
interest for some of the features offered, for example, p2p exchange
and off-chain transactions. Supporting arbitrary interest-bearing
assets, having the orders outside of the chain, keeping bitcoin's
inputs/outputs approach instead of less secure and private account
approach and supporting off-chain assets are already huge
improvements over Ripple in my opinion. Maybe some invest in this to
protect their previous BTC investment because they see XRP as a
competitor and this would bring all Ripple functionality and more to
the blockchain.
The complementary currencies community is also working in an
intertrading protocol and private chains exchanging assets between
them would give them just that.
There could also be some interest in a technology like this from certain
industry sectors related to smart property like e-gold, security
locks, tickets, agorist stock exchanges...
There's a lot of actors who could invest in this selfishly even
without any promise of return. Maybe not one of them can afford to
fund it on its own, but if they all join forces I would say they can
fund this 5 times or more.
Isn't private donations the funding model for colored coins as well?