Topic: Gold collapsing. Bitcoin UP. - page 1162. (Read 2032266 times)

Yes.  I think we've accomplished something here 

Peter R,

this is devious as hell, which is to say, i like it.

1.  it gets rid of the #1 objection to participating in Ethereum; no dev fees or premine.  the Bitcoin community could not say no to free æther.
2.  it sets up a head to head competition btwn ethereum and æthereum.  æthereum wins btwn the 2 b/c of the free distribution despite the devs threatening to stay with Ethereum.  but whether either of them lasts long term will depend on it's merits.
3.  it could set off a Bitcoin rally in the weeks before the Big Bang event as investors buy BTC in an attempt to get a larger share of free æther.  longer term, as you say, it could be the altcoin killer.
4.  Ethereum devs could defect to æthereum as their IPO implodes and they see the possibility to pick up cheap æther as it's dumped after the Big Bang.  but only if they truly believe in Ethereum concepts.  you too could pick up cheap æther if you decide to develop the initial æthereum.
5.  it would be a great non threatening to Bitcoin way of testing turing complete.
6.  even if devs stayed with Ethereum and developed versions 2,3, etc. since it's open source, æthereum could just co-opt the code.

i realize nothing i've outlined above is different than what you've already said.  just needed to solidify the concepts in my own mind.  i definitely think it's worth trying.

edit:  the great thing about this is it's cheap to implement with little to no risk.  just some time and some code.  the upside is enormous even if æthereum fails b/c it probably drags down Ethereum with it and other altcoins liberating the funds wasted in that space to be invested into Bitcoin.

The difficulty and expense of understanding and securing bitcoins can be likewise exploited. Heartbleed is a perfect example of a fear trigger for many people.


Agreed, but memories fade quickly when fear and greed are involved. The real issue is the barrier to exit (entry must be as low as possible). As with GLD and SLV there could be redemption restrictions, perhaps when Bitcoin reaches five or six figures. It would be a small number of people able to raise $10mm to redeem 100 XBT at $100k each.


Yes, same as gold. Bitcoin then becomes an ideal tool for greater control rather than liberation. That isn't to say I think this is certain, as there's plenty more development to play out -- I just think Bitcoin is being infiltrated and usurped in potentially irreparable ways.


Of course, funds must flow in before flowing out (read: fleeced).

The next step I think would be to create a thread in the alt-coin section and reference it in bitcoin discussion, speculation, and reddit.  This would get people thinking.  

Then a bit later you clone the Ethereum website, explaining your proposed changes.  The cryptocurrency market suddenly realizes that this is a credible threat.  The Ethereum IPO is not taken as seriously as it otherwise would, and people continue to shift away from viewing alt-coins as get-rich-quick schemes, and onto viewing them as experimental platforms needed for the good of the community as a whole.  

If this catches on, new alt coins will need to use the current unspent bitcoin outputs to have a hope of success (otherwise they'll be killed by a clone).  This means that people can just invest in bitcoin, and be confident that they will be piggybacked on new important innovations.      

EDIT: And like Adrian-X said, this "incentivises holding ones coins as opposed to leaving them in an exchange, or an EFT."

You or someone should do this, sounds like a great project.

Your bitcoin key-pair is used exactly once to claim your æther.  After the æther is claimed, the functionality is identical to Ethereum and you'd use ethereum key pairs from that point onwards.  This is the only additional piece of code one would need to write: basically a transmission from bitcoin space to æther space.  

I believe my proposal works for any possible alt coin.  My proposal is simply a way to create a distribution of wealth equal to that of bitcoin in any new alt coin.

It's possible you're not properly distinguishing between alt-coins and what could be classified better as bitcoin blockchain forks. Maybe the design differences are mostly not very inspired, but some may have features that make them incompatible with the bitcoin keypair specification. The argument for alt-clones breaks down for a coin like that.

Don't get me wrong, I'm not a big fan of alts (have never held, nor mined, any alts). But if an alt came along that solved the bitcoin pseudonymity issue, and still had the flexibility and running costs of bitcoin or better, I'd seriously consider changing allegiance to that.

I think it would need to be a totally separate platform.  It would compete directly with Ethereum and use nearly their exact source code, the only difference would be the initial distribution of coins.  

Basically, we telegraph to the community that all the unspent outputs at Block XXXXX (sometime in the future) become the nucleus for æthereum.  Any bitcoin user who had a private key for unspent outputs in Block XXXXX just has to sign an æther address with that key and broadcast it to the æthereum network to claim their coins.  There is no rush to do this either.  If you do nothing, you can always claim your æther at a later date.  

Personally, I think bitcoin has many untapped features (colored coins, smart contracts, etc) that we need to explore, and that Turing-completness will result in more problems than solutions.  After reading Daniel's article on the coming demise of alt coins and Vitalik Buterin's comment that "bitcoin is not fair because he didn't know about it in 2009,"  I agree that the alt-coin nonsense has gone too far.  My proposal is basically a way to "experiment with Turing Completeness" without people having to stress about "missing out" or risking more capital in another "AuroraCoin."  I think alt-coins are important, but I think the "get rick quick attitude" associated with them is beginning to change.  People are starting to see that what is important in bitcoin is its market cap, liquidity, and most importantly the distribution of coins that the blockchain represents.  

æthereum: a turing-complete cryptocurrency with initial coin distribution based on the bitcoin blockchain

FAQs:

1.  What is æthereum?

æthereum is a Turing-complete cryptocurrency where the initial distribution of coins is based on the unspent bitcoin outputs on an agreed-upon day in the future (these unspent outputs are known as "the nucleus").  

2.  This sounds like Ethereum.  Is it the same thing?

No, æthereum is unique.  

3.  In what ways is æthereum the same as Ethereum?

æthereum is functionally equivalent to Ethereum.  They are both based on the same source code.  

4.  In what ways is æthereum different?

The initial distribution of coins in æthereum is different.  If you are a bitcoin user, you can use your bitcoin private keys to claim an amount of æther exactly equal to the % of the bitcoin market cap you owned at the time of nucleus creation.  This claiming process is trustless and decentralized and doesn't cost you anything.  

5.  But I have to buy ether during the IPO!  Why are you guys giving æther away for free if it is basically the same thing?

The most difficult part of launching a cryptocurrency is attracting a user base.  Because you own bitcoins, you've demonstrated that you are an advocate for its success.  æthereum can only become successful with the support of the community, and since it costs nothing to "give away æther," doing so both helps our coin and helps the cryptocurrency community.  

It has taken us 5 years, 3 crashes, and $600,000,000 of unrecoverable mining costs to efficiently distribute bitcoins across the user base.  Rather than spending another 5 years and countless crashes, we can jump-start æthereum by beginning at day 0 with the same distribution of coins.  

6.  Are you keeping any æther for yourself?  Is there a premine?

No.  The amount of æther is exactly equal to the unspent bitcoin outputs during nucleus creation.  

7.  Then how are you going to reward yourself for your development work?

We believe that many current bitcoin holders will see their æther as "free money" and sell it for a low price.  Since we believe in the long-term prospects of this technology, we intend to buy these coins for cheap.  We will then continue to develop æthereum and if we are successful our coins will increase in value.  

8.  Why would anyone buy ether if they can get æther for free?

We cannot answer that question.  People must make the decision they feel is right for them.  Some people may feel that the distribution of wealth encoded in the bitcoin blockchain is somehow unfair.  Such people may wish to purchase ether if they feel the IPO process results in a more efficient distribution of wealth.  

most likely 90%+ of the Ethereum devs own Bitcoin.

if Ethereum does indeed bring added value to Bitcoin as a bolt on, as proposed by Peter, then the value of Bitcoin itself should rise thus incentivizing the Ethereum devs to continue improving their bolt on code.  this should be obvious if lots of ppl start using the Ethereum bolt on to build financial products as is originally proposed.

the only concern i would have is how to integrate the mining of both platforms.  they are seemingly quite different.  if Bitcoin miners could somehow merge mine ethers then it might work.

edit: maybe i misunderstood Peter's proposal.  do you foresee this as a totally separate platform?

I agree that it would be difficult to "pump and dump" using this method, but if you actually have a real innovation that was useful and worked hard to move it forward, you would be highly rewarded.  

Remember, all bitcoin users can claim an amount of æther in proportion to their bitcoin they held at the time of "nucleus formation."  When the coin is released to the wild, I'd expect the æther market cap to trade at a value of perhaps 0.1% of the bitcoin market cap (many people will just dump this "free" money).  

If you really believe in æthereum, you would purchase these coins since you believe them to be highly discounted.  You would continue development and if the community agrees that what you've done is important, then the market cap of æthereum will slowly increase.  You will be rewarded because you have a large holding that you purchased at fair market value based on your insight into what is important in a cryptocurrency.  

What would I do as a user?  I'd probably just hold my æther.  It didn't cost me anything, so I don't really care if it collapses, but it is worth holding just as a hedge.  I think many people would just decide to hold.  


EDIT:


The original business model only fails to the extent that the operation was a pump and dump, I believe.  If there is real innovation, then I think it is their best interest (and the community's best interest) to distribute coins as per the unspent bitcoin outputs at an agreed-upon time.  If they are confident in their innovations, they'll have plenty of time to collect coins for cheap as they push forward with innovation.

If this were to succeed why what incentive would the original devs have in releasing v. 2, 3 etc?  If by making the bitcoin blockchain version available to all bitcoin holders (which I suspect comprise 90% + of those interested in Ethereum) and hardly anyone buys the original, their business model has failed and there is nothing and no prospect of anything from which they can pay themselves to continue with development.

Yes, that's what I mean.  Any new value is in the code created by the devs.  And this can just be gobbled up by the blockchain-based version of the same technology.  

The work done by the devs apply to both Ethereum and æthereum.  The only difference between the two coins is the initial coin distributions.  The question is which coin would win?  The coin with the more efficient distribution and larger potential user base, or the coin that costs money to purchase, has less users, and very likely has an initial distribution highly favouring the developers?

... I agree a successful alt-coin would least need to have interchangeable unspent bitcoin outputs ... but would probably need to be merge-mined capable also ... so basically a fork (maybe not even hard), with some new features.

This is VERY interesting.
But I don't think:
Is necessarily true. Value can come from developpers too. Ethereum team said that everyone can fork the code but it's the devs who bring the value, and the devs cannot be forked. And Ethereum guys plan to keep improving Ethereum with release of new versions: Etherium 2, 3 ,etc.

When Daniel wrote about the coming demise of alt coins, he based his premise on the importance of bitcoin's liquidity and market cap (http://themisescircle.org/blog/2014/03/14/the-coming-demise-of-the-altcoins/).  I think this was an important contribution, as it is waking people up to the reality that most alt coins will collapse.  

But Daniel missed one thing: bitcoin's market cap and liquidity are very important, but the most important thing is the record of wealth distribution encoded in the blockchain itself.  It's taken us 5 years, 3 crashes, and $600,000,000 of unrecoverable mining costs to get the coins distributed as they currently are.  The value of bitcoin is based on our shared agreement that the blockchain is right.  

Since the value is in the blockchain, any promising alt-coin can be cloned with a bitcoin-blockchain based wealth distribution.  Immediately the blockchain-based clone has more users and a more efficient wealth distribution.  Just the credible threat that this can be done will now slow the proliferation of new alts.  

Consider the coming IPO of Ethereum.  

I could create a clone called æthereum which is functionally identical to Ethereum except for the initial distribution of coins.  One month after Ethereum IPOs, the unspent bitcoin outputs of block XXXXXX become the "nucleus" of æthereum.  I publish this nucleus to the æthereum.org website and give the community another month to confirm that the æthereum nucleus has the identical coin distribution to the bitcoin wealth distribution at the agreed-upon point in time.  We correct any mistakes (there shouldn't be any except for maybe weird n-locktime transaction, etc).  

One month later, the "æthereum nucleus" undergoes a big-bang event creating "æther."  Bitcoin users can claim their æther by signing an æthereum address with their bitcoin private key.  The æthereum network cross-checks the nucleus and confirms that the æther is valid.  A new universe is born!

If I can very easily do this, and I see no reason why I can't as all the code is open source, why would anyone purchase ether when they get æther for free?  

If there is any value in Ethereum (and I'm doubtful that Turing completeness is anything other than problematic) then it is in the code.  But the code is freely available.  Yet what you would be buying during the IPO is spots on the "Ethereum ledger."  Why would you do this when you already have a spot on the bitcoin ledger and thus the æthereum ledger too?  

If we want to experiment with Turing completeness, let's just run it off the unspent bitcoin outputs and see what happens.  

I like this train of thought, it incentivises holding ones coins as opposed to leaving them in an exchange, or an EFT.

Can this idea be done with fractional reserve paper gold?

Exactly.

This idea actually has me quite fascinated.  We could make a website "Ethereum 2.0" and claim that we will launch our clone 1 month after Ethereum launches.  There is no need to purchase ether, since your bitcoin private keys already control a share of it equal to your share of the blockchain.  Upon release, you may keep your ether 2.0, sell it for bitcoins, or purchase more ether from a seller.  There will be no ether beyond what is in the bitcoin blockchain on the day of launch.  

Why buy ether 1.0 with real bitcoins when your private keys already grant you ether 2.0 for free?  And ether 2.0 is better, since it represents a mature network composed of individuals with a strong commitment to the success of cryptocurrency.

Further all the marketing done for the dev alt coin version would equally apply to the bitcoin block chain version, except for what future work they might do (which could then be subsumed as well from the new chain, and so on).

I had an interesting idea:

Consider launching a new alt coin (e.g., Ethereum).  The coins are initially distributed in some manner, the code is open sourced, and the system begins fending for itself in the wild.  The initial distribution of coins is sub-optimal and the user base is small.  

After launch, I make a clone of this alt-coin, but distribute the coins according to the bitcoin blockchain.  Users can prove ownership since they have their bitcoin private keys.  Then I release my clone into the wild.

It seems to me that the blockchain-based clone would always win, because you are starting with a more efficient distribution of coins and immediately have a larger potential user base.  

Bitcoin would eat the work of the alt-coin developers with little regard to their contribution.