Topic: MasterCoin: New Protocol Layer Starting From “The Exodus Address” - page 151. (Read 448492 times)

Except you haven't answered this. You'd just denied that this is a problem every time or claimed you've already answered it.

Over and over again I have described how the escrow fund makes a profit through its interventions. Simply claiming otherwise doesn't present any new data and does not give me something meaningful to respond to.

The escrow backed currencies are NOT being removed from the spec. I simply wonder if responding over and over again to the same misunderstandings of the escrow system is the best use of my time, when there are so many other less controversial ways for MasterCoin to succeed.

Here is an economic principle that MasterCoin violates:

Law of conservation of Value.  - absent a change in perception of an individual, value can neither be created nor destroyed, it can only change hands.
    
      If you create 1 GC backed by 100 MC  when 100 MC is worth 1 Oz of Gold and the  100 MC are held in escrow (cannot be spent) then you have neither created nor destroyed value (only the purchasing power of 1 Oz of gold remains in circulation).

      Assume the value of MC falls by 50% such that 1 Oz of Gold is now worth 200 MC, the escrow fund is only holding 0.5 Oz of value but according to dacoin there is still 1 Oz of Gold worth of purchasing power that exists.  

      Now he is smart enough to realize that if the escrow fund is worth 0, the GoldCoin is worth 0.   He just doesn't compute the fact that the when the escrow fund is worth 0.50 the GoldCoin is worth 0.50 and when the fund is worth 1 GoldCoin is worth 1.

With BitShares I fully follow this law because when the price of Gold changes value is transferred between the short/long positions accordingly and never created nor destroyed.    BitShares get their value from the perception that they provide utility to the users.    All parties take risks and know the terms, but the market forces (not automated pegs) keep BitGold properly priced.

Sure, I'd support a bounty. Perhaps they'll come up with things the developer(s) have yet to, like thezerg has done, so definitely worth the cost in my book!

I don't mind posting such a bounty if my oversight board (currently Ripper and vokain) thinks it would be a good use of funds from the Exodus Address. However, the posts so far don't even come close to convincing me that the idea can't work at all. The closest they have come is pointing out the trade-offs involved with this kind of system. There are clearly scenarios where excrow funds break down, but to claim the idea couldn't work for any amount of time is over-reaching.

Also, welcome back to the thread

Here are the differences between the current BitShares system and MasterCoin:

1) BitGold is initially backed by 2x its value in BitShares by someone intentionally taking a short position that will LOSE MONEY if BitGold goes up.
2) The price of BitGold is only ever determined by voluntary market actors, no oracles or data feeds.
3) The highest unaccepted bid is used to perform automatic margin calls for any short position with less than 1.5x backing.
4) BitShare positions actually pay dividends & there is an opportunity cost for being short and a positive ROI benefit for being long.

My original BitShares idea suffered from the same core problem as MasterCoin does today... I was attempting to operate with 0 margin in the event the price moved against the creator of BitGold or GoldCoin.    I also attempted to rely entirely on market expectation that BitGold would track gold on its own based entirely on expectation and new issuers creating BitGold at the new price.   In effect, I started out with all of the mistakes that MasterCoin is repeating.   The difference is that I paid people to find these things and challenge me to fix them.   TheZerg made 10 BTC (when it was worth $1300) and forced me to innovate and come up with the current version of BitShares.

Last I heard from TheZerg he said the new BitShares system is much harder to find fault with.    That said, I am still willing to pay a 1 BTC bounty to anyone who can find a fault with the BitShares protocol that will result in me making a change and 10 BTC to anyone who can convince me to abandon BitShares all together.   Note: Charles & I are the sole judge of whether or not to award the 10 BTC bounty, but we have a history of being fair/honest in our judgements.  If you can convince us of fundamental problems you will save us money and we would gladly pay 10 BTC... if you cannot convince us then we will be rolling out BitShares as the proof of your failure to convince us.  

MasterCoin seems unwilling to risk 10 BTC on the potential that the flaws in his system might be discovered.  If he is so confident his approach will work then it is a 0 risk proposition to offer a 10 BTC bounty.   At the very least his investors will know that he has put up enough money to insure his ideas are properly vetted.

Hey Bytemaster. It's cool you're posting in this thread because I remember your BitShares idea was very similar to this. At least you weren't so greedy that you asked for money directly. You definitely have a point about how he fails again and again to reply in a meaningful way to criticism (or he deletes the post).

He counters it by removing the feature from the spec and stoping all discussion on it.   Instead he is going to build MasterCoin for the betting system and issuer-based coins backed by trusted parties.  

He has yet to address the HUGE inefficiencies of storing data in bogus bitcoin address fields.

You assume that your escrow is going to profit by maintaining a peg. Basic supply and demand make the maintenance of an arbitrary peg always a money losing proposition. People are only ever going to buy from the fund when they can make money. They're also only going to sell to the fund when they can make money. Eventually any "escrow" you set up will run out of cash as the public treats it like a big money giveaway. How do you counter this?

Cool.

I don't think any bitcoin client implements multi-sig yet, although armory is getting close. Perhaps the veto power should be informal at first, and once a way to do multi-sig becomes available, we can codify it using m-of-n multisig.

Does that sound good to you guys?

I like that. I want nothing more than to see this project through, and as a hopeful budding entrepreneur, I do see ways we can make this project truly the Second Bitcoin Whitepaper. The main emphasis should be on communication, communication, communication, and from there I believe everything will work itself out in the best possible way. I'll look at getting a secure laptop on which to store said keys right now. In the mean time we can discuss the specifics of how this agreement would work.

This veto power (perhaps limitable) would require you to trust the board as well. I would like that, makes things a bit more symmetrical

Yes, I finally took a look at the slideshow - it looks like a really cool way to organize bounties! (But how does your website make money?)

Do you have a thread for this somewhere else? (So we don't clutter up this one)

Can you tell me about how this works?  I'm interested in using this for a FOSS project I'm getting off the ground
http://bitcoinmagazine.com/bitcoins-watershed-moment-an-open-source-cryptocurrency-ecosystem/

Feel free to email me [email protected]

Sorry - just noticed that I haven't replied to this.

There is no escrow admin - it's all handled by the protocol. Speculators can reduce the escrow fund's trading profits, but cannot eliminate them entirely.

I think maybe I'll stop debating whether the escrow fund can work, and just point out that even if people are doubtful about the escrow-backed currencies, MasterCoins can be absurdly valuable without that feature. Distributed betting is going to be big. Thanks to your suggestion, the spec will also support user-issued coins without escrow backing (working like colored coins).

I went ahead and forked Armory in anticipation of tearing it all apart:
https://github.com/dacoinminster/MasterCoin-Adviser

The greasemonkey script probably won't change much. I have no idea what I want to do for a website. Probably just contract it out at some point, since I don't really enjoy working on static pages.

Sweet! I love how it only requires actually permission to the Exodus!

How about setting up a "mastercoin-foundation" github organization, that will hold all the different repos? (mastercoin, greesemonkey, website, etc.)

I think that can work out quite well. After getting approval from Vokain and reaching a decision, you might want to add this to the OP. A further step would be to send the funds to an m-of-n wallet controlled by the three of us. This can happen at a later date, and doesn't necessarily have to happen anytime soon. (Us having veto is almost, almost like any-two-out-of-the-three-of-us-can-vote)


Good list. My cost was a measly $11.48.

This morning I whipped up a greasemonkey script to show how many MasterCoins have been purchased by each transaction sent to the Exodus Address.

If you have Firefox or Chrome, you can install it from here: http://userscripts.org/scripts/show/175196 (Chrome requires that you download the script and install it manually. In Firefox, you can just click "Install")

The script is only active while viewing http://blockchain.info/address/1EXoDusjGwvnjZUyKkxZ4UHEf77z6A5S4P

And with that, the first project milestone (see post #2 in this thread) is complete!!

Here is a screenshot of what the page looks like with the script running: