Topic: Spin-offs: bootstrap an altcoin with a btc-blockchain-based initial distribution - page 21. (Read 53566 times)
April 11, 2014, 01:03:05 PM
Let's also keep in mind that if this idea takes hold, other spin-offs will emerge with distributions based on Litecoin, Dogecoin and others. We would also presumably see spin-offs that allocate based on several popular blockchains. This is a fitness function and the market will decide if there is value here.
April 11, 2014, 12:54:24 PM
For the people here who are questioning the "fairness" of this proposal, I ask you to reconsider your assumptions after analyzing the economic incentives at play here:
Let's say you truly believe that a proof-of-stake (PoS) system is better than a proof-of-work system and the market would be wise to adopt this if only given a chance. When the PoS spin-off launches, many bitcoin holders will dump their "free coins" at say a valuation equal to 0.01% of the bitcoin market cap. This means that for an investment of X BTC, you could amplify your wealth by a factor of 10,000X if you are correct and PoS becomes dominant. You would be rewarded for your insight by natural market mechanisms. You know most bitcoin users will remain impartial (they will be holders by default) so your PoS coin will naturally have a wide user base if it is in fact useful.
Spin-offs also benefit the community as a whole:
-Bitcoin users that remain impartial to the experiment should appreciate spin-offs because they automatically get piggybacked to the new network with little effort on their part and without risk to their cryptocurrency wealth.
-Alt-coins doubters should appreciate spin-offs because they represent free money that they can immediately dump on the open market.
Let's say you truly believe that a proof-of-stake (PoS) system is better than a proof-of-work system and the market would be wise to adopt this if only given a chance. When the PoS spin-off launches, many bitcoin holders will dump their "free coins" at say a valuation equal to 0.01% of the bitcoin market cap. This means that for an investment of X BTC, you could amplify your wealth by a factor of 10,000X if you are correct and PoS becomes dominant. You would be rewarded for your insight by natural market mechanisms. You know most bitcoin users will remain impartial (they will be holders by default) so your PoS coin will naturally have a wide user base if it is in fact useful.
Spin-offs also benefit the community as a whole:
-Bitcoin users that remain impartial to the experiment should appreciate spin-offs because they automatically get piggybacked to the new network with little effort on their part and without risk to their cryptocurrency wealth.
-Alt-coins doubters should appreciate spin-offs because they represent free money that they can immediately dump on the open market.
April 11, 2014, 12:41:31 PM
actually, there's a third option.
both aether and ether go to zero b/c it was a worthless alt to begin with.
i'm VERY fine with that too.
both aether and ether go to zero b/c it was a worthless alt to begin with.
i'm VERY fine with that too.
April 11, 2014, 12:35:59 PM
actually, the initial distribution makes all the difference.
Do you mean in terms of efficiency? Can't comment on that, coz I'm not that much of an economist.
But it seems to me that the value of a coin would be commensurable with the amount of them picked up by savvy people soon after being dumped by indifferent people. And then there's the problem of distinguishing between indifferent holders and savvy holders.
actually, i don't care what the market decides on how much an aether will be valued at by the open market. no need to distinguish.
if it decides ether is the best use case, fine, i won't have anything invested to lose from my aether going to zero. the market will have spoken. but if Peter's economic assumptions are correct and i get even richer from aether going to the moon, while ether crashes to zero, i'm fine with that too.
my bet is the latter scenario plays out.
April 11, 2014, 12:31:06 PM
actually, the initial distribution makes all the difference.
Do you mean in terms of efficiency? Can't comment on that, coz I'm not that much of an economist.
But it seems to me that the value of a coin would be commensurable with the amount of them picked up by savvy people soon after being dumped by indifferent people. And then there's the problem of distinguishing between indifferent holders and savvy holders.
April 11, 2014, 12:28:05 PM
This is a true market test, and a beautifully simple one. In the same way that bitcoin proponents are powerless to stop anyone from cloning the code and creating their own blockchain, so too are alt-currency proponents powerless to stop the market from cloning their project and creating any distribution that they deem desirable. By on-boarding the existing community in a frictionless way, with much less pain than buying into an alt through cumbersome and untrustworthy exchange systems, the 'spin-off' chain has an immediate and I think significant advantage. This will be fun to watch.
April 11, 2014, 12:21:17 PM
there will undoubtedly be Bitcoin naysayers from the free altcoin distribution who will dump their new found "free altcoin" for cash or other coin on the open market. the devs are then just as free to scoop these up at bargain prices.
Also tech-savvy bitcoiners will hold/scoop them, and so we have a nearly instant gauge of market valuation, which will reflect on exchanges. So the initial distribution does not really matter much.
actually, the initial distribution makes all the difference.
April 11, 2014, 12:14:54 PM
there will undoubtedly be Bitcoin naysayers from the free altcoin distribution who will dump their new found "free altcoin" for cash or other coin on the open market. the devs are then just as free to scoop these up at bargain prices.
Also tech-savvy bitcoiners will hold/scoop them, and so we have a nearly instant gauge of market valuation, which will reflect on exchanges. So the initial distribution does not really matter much.
I hope Ethereum or some other unique altcoin devs will first take up this proposal voluntarily so we'll have a proof of concept. The clone route is a bit nasty.
this is exactly what we hope will happen. this is a deterrent, or hammer, so to speak.
the altcoin devs would be wise to think through the economic incentives proposed here very, very carefully. i only hope they come to the right conclusions.
April 11, 2014, 12:00:18 PM
there will undoubtedly be Bitcoin naysayers from the free altcoin distribution who will dump their new found "free altcoin" for cash or other coin on the open market. the devs are then just as free to scoop these up at bargain prices.
Also tech-savvy bitcoiners will hold/scoop them, and so we have a nearly instant gauge of market valuation, which will reflect on exchanges. So the initial distribution does not really matter much.
I hope Ethereum or some other unique altcoin devs will first take up this proposal voluntarily so we'll have a proof of concept. The clone route is a bit nasty.
April 11, 2014, 11:49:34 AM
Intresting idea, has this been used on a coin
April 11, 2014, 11:45:31 AM
You plan to make those few who are already insanely-BTC-rich, in the future
now even richer with every coinsystem that is innovated in your way ?
that is an assumption that is not necessarily true but may be exactly the way it plays out.
Peter is saying let's see what the market decides. altcoin's have nothing to fear if they are innovating with the right intentions (subjective yes). his proposal should make altcoin devs think seriously about their own motives as to why they're introducing an altcoin. if there's true innovation that is meant to benefit the community, they will be rewarded richly, as they will have the most insider knowledge of just how good their altcoin is (or isn't). the way they will do this is that b/c of this asymmetric knowledge there will undoubtedly be Bitcoin naysayers from the free altcoin distribution who will dump their new found "free altcoin" for cash or other coin on the open market. the devs are then just as free to scoop these up at bargain prices. as the altcoin grows and matures they will become rich.
i like this method much more than Sidechains b/c it totally separates these altcoin/schemes from the Bitcoin protocol which will have to be changed to implement Sidechains. that is risky and complex. Spin-offs are cheap, simple, and no risk.
it's a beautiful play on economic incentives.
April 11, 2014, 11:17:20 AM
Not sure that I understand you right.
Perhaps you can come up with a better idea, that is appealing not only to your clientele.
Perhaps you can come up with a better idea, that is appealing not only to your clientele.
Primarily, I am engaging in an educational campaign to get our community to re-think where the value in bitcoin comes from. The value comes from the shared agreement from a broad and diverse community that the blockchain is correct (with control of spots on this ledger provable via digital signatures).
Technical details hardly matter. What matters is our shared belief system. Although I am doubtful that any of the alt-coin proposals represent genuine useful innovations (but please go ahead and try to innovate), if one is found it will become part of bitcoin using the spin-off technique.
April 11, 2014, 10:57:16 AM
...you think actual bitcoin distribution is a fair distribution. Everything about this is wrong.
Fairness is subjective.
What we know empirically is that the distribution of coins in bitcoin is efficient. It has been tested by the market over 4 years and over 1,000,000% increase in price.
My premise is that an alt-coin launched using the "spin-off" technique would naturally out-compete the equivalent alt-coin that used a different method for pre-mine distribution, all other variables being equal. The reason I think this is that the spin-off technique distributes the coins widely and in a manner that we know is efficient for bitcoin. This provides the spin-off immediately with (a) a large potential user base, (b) a large potential pool of liquidity, (c) a large number of "holders" (as most bitcoin users will be impartial to this idea).
This is not a debate about fairness. This is a debate about what would actually happen and one that can only be answered with the benefit of hindsight.
April 11, 2014, 08:49:21 AM
Not sure that I understand you right.
You plan to make those few who are already insanely-BTC-rich, in the future
now even richer with every coinsystem that is innovated in your way ?
I invite you to skim through this text:
https://bitcointalksearch.org/topic/m.6009832
(read the paragraph "The filthy rich ...")
Perhaps you can come up with a better idea, that is appealing not only to your clientele.
You plan to make those few who are already insanely-BTC-rich, in the future
now even richer with every coinsystem that is innovated in your way ?
I invite you to skim through this text:
https://bitcointalksearch.org/topic/m.6009832
(read the paragraph "The filthy rich ...")
Perhaps you can come up with a better idea, that is appealing not only to your clientele.
BTC 1NQ4pmBoC6ENjz5c8LjJG9u4tCbLq5NDBE
[BC] BTCavLhd46HTm9FDfeke2BszZ6UfUDPYKJ
[BC] BTCavLhd46HTm9FDfeke2BszZ6UfUDPYKJ
April 11, 2014, 04:01:47 AM
I suppose you could say that a "spin-off" converges to a traditional launch as the pre-mine approaches zero. Or conversely, that a "spin-off" is the best-practices generalization of a traditional (zero pre-mine) launch when zero-premine is not feasible (e.g., PoS).
Does this apply to etherium?I'm not sure I'm following your question.
Is (a clone of) Etherium a case when a zero-premine is not feasible?
April 11, 2014, 03:35:00 AM
I suppose you could say that a "spin-off" converges to a traditional launch as the pre-mine approaches zero. Or conversely, that a "spin-off" is the best-practices generalization of a traditional (zero pre-mine) launch when zero-premine is not feasible (e.g., PoS).
Does this apply to etherium?I'm not sure I'm following your question.
Is (a clone of) Etherium a case when a zero-premine is not feasible?
April 11, 2014, 03:02:49 AM
I suppose you could say that a "spin-off" converges to a traditional launch as the pre-mine approaches zero. Or conversely, that a "spin-off" is the best-practices generalization of a traditional (zero pre-mine) launch when zero-premine is not feasible (e.g., PoS).
Does this apply to etherium?I'm not sure I'm following your question. The Ethereum developers will apparently distribute the pre-mine by selling some of it in exchange for bitcoin during an IPO event and keeping the rest for themselves. This has many people questioning their motives. The spin-off clone aethereum is an exact replica of Ethereum with the exact same % pre-mine, just distributed according to the spin-off principle.
April 11, 2014, 02:35:16 AM
We've refined the idea of "spin-offs" as alt-coins that are launched with a pre-mine exactly equal to the unspent bitcoin outputs at the time the "snap shot" of the blockchain was taken.
Exactly equal or proportional? The latter seems fine.
Right again, smooth. You have a good eye for detail and logic. I corrected the post.
It's an interesting point. How is the constant of proportionality determined, and does 0 count?
I suppose you could say that a "spin-off" converges to a traditional launch as the pre-mine approaches zero. Or conversely, that a "spin-off" is the best-practices generalization of a traditional (zero pre-mine) launch when zero-premine is not feasible (e.g., PoS).
Does this apply to etherium?
April 11, 2014, 02:28:17 AM
If the problem of distribution is fixed in a PoS coin in such a way that nobody feels that they are getting a rough deal then you could have something. The problem with coins that have very few stakeholders is lack of liquidity. The problem with coins that give out their coins to too many people is lack of early adopters.
April 11, 2014, 02:24:08 AM
We've refined the idea of "spin-offs" as alt-coins that are launched with a pre-mine exactly equal to the unspent bitcoin outputs at the time the "snap shot" of the blockchain was taken.
Exactly equal or proportional? The latter seems fine.
Right again, smooth. You have a good eye for detail and logic. I corrected the post.
It's an interesting point. How is the constant of proportionality determined, and does 0 count?
I suppose you could say that a "spin-off" converges to a traditional launch as the pre-mine approaches zero. Or conversely, that a "spin-off" is the best-practices generalization of a traditional (zero pre-mine) launch when zero-premine is not feasible (e.g., PoS).
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