Topic: Spin-offs: bootstrap an altcoin with a btc-blockchain-based initial distribution - page 6. (Read 53561 times)

I wouldn't consider either of those options fair, as now the top 1% are completely left out of the distribution.

I would like to see the 1%'s 55% stake brought down to something closer to 1% than 55%, and the 99%'s stake increased to something closer to 99%. 1% getting 55% just doesn't seem right to me. If both sides met in the middle, I think it would be more ideal, but still flawed all the same.

Instead of implementing spin-offs on a cryptocurrency with a large wealth disparity (Bitcoin), I think it would be more fair to implement spin-offs on a more fairly distributed cryptocurrency. I think that would make more sense than playing with the percentages. For instance, Litecoin is an order of magnitude more fairly distributed than Bitcoin, there are a lot of other examples too. There just weren't enough people around when Bitcoin first came out to be distributed equally, and it results in a lot of early adopters. I think some of the cryptocurrencies being released today will have more equal distributions due to the amount of users cryptocurrencies have gained over the past few years.

But not even the Bitcoin "owners" get the coins, being a legal bitcoin owner doesn´t mean you have access to the privatekey where the bitcoin resides.
The most of those coins is stored on exchanges, markets, payment gateways etc. i guess, so i guess the following will get most of those coins:

1)Mark Karpeles AKA Mr.WhereIs6PercentOfAllBitcoinNow?
2)Silkroad/Insertwhateverelsedrugmarkethere admins
3)Bitstamp/Huobi and whatever else big exchange
4)Bitpay/Coinbase and other payment gateways
6)Satoshi
7)Lost because the bitcoins are lost...


Am i the only one who thinks this is a bit flawed?



No, it can´t, you can just split your Bitcoin to small amounts.

This technique could be used to create a coin that only rewards the bottom 99% of Bitcoin stake holders, and excludes the top 1% of Bitcoin stake holders. Would you consider that fair?

I guess it depends on what you mean by fair. Fair as to the top 1% of Bitcoin stake holders, yes. Fair as to the bottom 99% of Bitcoin stake holders, no. Bitcoin's wealth disparity is worse than it is in the real world with hard money and fixed assets, the top 1% of Bitcoin stake holders own about 55% of the Bitcoins: http://www.cryptocoinsnews.com/owns-bitcoins-infographic-wealth-distribution/

It doesn't really look all that "fair" to me. I don't think this argument should be used in support of Spin-Offs, as the statement is a half-truth at best (and ludicrous at worst.) I am leaning towards ludicrous. It is a good idea and should be tried out as a distribution model, but championing it as the "fairest release method" is laughable.

Just posting to say that I think the concept of spin-off coins is a fantastic idea and is the fairest and most efficient method of initial coin distribution I've heard of. I've seen enough people pop in just to bash the idea so I thought I'd offset that by praising it. Many thanks to the people who came up with it and refined it and continue to do so. Also thanks to the many intelligent and thought-provoking posts in this thread, I particularly enjoyed the one quoted at the bottom of this post.

I do believe there are substantial improvements that can be made to the bitcoin protocol - some that nobody has even thought of yet - and that pursuing them is worthwhile. Experimenting with them on the bitcoin blockchain is increasingly difficult and complicated, and that is where I think new protocols bootstrapped to the bitcoin ledger fit in very well. What makes bitcoin unique from all other cryptocurrencies is that it has the broadest user base and most mature ledger; it is the closest gauge there is for measuring people's value for and engagement with cryptocurrency. Why not take advantage of this information? Furthermore, it eliminates the incentives and mechanisms for pre-mines, pump and dumps, and other scams commonly seen with alternative cryptocurrencies.

Agreed - the more enlightened that people have to be to maximize their enlightened selfish interest, the less likely they will be able to do it.
 

trusting people to be selfish is a safe bet, granted, but trusting them to be smart enough to realize how to maximize their selfish interest is not a safe bet.

no way. When you start dumping, price drops. So it's not linear, there isn't enough buy support to dump 1000btc. Even dumping 1btc will lower the price!

Yes, and it also ensures that a broad spectrum of the cryptocurrency community can vote either for or against a particular technology.  If the coin goes up enough that suddenly I can make 1 BTC by dumping my spin-off, well I'm really going to consider doing that.  The only way the market cap will continue to grow is if the economic majority of bitcoin holders actually believes that the new technology is useful.  And if the new technology is useful then it should be used, so spin-offs seem to create the right incentives.

Hopefully we get some hint as to how this plays out with Stellar.  19 billion coins will apparently be distributed according to the spin-off principle.  Right now the current price of 1 stellar is $0.004286.  If I did my math right, this means that bitcoin holders holding 1 BTC, 10 BTC, 100 BTC and 1000 BTC would earn:

1 BTC  ->  $6.26 by dumping their stellar spin-off
10 BTC -> $62.60 by dumping
100 BTC -> $626 by dumping
1000 BTC -> $6260 by dumping

I know what I'm going to do with my free stellar if these prices hold

I see this as a fantastic idea solving some problems. It is incomplete, but it is damn amazing. Bitcoin is king, but innovation needs to continue. Competing cryptocurrencies are inevitable and a healthy part of the market. People benefit by having the ability to choose the coin that best serves their interests. Various anon coins are a great innovation (darkcoin et al), as are coins that use more rounds of hashing, and so on. Some coins give real tangible benefits over the original Bitcoin in a technical respect. However, I want to consider the following objection:


Slumbering coins:
A new innovative coin appears. The distribution is done via bootstrapping on the bitcoin blockchain. Initially 5% of coins are claimed. These coins circulate. The coin has a small coin base. People see the use of the innovate coin and buy in. The price goes up. As the price goes up, slumbering coins become worth more and more, but since they are slumbering they remain unclaimed, and unsold. The price goes up more. Now the price of unclaimed coins starts to shock a few people. "I have x amount of coin on the initial nucleus.... Hrm. I can make $2 by claiming my coin? Why the hell not?" A few people start telling their friends they made a few bucks selling off their coin. People love free money. This ensures that the coin cannot increase in value much before new coin are released into the money supply. This ensures a constant roll out of coin.

Rich claimers:
Anyone who is able to claim a large percentage of the coin is certainly someone who is or was rich in bitcoin. Rich people are many things, but they are usually not stupid. If the coin starts to reach a price where they can make a decent chunk of change, they will pay attention. They will be made aware. They know that if they dump their claimed coin all at once, they themselves will drive the price down lowering the return on their coin and their profit. Hence, it is in their selfish interest to sell off the coin slowly, over a period of time, say months or a year, thereby maximizing their profit. Trusting people to be selfish is a safe bet.

In case of mass sell off by a reckless claimant, the community will happily buy the discounted coin, knowing that the price will return to normal if the fundamentals of the coins innovative value are real.

Secondary benefits:
As the coin grows in value, a chain reaction of word of mouth makes the coin known.

Zer0Sum,

Certainly there are some lucky/stubborn investors, but I take seriously the points made throughout the entire discussion linked in the passage you quoted, not just the OP. In particular, it takes an extremely stubborn investor to continue living paycheck to paycheck (for example) while maintaining hundreds of thousands or millions of dollars in an asset that could go to zero at any time. To bring up such people only seems to reinforce the point: their existence is minimized thanks to Bitcoin's extreme volatility over the years.

As far as real estate, I think there could be a lot more involved in the inertia of "holding" a house. Moving can be a huge deal both logistically and psychologically, and it seems there is a somewhat unique psychology to home ownership in the first place, as seen in the proverbial expression, "A man's home is his castle." A better example would probably be something like Google stock.

At Zer0sum I think you're probably 64.3% correct , I only know a fiew investors in Bitcoin personally and have come to know a fiew here on Bitcoin talk. To summarize dumb luck accounts for those who invested a trivial amount and are happy to hold. But talking from my experience some who invested a larger amount pulled out there initial investment weighing the risks and then as dumb luck would have it they are more comfortable holding.

All in all I think your critique is fair but doesn't undermine the idea that the current distribution represent the most efficient coin distribution.

Seems very reasonable. Makes the verification code tiny, with just a single input (root hash), no need to store a database of claims. So that makes sense.

Yes I did.  It certainly works, but now that I fully realize how small the Merkle branches are, I'm not sure it's worth the added complexity.  

Using 160-bit hashes, each Merkle branch is only ~21 x 21 = 441 bytes long.  This is about the average size of a bitcoin TX.  Of course, this 441 bytes is in addition to the signature and other claim TX details, but still the vast majority of claim TXs should come in less than 1 kB.  A blockchain (with a tiny genesis block) that grows at less than 1 kB/claim seems very acceptable to me.  
 

Peter R have you looked at my idea of pruning claims? In your example above, if 4efe wants to make a claim after 018f has done so, I don't another proof is needed. The first proof also serves as a proof that the second claim is valid. This can occur at any branch. I haven't really thought this through though.

The link that Smooth posted explains that 19% of the pre-mine will be awarded to bitcoin holders in proportion to their holdings at the time of the snapshot.  So this is much more like a spin-off than Clams (that simply gave out "something" to various bitcoin addresses).  



There's no information about how they are dealing with P2SH, native multisig and raw script outputs.  This combined with the fact that the claim service won't be operational for six months tells me that they haven't really started thinking about the more subtle implementation details.  

I hope that Stellar developers consider using a snapshot.bin file in the format specified in this thread and making this file public for inspection purposes prior to the launch of their claim service.  I expect we will have tools to automate this snapshot process ready some time in September, potentially saving a lot of work.  

Based on D&T's analysis, we've proven that using the format proposed in this thread, that ~99.8% of the bitcoin wealth can be claimed with a simple "bitcoin-signed message" and 100% can be claimed using the SCV proposal.  This is a significant improvement compared to naively tabulating the P2PkH outputs.  

Are there any Stellar developers reading this thread?  

Yes, I noticed that too.  It's nice to see the idea catching on, but I was disappointed (like alexkravets pointed out) that only 20% of the pre-mine is awarded according to this principle.  

Snapshot file format update

The snapshot file format has been updated along with the example file and example Merkle tree, based on D&T's suggestions.  


Visualizing the Merkle branch claim proofs

I was playing around with the new Wolfram Cloud Computing platform, and I wrote a little program to generate an image of the Merkle branch for a user-specified claim.  This branch (along with a valid signature for FCV or verfied OP_RETURN claim for SCV) contains all the necessary information to validate a spin-off claim.  Here's the Merkle branch for Claim 3 from our example snapshot.bin file:




The real snapshot.bin file will be a lot bigger, but the Merkle branches are still quite manageable.  Here's what one would look like (note that I am using a fictitious snapshot.bin file until I get the real one).  




The Wolfram cloud computing platform is pretty interesting.  For example, you can publish an API to the "cloud" with a single function call.  I wrote a simple API to retrieve the HEX encoded claims + associated Merkle branches and I can make this public when we have a real snapshot.bin file to experiment with.